Why successful self-build doesn’t need to be difficult
Advice from Newbury Building Society on constructing your very own dream home
CURRENTLY just seven per cent of the homes in UK are self-built, but with the prospect of the number of new builds increasing across the UK, many are starting to look to this option of homeownership, writes Luke Pummell from Newbury Building Society. Most self-builders are tempted by the opportunity to build a home to their own design and personalise it to suits their own tastes.
Starting a self-build project can be daunting as there are numerous ways in which it can be achieved.
There are many factors to consider and when it comes to arranging a self-build mortgage the task is simple in theory, but most people are uncertain of where to start. The good news is that the process doesn’t need to be difficult.
Where to build?
This can either mean finding a plot of land with planning permission, finding innovative ways of separating land with an existing home on it, a renovation or a conversion project.
The land
You may be lucky enough to already own the plot of land if it forms part of your current property. You will need to appoint a solicitor to separate the title from the existing property.
If you intend to do this, and you have a mortgage on your current home, you will need to gain the agreement from your current lender to release the land from their security. If you are purchasing a plot of land to build on, you will need to consider its location and whether it has planning permission. If there is no existing planning permission, your choice of lender will be limited, as generally you will need this to purchase land with a mortgage.
Planning permission
If you are building on a plot you own or wish to make any changes to pre-existing
permissions, you will need to apply to your local authority for planning permission.
It is important at this point to ensure you have appointed a qualified architect to ensure the design of the property will satisfy planning requirements.
Cost research
It is important that before embarking on a self-build project you understand the costs involved. A lender will need to know how much the project is going to cost and you will also need to understand if you can afford the build.
Once you have highlighted a plot at the time of designing your home it is a good idea to engage with builders and tradespeople to get an outline indication of how much the build will cost.
There are other costs to also consider, solicitor fees, planning fees and the cost of a new homes warranty (which a lender will insist on).
It is always important to build a healthy contingency in as well, usually 10 per cent of the build cost is advisable.
The lender
Securing finance for a self-build home may not be as daunting as it sounds. Self-build mortgages are not so different from ‘regular’ mortgages. The amount you can borrow is determined by assessing your income and commitments.
The mortgage amount will also depend on the costs of the project and the value of the completed home.
Funding can be made in set stages throughout the project as you build your home.
What helps is that self-build mortgages are offered on an interest-only basis which will help keep initial costs down during the build.
The beauty of self-building is that, if managed correctly, it offers a cost-effective way of owning your dream home based on your personal choice.
Self-build doesn’t always mean excessive expense and can include ‘eco’ elements which result in a home which is more energy efficient and has less environmental impact compared to older housing stock.
Exceeding a build budget is not the norm if the build is managed correctly, and the reward? A home which is perfectly suited to you and your lifestyle.
If you’re looking to build your own home and would like to talk to us about a mortgage, please contact us and arrange an appointment by video or by telephone.