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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

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.

In fact, research by the National Custom and Self Build Association (NaCSBA) in October 2020 found that nearly a third of adults are interested in designing and building their own home.

In this guide, we explain what the government and local councils are doing to help self-builders, and offer advice on how to finance your build. 

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 has been 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.

Councils must consider the registers as part of their planning duties, and provide permission for sufficient self-build and custom build plots to reflect demand within three years. 

In October 2020, the government announced a review into Right to Build, which seeks to 'ensure councils provide enough land and take proper consideration for self-build when making planning decisions'. 

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.

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.

It usually has outline planning permission in place, often with a ‘Plot Passport’ setting out some rules, such as maximum volume and position on plot.

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.

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 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.

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. NaCSBA research found 21 building societies offered self-build or custom-build mortgages in October 2020.

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

Some loans rely on valuers visiting your site at regular stages to provide a valuation to the lender - which could potentially leave you short of money to progress work if the site is down-valued.

Some specialist self-build deals instead release funds linked to the cost of each stage of building work. As these aren't reliant on the overall value of the site, they can offer greater peace of mind for self-builders. By providing funds in advance, they can also cut the up-front contribution you'll need to make to the build costs.

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
  • Self builders are exempt from the Community Infrastructure Levy (not all councils apply this charge), but you must follow the process accurately

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

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