SOARING house prices have caused budding buyers to turn to building their own home instead.
According to the Office for National Statistics, the average house price has rocketed 10.9% over the past year to £277,000.
A stamp duty holiday during the Covid crisis and a lack of homes to buy has caused buyers to lock horns in bidding wars – driving prices up.
It means that people are looking at different ways of getting on the ladder while they are being priced out of the market.
You could potentially save a bundle by taking on the ultimate DIY project and building your own home.
But make sure you factor in the hard work and extra fees involved – we explain everything you need to know.
How much does it cost to build a house?
It is estimated that the building costs will be £1,800 and £3,000 per square metre.
With the average UK property (a three-bedroom house) measuring around 800sq ft or 74sq metres, a self-build will cost between £133,000 and £222,000.
Then you should add an extra 15% to pay for professionals such as engineers and architects, and it’s savvy to put an extra 10% aside to cover any unforeseen costs.
These can include planning applications, lawyers, demolition and self-build insurance.
A planning application will be £462 if it is approved immediately, but can run into thousands if there are appeals or council push back.
Site surveys and reports from structural engineers can be £500 a pop, while self-build insurance is approximately 1% of total costs.
The final bill for demolishing or clearing the site can run into the thousands.
To purchase somewhere to build, you must pay Stamp Duty Land Tax on land worth over a certain price.
In England or Northern Ireland, the current threshold for residential land tax is £125,000.
If you already own a home you may have to pay 3% on top.
Next, you need to consider construction costs.
The superstructure – which includes the roof, roof beams, walls and external cladding – usually eats up 30% of the budget.
Timber frames rather than the cheaper brick and block can cost 50%.
Foundations and flooring will make up most of the remaining 70%.
On average, the roof and kitchen will cost between £5,000 and £6,000 each.
A simple ensuite bathroom would be about £1,500, while a fancier one with upgraded fittings and a higher spec is usually around £6,000.
Depending on the size of the house, wiring varies from £3,000 to £5,000. It goes without saying that this is definitely not part of the build where you can cut corners.
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Is it cheaper to buy or build a new home?
Building your own home can be much cheaper than buying an existing house.
If you do the work yourself, you can lower costs by up to 40%.
But even hiring builders to do most of the work can save money, while project managing the build can also significantly cut costs.
You pay less Stamp Duty because you are taxed on the value of the land, not the completed property.
This can be worth 20% more than the costs of the land and construction.
You can also claim back the 20% VAT charged on some of the materials.
However, mortgage costs will be higher. Some two-year fixed and variable rate deals start around 5%.
In Wales you can get loans worth up to £400,000 to help cover the cost of building their own home under the Self Build Wales scheme.
What is the cheapest type of house to build?
Smaller will of course be cheaper, but even small will be bigger compared to buying one pre-built.
A self-built house of 150sq metres would still be larger than an average 100sq metre, four-bed house from a developer.
To maximise space especially on a modest plot, it’s best to build a house rather than a bungalow unless you really need just one floor for mobility reasons.
A bungalow has the same foundation, roof and first-floor wall costs, but you get a much smaller property.
A simple design like a Georgian-style box house will limit the need for expensive architects.
