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Could YOU be a Grand Designer? Red tape cut, councils told to find you land and profits of up to 30%

Dozens of hopeful homeowners are crowded around a stall, excitedly clutching hand-drawn plans for their dream properties.

A team of experienced builders is hosting an ‘ask the expert’ session and those queuing are desperate for help getting projects off the ground.

They are among 30,000 budding DIY housebuilders who have descended on The Homebuilding & Renovating Show at Birmingham’s National Exhibition Centre.

Inspired by hit TV shows such as Kevin McCloud’s Grand Designs, they are hoping to pursue the dream of building their own home.

House proud: Designing and building your own home is a booming business. Last year, so-called self-builders made around 15,000 homes

The atmosphere is buzzing. There are a handful of families and young couples, but most visitors are in their 50s and 60s.

Hundreds of stalls are selling Scandinavian and Alpine lodge-style homes, design and building services and renewable energy heating.

There are workshops on everything from finding land and applying for planning to selecting and dealing with tradesmen.

Designing and building your own home is a booming business, particularly among those near retirement. Last year, so-called self-builders made around 15,000 homes.

That is expected to soar following the launch of the Government’s Right to Build register in April 2016, which means councils must relinquish land for residents or groups of locals to build on within three years.

And some are finding it is better value to build than to buy as you don’t add to a developer’s profits.

Experts claim that once finished, a self-build property is typically worth 25 per cent more than it cost to build.

Rachel Pyne, client services director at self-build and financial advisers Buildstore, says: ‘It depends on the location, specification and how you go about building your home, but once completed it is typically worth between 15 pc and 30 pc more than it cost you to build.’

Here, Money Mail investigates how homeowners can become DIY housebuilders — and whether the rewards are worth the risk or the hassle.

Sleepless nights, but it was worth it 

Julie and Andy Voller found their dream plot of land while sailing their boat along a stretch of the Thames near their home in Staines.

The derelict property was on half an acre of land running down to the riverside, complete with its own mooring.

They pulled up and looked around the land, before calling the agent to find out the price.

Julie and Andy Voller found their dream plot of land while sailing their boat along a stretch of the Thames near their home in Staines

Julie and Andy Voller found their dream plot of land while sailing their boat along a stretch of the Thames near their home in Staines

They already each owned a house from previous marriages but wanted to sell up and build a home together. And after tense negotiations, the vendor accepted an offer for £705,000.

Julie and Andy decided not to use an architect, so to get inspiration for the design and layout of the house, they went to every homebuilding show they could and sailed along the river to look at other homes.

Julie, 58, an IT project manager, says: ‘There was another self-builder living on the river. We told them about their plans, and became friends.

‘They helped us with our budget and gave us contacts for a roofer. Every tradesman that we used came thanks to local recommendations.’

Julie and Andy decided not to use an architect, so to get inspiration for the design and layout of the house

Julie and Andy decided not to use an architect, so to get inspiration for the design and layout of the house

The couple worked closely with a specialist firm, Fleming, that built the timber frame, but wanted to be hands-on with the building work, so Julie gave up her job to commit all her time to the project.

But it wasn’t all plain sailing.

The day before the builder was due on site he called to check what type of foundations were needed.

‘I thought: ‘Why are they asking us, it is their job to know,’ ‘ Andy says. Deciding not use an architect or a project manager meant they were unaware their riverbank home needed reinforced foundations.

‘At the 11th hour we were scrabbling round to find an engineer to tell us what to do.’

The they went to every homebuilding show they could and sailed along the river to look at other homes

The they went to every homebuilding show they could and sailed along the river to look at other homes

Andy had to make a decision so the builders could proceed. ‘We had sleepless nights worrying if the foundations were strong enough until we had the structure finally signed off.’

In total they spent £1.2 million to create the perfect home for their retirement. Once complete, it was valued at between £1.4 million and £1.6 million.

Julie adds: ‘The most stressful part was finding the right builder for the job. Everyone wanted to manage the whole project but we wanted to keep control of the build.’

HOW ARE YOU GOING TO PAY FOR IT?

First work out what you can afford to spend. Most DIY builders use cash to pay for their building project, which they have typically made from a previous house sale.

But around 40 per cent of self-builders still fund their new home with a mortgage, according to Buildstore.

It is important to speak to an adviser who specialises in self-build mortgages early on to check you have a large enough deposit.

Borrowers can take out a self-build mortgage with a 5 per cent deposit but the choice of deals is limited. The widest range of mortgages is available to those with at least a 15 per cent deposit.

Around 25 lenders, including Halifax, offer self-build mortgages, with rates from 3.99 per cent to 5.24 per cent and a mortgage term of 25 years.

You receive the loan in four or five phases at key stages of the build — rather than in a lump sum.

Once the house is built, your lender should let you switch to a traditional mortgage, penalty-free.

Another way to raise the money to build your dream house is to release cash from your existing home.

You can do this by taking out a short-term loan secured against the property, known as a bridging loan.

You do not make monthly payments, the interest is rolled up and repaid when you sell the house.

Over-55s could also use an equity release mortgage to access the cash in their home — again no monthly repayments, the debt is repaid when you die or go into care.

If you raise funds this way ensure your lender will let you transfer or ‘port’ your loan to your new home once it’s completed.

FINDING THE LAND IS JUST THE START…

Your budget has to cover the cost of land, building work, legal fees, any loan repayments and stamp duty.

Self-builders get a better deal on stamp duty than those buying a ready-built home because tax is only payable on the cost of the land, not the value of the finished project.

Register with local estate agents and keep in contact so you are in their minds if a plot comes up.

And look into local and national land auctions. Local auctions tend to attract a lot of interest in a handful of plots. 

But self-build expert Jason Orme says buyers should not be put off. ‘A lot of people go along out of curiosity but hardly anyone is in a position to buy a plot there and then.

‘You need to arrange finances and a valuation in advance so you can put your deposit down on the day.’

National auctions are typically held in arenas such as football stadiums and run by large auction houses.

Mr Orme says: ‘There are hundreds of plots up for sale, and they can still be rich pickings. Do your homework before you go. Get the catalogue and find which plots are in your area.’

Online search tools such as PlotBrowser, Plotfinder.net, Plot Search and The Land Bank Partnership collectively list thousands of plots and are free to sign up to.

Add your name to your local authority’s Right to Build register.

Under English law, councils have to keep a register of anyone who wants a plot of land to build their own home. 

Glasgow also has a version of the scheme. By registering your interest the local authority has to make land in your area available.

Since the register was launched in 2016, 40,000 people have signed up, and by October, 18,000 planning permissions should have been granted.

One way to save money on your plot is to find it yourself — walking around the area you want to live in is a good way to identify one. Look for odd-shaped plots on the edges of housing estates that a developer was unable to use, or push a note through a homeowner’s door if you notice unused land around their home.

We sold two homes to build a perfect house 

Sheila and Geoffrey McGaughey, from Surrey, bought a third of an acre from their neighbour which had a derelict house on the land.

Sheila, 76, and Geoffrey, 79, got a taste for property development after renovating their three-bedroom cottage and felt ready to take on a bigger project. 

Sheila and Geoffrey McGaughey, from Surrey, bought a third of an acre from their neighbour which had a derelict house on the land

Sheila and Geoffrey McGaughey, from Surrey, bought a third of an acre from their neighbour which had a derelict house on the land

The plan was to demolish the existing property on the land and build a new three-bedroom single storey home.

Sheila, who owned an interior design shop before she retired, worked with an architect on its design. 

The couple then chose specialist firm Border Oak to supply, deliver and build the frame of the house, add the roof and install doors and windows. A builder finished the work and Sheila took care of the interior design.

They started the project in September 2014. Not long after the derelict house was demolished, concerns mounted that the land was waterlogged.

‘Our digger sunk into a hole that had opened up in the ground,’ says Sheila.

The couple then chose specialist firm Border Oak to supply, deliver and build the frame of the house, add the roof and install doors and windows

 The couple then chose specialist firm Border Oak to supply, deliver and build the frame of the house, add the roof and install doors and windows

‘We were worried the plot might be too wet but we overcame the problem with concrete piles in the foundations.’ A year later they moved in. To pay for the project, the couple sold their holiday home in Spain and their cottage.

The land cost £491,000 and the building work, interior design and the landscaping a further £500,000.

Once completed, the property was valued between £1.2 million and £1.3 million. ‘We have always been adventurous,’ says Sheila.

‘It was huge fun, perfect being so close to where we lived. We would do it all again.’

WAYS TO DO IT — THE DECISION IS YOURS

The traditional route to building your own home is to employ an architect to design it, then builders are invited to bid for your business.

You can employ a master builder to lead and manage the project and hire tradesmen, or you can manage the build yourself and pick your own team. It usually costs between £1,300 and £1,500 per square metre (sq m).

First-time builders can buy a custom-build package from companies specialising in bespoke homes.

They build the house, complete with a kitchen and bathrooms. This costs around £2,000 per sq m. Or go for a basic package, where the company designs the house and builds a water-tight shell but you do the rest. Cost? About £1,100 per sq m.

Buying a home on a custom-build estate is another option. it can be easier as estates already have access to water, power and phone lines.

After buying a plot, you pick the size and design of the house, but it must comply with design guidelines for the estate.

It’s less likely to generate the big savings from previous methods, but you still get a home built for you that reflects how you want to live.

…BUT DON’T FORGET THE RISKS

Building a house is a large and expensive project that should not be undertaken lightly.

Andrew Baddeley-Chappell, chief executive of trade body National Custom Self Build Association, says the greatest uncertainty with self-building is what lies beneath the ground and work needed to lay the foundations. 

This stage of the build can throw up hidden costs and complexities. He also advises DIY builders to beware of cheap land.

He says: ‘If it looks too good to be true, it probably is. Remember when you are building that complexity adds costs and increases the risks of unexpected challenges. The more you can do yourself, the more money you save, but only if you are competent enough to do a good job.’

Whatever your involvement, be prepared for the number of decisions you will have to make and do not be rushed into making rash choices.

You should take out site insurance as soon as you own the land. It includes public liability insurance, to cover legal action and compensation claims if someone is injured on your land. 

It also covers if machinery or materials are stolen. A standard policy is about £700 for 18 months.

Picking a solicitor can be challenging because few are familiar with self-build homes. There is no single register of specialist solicitors so before instructing someone to act for you, ask what experience they have. And the solicitor must be on your mortgage lender’s panel.

s.partington@dailymail.co.uk

 

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