Scrimping on building materials, opting for the cheapest contractors without checking out their credentials first or over-estimating your own building capabilities by trying to do too much yourself, could all create problems for the future. If a job calls for an expert, then use one.
Get permission
Before buying land make sure it has valid outline planning permission, although there may still be restrictions on what you can build so be careful. It may be worth buying land which already has a rundown building on it that you could replace. While this will have a higher upfront cost than an empty plot, you could save money if it is already connected to electricity, gas, water and drainage services. Find out more about planning permission on the UK Government’s planning portal at bit.ly/juTlPo.
Finding the right plot
You can search for land on many conventional property websites such as Rightmove.co.uk, Findaproperty.com, Primelocation.com andZoopla.co.uk, however, there are also specialist land websites such as Plotbrowser.com, Plotfinder.net and Plotsearch.co.uk. The average cost of a plot in the UK last year was £138,206, according to Plotsearch.
However, you must beware land scams, where companies sell plots that are never likely to get planning permission — visit Propertyscam.co.uk or see the Financial Services Authority’s (FSA’s) website for more information. Never buy land from a cold-caller promising that it will soar in value. The DirectGov website has more help on avoiding the pitfalls at bit.ly/Irusur.
Keep stamp-duty costs down
The good news is that you only have to pay this tax on the value of the plot because you are purchasing this before it has been built on. This means you have a better chance of staying under the stamp-duty threshold of £125,000 than if you were buying a ready-built house. Above this threshold you pay 1 per cent on land worth up to £250,000, 3 per cent on plots worth up to £500,000 and so on up to 7 per cent for land worth more than £2 million.
Get the right mortgage
There are two types of mortgage that you can get for a self-build project — the advance-stage or accelerator mortgage, which provides money ahead of each phase of building, or the arrears-stage system, which only pays out the cash after each phase has been completed. Many self-builders will not have another source of finance and will need the accelerator-type mortgage. You can usually borrow up to 85 per cent of the land’s value and the same percentage of the building costs, although some lenders will go up to 90 per cent for borrowers with a high credit score. Buildstore.co.uk offers a number of exclusive deals that it has secured with lenders, including an accelerator three-year variable rate starting at 5.24 per cent from Melton Mowbray Building Society at up to 75 per cent loan-to-value with a 1 per cent fee.
Remember ongoing mortgage fees
You will also have to factor in the cost of needing to have your property reviewed by the lender to check its progress at various stages in order to release more funds. These are usually around £70 per re-inspection and you are likely to require up to six visits.
Stick to your budget
One of the biggest obstacles to self-build projects is running out of money, so make sure you factor in all the costs and set aside a contingency fund of between 10 per cent and 20 per cent for unforeseen expenses. Try to avoid making significant changes to your plans mid-project as this will seriously increase costs. You will be able to claim back some of the VAT on your building costs, so keep receipts and detailed records. Use an online calculator, such as the one from Buildstore.co. uk (bit.ly/y5TIE) to estimate your costs upfront
Tap into online resources
he UK Government has launched a new portal to provide information and contacts for self-builders (selfbuildportal.org.uk). “Self-build” can mean anything from undertaking construction work, to hiring contractors or buying a kit home. The information hub outlines the pros and cons of each as well as providing a list of all the lenders that offer mortgages on projects like this.
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8 Responses
Hi there,
I’m looking to fund a sustainable eco-housing community somewhere around Mount Dora maybe (my daughter is there) where the land is affordable and there is potable water. My total outlay would be around $45,000 for land and building- a small inheritance. I’m 52, and female
Klamath County Oregon is very progressive in helping others achieve a sustainable lifestyle. Even the college and many businesses here are heated entirely by geothermal. To see exactly what our area has to offer, check out the video clip on the “Green” Welcome Wagon and the video clip on the Klamath Sustainable Communities link. Plug into the Klamath Solar Association and build relationships with other like-minded folks. Life is good here!
yes a mentor would be nice any taker in washington state ?
Canada has the same beauracracy Mary Patricia. High police state, and control. all those things listed, happen in my community too. :S
P.S. I wholeheartedly concur with “Live Free Or Die” as one cannot so much as sneeze on one’s property without needing permits up the wazoo here in Cape May, NJ, Permits to plant trees, permission on the color you wish to paint your home, fines for not having the designated trash can color {I am not kidding!}, people screaming from their windows if you walk your dog AT THEIR CURB & subsequent fine if it poops and you are caught without a poop bag etc. etc. I have found creative ways around this policing but I am sick of paying tax money into this insane, corrupt NJ system and am praying/looking/struggling to move ON PRINCIPLE ALONE!! Why I am researching Canada et.al.
There are several off-grid properties in CA listed on greenhomesforsale.com AND on Page three of Cottages For Sale on cottagesincanada.com there is a Leeds Celebration house in St. John’s. Listing # FS-12183 Nova Scotia, New Brunswick etc. These may not be dyed-in-the-wool survival properties (YET) but CA seems to be trying and what I have been researching is not merely a greenwashing of property sales. Granted, there is much of that as well.
Funny you should say that… Any tips for someone looking to do just that?
Or, you can find a remote area that has a like minded community and build outside the system. I feel it is our God given right to provide shelter for our families with out government intervention, providing it is a safe structure. Man has been building shelter for thousands of years with what ever he could find, seems to have worked out ok. Why now do we need someone telling us where, how, and why ? First time builders should seek out a mentor before going out on thier own.
Live Free or Die.