You might have your eye on the perfect plot but how much will your dream home cost to build? Our expert guide will help you to plan your budget so you can get your finances in place
So how much does it cost to build a house? It’s a big question that’s not easy to give a direct answer to — however, it’s the first hurdle you’ll need to make it over to decide if building a house is right for you.
The truth is, a self-build can cost almost anything from a couple of hundred thousand to several million. Many variables affect the overall cost of building your own home but with a guiding hand, you can break down the overall cost into smaller sections to decide where to spend your money. But building your own home has the potential to pay dividends. A well-considered homebuilding project could potentially net you a profit of 25 – 30% when (or if) you come to sell.
WHAT SHOULD I SPEND?
The real answer to how much it costs to build a house depends on how much you’ve got to spend. A self-build project can be such a personalised experience that there is likely an option available for you no matter what your budget is (within reason, of course).
Determining how much you have to spend is a case of looking at:
● Your savings
● Equity from the sale of your current home
● Funds available via a self-build mortgage if required.
The first expense, before you even start to build your home, is the plot (unless you already own one). You’ll need to factor in the costs related to buying the land, alongside legal fees and stamp duty. Visit hmrc.gov.uk for the latest Stamp Duty Land Tax (SDLT) rates.
Once you’ve worked out this cost, subtract it from your savings, equity and mortgage and you’ll be left with your budget. However, we suggest setting 10 – 15% aside as your contingency fund straight away. This can be used to cover any unforeseen circumstances.
COSTS FOR A PLOT
You can get a good idea of plot prices by visiting Plotfinder.net, the UK’s largest database of small development sites. While this will give you an outline figure for different kinds of plots in different areas, there are plenty of other ideas around for finding a plot which may be more affordable.
Another approach to valuing a plot is to reverse engineer it from the value of the build potential. According to expert self-builder David Snell, the cost of a self-build should adhere to a ‘third, third, third’ principle, with the plot cost, building cost and profit to be made. This gives you
