“My home is my castle” – as the Brits say, certainly works in life. And not necessarily you have to live in a castle or manor, to see the correctness of the above statement. Dream house, which meets our own aesthetic needs (it can be a self-build house), is a refuge of family love and, becomes our support in the hardships of everyday reality. It is like our fortress.
Ever wonder how the house of your dreams would look like? What would be room arrangement? Which part you would give most of attention. Which is the favorite part? What would be the finishing materials – whether you prefer ultra-modern architecture, or maybe you’re a supporter of the classics. Close your eyes for a moment, lean back in the chair and start dreaming …
As it happens, you are not the only dreamer on “Our Island”. In the UK, the British Isles each year 25 thousand families or individuals begin construction of the “house of their dreams.” If you think that this is impossible for you, because you do not have any experience in this industry and you are afraid of the following tasks like getting architectural project, buying building materials and negotiations with contractors – we have the good news for you- from the number of stated above -the 95% and more have never before been building their own house! Also in this group, you will find full range social groups, – from 30-40 year olds, young families, that they need more space for their growing family, to retirees, whose children “left the family nest” and they wish to replace their house to a smaller, more convenient and cheaper in maintenance. So practically there are no age restrictions to kick a first shovel.
It is important to prepare well for the planned investment – set a budget, order of scheduled tasks and get as much information on the subject. It is really worth to expand your knowledge, there are many books on the subject available on the market. It is also a good practice to go to the presentation / building exhibition etc, and ask as many questions as possible when chatting with friends who have a similar experience. As they say – who asked not stray! This new challenge can also be an interesting experience for us and open the door to the new business. The last few years has witnessed a very dynamic development of residential construction, due to increased demand for real estate and a strong influx of immigration to the UK. Some say that we are facing now the “housing crisis” and the properties listed in real estate agencies disappear within literally one day – which, moreover, can be observed in the ever-growing housing prices.
At the present moment – self-built houses constitute up 15% of the overall construction market in Great Britain – which is more than any of private developers operating in the UK.
Only few years ago, banks referred with a provision to people who wish to take credit for self-build home, and suppliers of building materials kept the distance to the clients from outside the industry.
Nowadays, the situation looks different – wholesalers such as Jewsons or Travis Perkins support private residential customers and financial institutions offer loans tailored to self-builders.
Why it is worth to start a self-build house?
Firstly, we can really save a large sum. Deciding to buy a home from the developer you will pay from 10% to 30% more, than if you are going to build it yourself. Saved money will allow us to take a smaller loan, or even to live in the area, which normally would be out of our reach.
By controlling the construction process of your own self-build house – you will pay attention to details and materials used. For example – properly insulated new house has a higher thermal specification than the typical house on the market.
Entrusting the construction of our own house to a large development company, we can be unpleasantly surprised at low cost and quality finishes, which are inadequate to a high price of the new property.
The fact worth noting is that with the self-build house, we are entitled to significant tax discount. All building materials as well as labor are exempt from VAT. If you hire a single contractor – all bills for its services and the purchase of building materials should not contain VAT. Or if you are a sole construction manager, you need to pay VAT. However, after three months from the date of completion of the construction, you have the right to send all receipts containing VAT to HMRC and receive a refund. This tax relief also applies to persons not registered as VAT.
The above allowance is a 20 % return on investment, which can be later used for paying for interior finishing materials beautiful landscaping. What’s interesting – VAT refund can also apply for conversions of existing buildings (such as agricultural buildings, offices). Relief does not support modernizations of residential dwelling (like popular extensions) or renovations, but if the building was not used for at least three years, or is converted to a dwelling, in this case, we will pay the reduced VAT rate of 5%.
What is the cost of Self-Build House?
At current prices of building plots – about 40-60% investment will dedicate to the purchase of land. If the area is located in a good neighborhood – this percentage may even increase. It is important to check the quality of the soil on the plot, because if it may require special foundations, which can significantly affect the cost of the construction. The cost of the building itself largely depends on the size of the planned house, type of used materials and labor cost that apply in particular area of the UK.
In this regard, you should seek advice of an architect or construction company. In the industry there are certain standards in construction costs – for example, the price per 1m2, which are updated annually and easy to find in such publications as Spon or Wessex. On the market there is also available software to calculate the construction costs based on the parameters of geometry and size of the building and the materials used (eg. EstimatorXpress). After entering these data into the system, which is connected to the current database of materials prices, you can get a full estimated cost of the self-build house project. You can try it yourself or ask a specialist for help in this matter. You should also discuss with the architect the alternative methods of construction technology, which can significantly reduce the investment budget – for example, modular construction (this topic is discussed in an article available on our website)
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It is also recommended to negotiate the price with the contractor and supplier of materials. However, with practical experience on the site, there are always some “surprises” on site which cause additional costs – like complications on site with the layout of underground installations, etc. Therefore, it is advisable to be prepared for similar situations with financial security of the value of approximately 10% of the cost of our investment.
If you are interested in the Self-Build House project or have any questions about estimated investment cost – please contact Plutos Power Team.