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Wednesday, 3 October 2012

Building your own home

Building your own home can be cheaper and greener than buying an existing property. Find out about the different ways to self build, how to work out a budget and where to find land.

Different ways to build your own home

Self Build Portal

Find out more about building your own home on the Self Build Portal

There are different ways to build a home. You can:

  • DIY self build – you do most of the work yourself, and use professionals like electricians or plumbers where necessary
  • manage the whole process – and employ a surveyor, an architect and a variety of tradesmen who do all the physical work
  • hire a contractor – and let them manage the project
  • find a developer with land, planning permission and a range of plans for you to choose from – and let them take care of the building
  • buy a kit home and let the kit home company put the kit together on your land
  • work with others – you buy land as a group, divide it into plots and build a group of homes together
  • find a social landlord (eg a housing association) who is offering self build – or contact the Community Self Build Agency

The Self Build Portal has detailed information and advice on custom build homes, including the different ways you can build your own home.

Working out your budget

You need to plan your budget carefully so that you know how much the project will cost.

Your budget should cover costs like land, professional fees, building work, materials, insurance and hiring specialists.

Unless you have enough savings to pay for the whole project, you will need a mortgage. You’ll need enough money to cover your mortgage repayments during the build.

You will also need somewhere to live until you can move in, which may also cost money.

Self-build mortgages

Generally speaking, there are two types of self-build mortgage – ‘arrears-based’ or 'advanced payment'.

With an arrears-based self-build mortgage, you receive the money on completion of each stage of construction.

With an advance payment self-build mortgage, you receive the money at the start of each stage of construction. This removes the need for ‘bridging loans’. A bridging loan is a short-term loan which is repaid when money from the mortgage becomes available.

With both types of mortgage:

  • you normally get the funds in five stages during the building process – though this depends on the type of building work
  • funding for land is normally only released once 'outline planning permission' is in place (see below)
  • you’ll need building control approval before any funds for building work are released

If you want to stay in your current home while the new one is built, you will need to agree this with your current lender. You’ll need to ensure that you have enough income to cover both mortgages.

Finding land to build on

After working out your budget and organising finance, you’ll need to find and buy some land to build on. The land is called a ‘building plot’.

You can find a plot by:

  • checking at the local planning office for land where planning permission has been granted but building has not started
  • contacting estate agents and auction houses
  • hiring a plot-search company – or registering with a plot-search website
  • asking a local builder to find a plot and build your house

Planning permission

Before you buy a plot of land, make sure that it holds valid ‘outline planning permission’ (or that there is a realistic chance of getting it). Outline planning permission is a basic level of planning permission. For example, it gives permission for a building of a certain size to be built on the land. This permission lasts for five years.

Before building can begin, you must also get planning permission for detailed plans of the home you want to build. This means that outline planning permission does not guarantee that you can build the home you want to build on the land. Detailed plans must be received by the planning department within three years of outline planning permission being given.

If the plot doesn’t have planning permission, you will need to apply for it (see the link 'How planning for buildings works' below).

Checking the land is suitable

If the site lies above mine works, a well, or old tunnels, then building on the land might be expensive. Costs may also be higher if you build on clay.

Organise a ‘site appraisal’ of the land. This will assess the suitability of the land for building on, and will include evidence of potential problems of previous use, like old foundations, wells and tipping operations.

Buying a derelict building

Consider buying a plot of land that already contains a run-down building and then constructing a replacement dwelling. Although the initial cost of the site might be higher than an empty plot, you may benefit from existing access to services such as highways, electricity and gas. Mains drainage and water supply may also be in place.

Getting more information

You can find out more about building your own home on the Self Build Portal.

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