For the use of mortgage intermediaries & other professionals only

Self Build - Project Planning

We are no longer accepting new applications for Self Build mortgages. The below information is provided to assist you with any existing applications.

Overall, clients are encouraged to allocate the very highest priority to the planning stage of their self build project and to move to a detailed plan as quickly as possible. A clear vision of what needs to be done, when it needs to be done, who is going to do it and what it is going to cost, is essential.

One of the most common and significant reasons why self build budgets are exceeded are delays, which can create the knock on effect of contractors being unable to begin their work whilst still having to be paid for their time.

However detailed the project plan, it remains sensible to include an additional 10% - 15% contingency sum into planned costs to cover unforeseen increases and potential mortgage interest rate increases.

Build costs

For most clients estimating the actual build cost of the project is the best place to start. Arriving at this initial figure will enable them to:

  • Decide if the project is worth pursuing at all
  • Work backwards to decide how much money is available to buy a plot of land
  • Calculate how much money may need to be borrowed
  • Get an idea of the type of house that can be built within budget

The main factors that will affect build costs are:

  • Type of construction
    Traditional (masonry or timber frame) or Specialist
  • Choice of materials
    The number of bespoke or design items involved in the build (together with their overall quality) will have a considerable effect on cost
  • Where it is
    The costs of materials, labour and equipment can vary widely depending on geographical location
  • Size
    Economies of scale can often apply
  • Site conditions
    Contaminated ground, a steep slope or problems with access can be expensive
  • The number of specialist contractors to be employed
    Whilst it is true that the more work that your clients do for themselves the cheaper it will be, it is important that they properly assess their skills and experience together with the amount of time that they will realistically have to devote to the project.

Most clients will want to appoint a qualified and experienced architect to act on their brief and design the house. An architect can often effectively coordinate the whole project by negotiating and advising on statutory requirements such as planning permission and buildings regulations approvals. The architect will also be able to:

  • inspect and certify the building work as well as provide guidance on costs
  • advise if your clients need to employ other specialists (for example, engineers or surveyors)
  • help to find appropriate people to undertake the construction work.

Properly qualified architects are shown on the public register held by the Architects Registration Board (ARB) and clients are advised to check this register before making an appointment.

Go to the Architects Registration Board website to find out more.

Other costs to remember

These will include:

  • The cost of buying the land
  • Professional fees - Typically incurred from an Architect, Planning Consultant, Bricklayer, Electrician, Engineer, Groundworkers, Joiner, Material Suppliers, Plasterer, Plumber Surveyor and a Solicitor
  • Borrowing costs (including mortgage set up costs and repayments)
  • Insurances

Reclaiming VAT

New houses may be zero rated for VAT, which means that self builders can reclaim most (but not all) of the VAT that they incur during the build. All reclaims are handled by HM Revenue and Customs (HMRC) and it is essential that clients read and understand the rules surrounding VAT reclaim. Claims need to be made within strictly observed time limits.

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