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Building your own house

Learn about the basics of building your own house, including how to finance a self-build or custom-build home. 

In this article
How does Right to Build work? What's the difference between self-build, custom-build and modular homes? Self-build mortgages
The pros and cons of building your own home Building your own home: step-by-step Get expert help with financing your self-build

Whether you're planning a 'grand design' or simply want something unique to call your own, increasing numbers of people are turning to self-build to create their dream home.

And with the government's target of 20,000 self-built or custom-built homes per year by 2020, steps are being taken to remove some of the hurdles faced by would-be house builders.

Councils must now help people secure plots, and mortgage lenders are being encouraged to provide more specialist deals for self-build projects.

Looking for a self-build mortgage?

Which? Mortgage Advisers can advise on the best option for financing your self-build project and take you through the entire mortgage process.

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How does Right to Build work?

Finding the right plot of land can be a major obstacle for people looking to build their own home.

The government is taking steps to make this process easier, by demanding that councils keep Right to Build registers, containing the details of anyone who has expressed an interest in a self-build project.

Once you've signed up to a register, the onus is on your council to find you a suitable serviced plot within three years.


Right to Build registers: are there any restrictions?

At this stage, the registers are only compulsory for councils in England, and only EU or EEA citizens aged 18 or over can sign up.

To help manage demand, some councils may add additional criteria to their registers. For example, you might need to already live or work in the local area to get priority.


Right to Build: what is a serviced plot?

A serviced plot is a piece of land that has electricity, water and waste water connections, and access to a public road.


Right to Build: will I get a suitable plot?

This depends on various factors including your location, local council and individual needs.

In many areas, plots are likely to be on brownfield land that has been identified for redevelopment - which naturally wouldn't be suitable for self-builders looking for a countryside plot with a few acres of land.

This means it's best to treat the Right to Build register as one of several options, rather than relying entirely on it.


Right to Build: what are the alternatives?

While residential property portals occasionally list plots of land for sale, they're unlikely to be your best option.

Online resources such as the Self Build Portal, PlotBrowser and Plotfinder are all popular with self-builders.

It's also worth asking your local council about land where planning permission has been granted but nothing has been built.

What's the difference between self-build, custom-build and modular homes?

'Self-build' and 'custom-build' are often used interchangeably - but technically speaking, there are some differences.


Self-build homes

Self-build projects usually involve a more hands-on approach, where you buy a plot, prepare it and organise the design and construction of the home yourself. 

This can mean getting your hands dirty and physically taking on some of the building work yourself, or managing contractors to take care of each aspect of the project.


Custom-build homes

With custom-build, you work with a developer to design and build your home.

You will usually buy a plot of land on a development and work with the developer to create the right design. The developer will then manage the building project.

The main benefit of custom-build is you can get the bespoke design you want (or at least choose between various designs) without the stress of obtaining planning permission or managing the project yourself.


Modular homes and kit homes

The government is now taking a greater interest in modular (factory-built) homes as it looks to solve the housing shortage.

The term 'prefab' often has negative connotations, but with modern technology it's possible to create factory-built homes (or modular elements of homes) to the same standard as those put together on-site.

The big developers are starting to take an interest in this method of housebuilding, too. In January 2018, Berkeley Group gained permission to build a modular construction factory in Ebbsfleet, while in May, Countryside Properties announced plans to build its own timber frame factory. 

In theory, factory-built elements are subject to greater quality control (meaning fewer snags) and can be created at great speed and volume.

If you're interested in a 'kit home', you'll find plenty of options on the market, from timber-frame packages to more bespoke eco-friendly designs.

Self-build mortgages

One of the biggest challenges of building your own home is finding a way to make your project financially viable. Unless you've got lots of savings or are selling your current home to fund the project, you'll need to get a self-build mortgage.

Self-build mortgages are offered by specialist lenders, as well as some mainstream banks and building societies. 

With self-build mortgages, you'll usually receive your funds at different stages of the build process.

A valuer will visit you at the end of each major stage before the money is released, which can cause issues with cash flow if you don't have some extra money set aside.

While some lenders do offer traditional 'advance' mortgages to self-builders, these are less common.

Self-build mortgages usually require a hefty deposit - in some cases you'll only be able to borrow around 75% of the cost of the land and 60% of the cost of the build. 

There are signs that mainstream lenders are beginning to increase their self-build offering. In May 2018, Ipswich Building Society enhanced its lending criteria to accept builders using modern methods of construction (MMC), thus making it easier to access funds for a self-build project.

Looking for a self-build mortgage?

Which? Mortgage Advisers can advise on the best option for financing your self-build project and take you through the entire mortgage process.

We’re closed. Open Saturday from 9am
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Your home may be repossessed if you do not keep up repayments on your mortgage

The pros and cons of building your own home

Choosing whether to build your own home isn't an overnight decision, but there are some basic things to consider which might help you decide whether self-build and custom-build are right for you.

The pros

  • Building your own home is usually considerably cheaper than buying a property from a developer
  • If you budget correctly, your finished home could be worth around 20% more than its combined land and build cost
  • You'll be able to choose your own design, fixtures and fittings
  • You can create a more energy-efficient home, which will be cheaper to run
  • You can reclaim VAT on your labour and material costs
  • Stamp duty is charged on the cost of the land rather than the the value of the finished home

The cons

  • Finding the right plot can be difficult, even with government help and relaxed planning restrictions
  • You'll need somewhere to live while building the property, so you could find yourself paying for two homes
  • Managing the project can be stressful and time-consuming, as you'll need to work with various contractors at the same time
  • With mortgage funds being released in stages, cash flow can be an issue if you don't have significant savings to draw upon

Building your own home: step-by-step

  1. Find a suitable plot for your project
  2. Arrange a mortgage or alternative finance
  3. Set a clear and realistic budget, with a decent contingency fund (20% at the very least, but 30% is better) in case costs increase
  4. Find someone to design your home
  5. Look into your planning options and get some pre-application advice from your local authority before submitting your application
  6. Decide on a building method - are you going to manage the project yourself or use a package company?
  7. Get planning permission, building control approval and any special insurance your project requires
  8. Prepare your plot
  9. Build your home 
  10. Once the home is ready for you to move into, obtain your completion certificate, check the house is snag-free and reclaim your VAT within three months of completion

Get expert help with financing your self-build

If you'd like to talk to an expert adviser about your mortgage options, complete your details and Which? Mortgage Advisers will give you a free call back.

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Correct as of date of publication.


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