Self Build Costs - Part I
Building a self build home can prove to be a wise financial investment but given the scale and complexity some of the costs may be less obvious when preparing your budget.
Finance Costs and Redemption Penalties - £450 +
Borrowing in order to fund a self build home has a range of costs associated with it. Although costs will vary the majority of self builders are required to pay a lender's survey/valuation fee on their plot or renovation project of around £350, in addition to a further fee of £40-50 for each of the interim inspections required before releasing of the staged mortgage payments. Fixed rates and other offers may have an arrangement fee of £300-400.
If a self build mortgage with the stage payments made in advance is being considered, there will be an arrangement fee and a mortgage guarantee premium starting at £600. While this may seem expensive, there are no interim inspection fees.
If a change lender is required to obtain a stage payment mortgage, redemption penalty charges must be considered.
The most obvious of all these costs is the interest rate you will pay on the mortgage - it pays to shop around.
Surveyor and Engineer's Fees - £300 +
Building plots of land will often require a site survey to check boundaries, and any other variables that should be investigated. The survey will cost £300-£500.
Planning permission may require that an archaeological survey be undertaken before either the granting of detailed consent or commencement of work. This would cost around £3,000 and considerably delay progress should there be any findings. You may then need to postpone/cancel arrangements made and take into account any fees that may be incurred.
A soil investigation may also be required and in turn that can mean that an engineer will have to be involved in foundation design, increasing costs by upwards of £1,000. Certain design features will also necessitate the input of an engineer and calculations, occasioning additional costs of around £200.
Legal and Estate Agent's Fees, Stamp Duty and Land Registry Charges - £400 +
Buying an average building plot and selling the average home can involve the self-builder in legal fees of up to £1,000 for the two transactions depending on just how complicated the title is. In addition, on the purchase of any land or property, Stamp Duty is payable at 1% of the price over £60,000, rising to 3% above £250,001 and 4% above £500,001. There is also a requirement that all land and property transactions are registered with HM Land Registry. The fees for this start at just £40 for purchases below £40,000, up to a maximum of £800 for transactions in excess of £1m.
Estate agent's fees for the sale of a house, assuming sole agency, usually amount to 1.5% of the sale price plus VAT.
Extra Labour Costs Caused by Delivery Delays From £100 +
Time is money in any building project and delays caused by lateness or non-delivery of materials can incur extra labour costs for waiting time, plus increased finance, rental and hire costs. Most materials are available from builder's merchants, but if you wish to take advantage of reduced prices for full loads you will probably want to be quoted for direct loads, from manufacturer to site. Bricks and floor beams are usually available within a two week period, whilst blocks have a lead in time of about a week. Trusses and other joinery products, such as staircases and windows, can often have a lead in time of three weeks and at certain holiday times this can be extended. Timber frame manufacturers often have lead in times from order to delivery and erection, of anything from eight to twelve weeks and, unless this is allowed for, it can result in all work on site coming to a grinding - and very expensive - halt.
Planner's Requirements for Expensive Materials From £1,000 +
Many of the timber frame manufacturers base their indication of average completion costs, after erection of the frame, on fairly standard - if not cheap - materials. Urban sites in the less desirable or attractive areas can often be developed using these materials. However, many self-builders are building on rural or semi-rural plots where the planners may be very sensitive about which materials are appropriate. Changing from a rendered or Fletton brick external wall finish to a hand made brick can treble the material costs, whilst natural stone could be four times the price. If stone features are required then these can easily add £1,500 to a 140m2 house. Changing from an interlocking concrete roof tile to either plain clay roof tiles or natural slates would add around £3,500. These materials are also likely to mean higher labour costs.
Conversely, many local authorities frown on the use of PVC-u joinery in sensitive planning situations, making a possible saving of around £2,750 if softwood is chosen.
Wastage of Materials From £300 +
Self builders often use second hand or re-claimed materials to blend in with existing building - these often carry a premium. It is often necessary to over order as it can be very expensive or impossible to obtain extras in small quantities. Bricks might be of uneven shape or consistency, making the job of selection and laying a slower process increasing labour costs. Slates and tiles might well need re-drilling or shaping and this too slows down the work, therefore increasing the price.
Certain new materials such as bricks and blocks have to be ordered in full loads, meaning that you have to buy more in the first place and that, on tight sites, there might be additional costs in disposing of the excess.
Warranties and Insurances From £1,500-£2,000
Self building without adequate insurance and warranties, can be a false economy. If you are using a builder and are not intending to supply any materials yourself, then relying on their site insurance may be considered. Self build insurance policies are available and can cost between £500 and £1,000 depending on the size of the overall contract.
Structural guarantee insurance and warranties for self builders is becoming increasingly available with the average cost between £600 and £1,000.
Find out more about costing a self build in part II