Grand designs on building your own home? It needn't cost the earth

By Nick Elgey, managing director of Cumberland Estate Agents

Last updated at 13:20, Monday, 05 December 2011

To many people not involved in the property industry the thought of building your own house is daunting.

However, with detailed research, careful planning and the engagement of sound advisors and tradesmen it can be a hugely rewarding experience allowing you to create your dream home, in some cases at a significantly lower cost than its value on completion.

The starting point is to find a suitable building plot with planning consent for the type of property that you require. Planning consent will either be “outline” or “detailed”. Outline planning consent simply provides permission in principle for the construction of a property which is then conditional upon obtaining detailed planning consent where full plans and various other information on the proposed property are approved.

When you have found a plot that you want to buy, unless you have cash funds for its purchase, you will need to arrange a mortgage which will normally require the existence of a detailed planning consent.

Deciding on how much you offer for a plot will depend on a number of factors, but primarily on the total budgeted development costs in comparison to the projected value of the property once it is completed. It is, therefore, vital to seek professional advice on these items and to make sufficient allowances in the budget for contingencies, extras, professional fees, landscaping and all required finishing touches which can sometimes be overlooked during the research stage. Obtaining self build mortgage finance for the construction programme will also involve a lender’s approval of your budgeted costs and the projected value of the property on completion.

A further consideration to address is where you will live during the course of the project so paying for rented accommodation may also need to be included in the budget.

The key professional to assist you in the project is an architect who will obtain building regulation approval for the detailed plans and then progressively inspect the construction of the property at various stages in order to report to your lender and provide certification on completion to verify that the property has been constructed satisfactorily.

There are choices on how to organise the construction. Normally, the most expensive way is to engage one builder to control and complete the whole project to your specification. This selection would normally be determined by a tender process. The least expensive route should be achieved by engaging and co-ordinating each of the various tradesmen separately and buying all of the building materials yourself allowing you to recover the VAT. However, in comparison, this approach is management intensive and, in most cases, will need the services of an experienced project manager.

The ideal out-turn is the profitable creation of your dream home on time and on budget, but this will largely depend on the quality of your preparation and the competence of all those involved in the project.