Building your own home from scratch is an exciting project which allows you to create your ideal living space. It can also be an expensive and long-winded process if you don’t plan properly and hire the right contractors or have a tight rein on your finances. Here are some of the costs to consider when building a house:
Buying a plot of land – depending on its size, location and whether it has been granted planning permission, the cost of a plot of land will vary significantly. However, as a guide, Plotfinder currently have available plots starting at £85,000 in Cardiff, £40,000 in Bristol and £70,000 in London.
Planning permission application – if your plot doesn’t come with planning rights you will need to apply to the local building authority for planning permission, an application costs £335.
Building regulation approval – all properties must comply with building regulations. Inspections of building plans and the site need to be carried out, this can cost between £500 and £800.
Warranties – different length warranties are available to cover the materials and workmanship of your new-build home. The price will vary depending on which provider you choose; for example the National Register of Warranted Builders have two year warranties which cost 1% of the property price, this goes up to 2.2% for a 10 year policy.
Stamp duty – you don’t have to pay this if your property is worth less than £60,000. If it costs between £60,000 and £250,000 then you will be charged 1% of the property price; this rises to 4% if the house is worth over £500,001.
Land registry fees – you must register all property and land transactions with HM Land Registry, these cost just £40 for purchases below £40,000 up to £800 for ones priced over £1 million.
VAT – one of the benefits of building a property from scratch is that you can claim back the VAT on most of the materials you use. This doesn’t include VAT on carpets and furniture, white goods or building services.
The cost of building a new house will also vary depending on which building methods you use:
You will need to factor in costs for interior design, furniture and fittings such as window blinds. The price of these things will vary depending on your personal taste and the size of your property. Get help from an interior designer if necessary to turn your dream home designs into a reality.
Don’t forget to factor in the cost of hiring contractors to build your new home. When looking to hire, get multiple quotes and check references and insurance credentials as well as interviewing the contractor. Don’t forget to draw up a detailed contract and be prepared to pay some costs (for materials) up front. Prices will differ according to the area you live and the type of contractor you hire:
If you need help with budgeting and costings it’s a good idea to hire a quantity surveyor to keep your new build project on track.