Building your own house

Find out the basics of building your house. Learn how to finance it.

Self-building is becoming more popular, regardless of whether you are looking to create a grand design or just want something unique.

According to the National Custom and Self Build Association (NaCSBA), almost a third of adults expressed interest in building and designing their own homes.

This guide will explain the actions of local governments and councils to assist self-builders and provide advice on financing your build.

What does Right to Build look like?

People looking to build their home can face many challenges when trying to find the right land.

The registers are an integral part of planning duties. Councils must allow sufficient self-build or custom build plots within three years.

The government announced in October 2020 that Right to Build would be reviewed. This review aims to ensure that councils have enough land and give self-build considerations when planning.

Do you have any restrictions?

The registers are not mandatory at this stage and can only be signed up by councils in England.

Some councils might add additional criteria to their registers in order to manage demand. To get priority, you may need to live or work in the area.

What is a serviced parcel?

A serviced plot refers to land with electricity, water, and waste connections and access to a public roadway.

It will usually have outline planning permission, and often a ‘Plot passport’ that sets out rules such as the maximum volume and location on the plot.

What plots are available?

It all depends on your location, local council, and individual needs.

Many plots will be located on brownfield land, which has been designated for redevelopment. This is not a good option for self-builders who are looking for a rural plot with just a few acres.

It is better to consider the Right to Build Register as one option, and not relying on it entirely.

What are the alternatives to this?

Although there are occasionally plots of land listed on residential property portals, it’s unlikely that they will be your best choice.

You might also want to ask your local council about land on which planning permission was granted, but no construction has taken place.

What is the difference between modular, custom-built and self-built homes?

Although “Self-build” and “custom-build” are often interchangeable, technically there are some distinctions.

You can build your own home

The self-build approach is more hands-on. You buy the plot, prepare it, and organize the design and construction.

You may have to get your hands dirty, manage contractors or take on the construction work yourself.

Homes custom-built

Custom-build allows you to work with a professional to design and build your dream home.

Most often, you will buy land and then work with the developer on the design. The developer will manage the building project.

Custom-build offers the main advantage of being able to get the design you want, or at least select from a variety of designs. This is without having to worry about planning permission and managing the project.

Kit homes and modular homes

As it seeks to address the housing shortage, the government is increasing its interest in modular homes (factory-built).

Although the term “prefab” is often associated with negative connotations it’s now possible to make factory-built homes or modular elements of homes to the same standards as those built on-site.

Factory-built elements can be produced at high speed and in large quantities and are therefore subject to higher quality control.

There are many options for a “kit home” – from wood-frame packages to more eco-friendly designs.

Mortgages that you can self-build

Finding a way to finance your home building project is one of the most difficult aspects of owning a home. You will need a self-build mortgage unless you have a lot of savings or you are selling your home to finance the project.

Specialist lenders offer self-build mortgages, along with some mainstream banks and building society. According to NaCSBA research, 21 building societies provided self-build and custom-build mortgages as of October 2020.

You’ll typically receive your funds at various stages of the construction process with both self-build and custom mortgages.

Some loans require that valuers visit your site at regular stages in order to provide a valuation. This could leave you without enough money to complete work if the site has been reduced in value.

Instead, some specialist self-build deals release funds that are linked to each stage of construction work. These deals are not tied to the site’s overall value and can provide greater security for self-builders. They can reduce the amount you have to contribute to the build by providing funds in advance.

Building your own home: The pros and cons

It is not an easy decision to decide whether you want to build your home. However, there are some things you can do to help you make a decision about whether you prefer custom-build or self-build.

The pros

  • Building your home is often cheaper than purchasing a property from an agent.
  • Budgeting correctly can help you get a home that is worth 20% more than the land and construction costs.
  • You can choose your design and fixtures.
  • You can make your home more efficient and cost-effective.
  • VAT can be reclaimed on labour and material expenses
  • Stamp duty is assessed on the land’s cost rather than the home’s value.
  • Even with the government’s assistance and loose planning restrictions, finding the perfect plot can be difficult.
  • While building your property, you will need somewhere to live. You could end up paying for two homes.
  • The task of managing the project can be time-consuming and stressful, since you will need to coordinate with multiple contractors.
  • Cash flow can be a problem when you have no savings or mortgage funds that are being released in stages.

The cons

Even with the government’s assistance and loose planning restrictions, finding the perfect plot can be difficult.

While building your property, you will need somewhere to live. You could end up paying for two homes.

The task of managing the project can be time-consuming and stressful, since you will need to coordinate with multiple contractors.

Cash flow can be a problem when you have no savings or mortgage funds that are being released in stages.

A step-by-step guide to building your home

  • Locate a plot that is suitable for your project
  • Arrange a mortgage, or other finance
  • A budget that is realistic and clear should be established. In case of an increase in costs, a contingency fund (at least 20%, but better than nothing) will be helpful.
  • Design your home with a professional
  • Before you submit your application, take a look at your planning options. Get some pre-application advice from the local authority.
  • Choose a building method. Are you going to do the work yourself or hire a company to help?
  • You need to get planning permission, building control approval, and any other insurance that your project may require.
  • Plan your plot
  • Your home is yours
  • After the house is completed, you can obtain your completion certificate and check for any snags. You can also reclaim your VAT within three month.