Self-building can be an attractive way to get the home of your dreams, allowing you to create exactly what you need at a significantly lower cost compared to buying an existing property.
However, there are various issues to consider so you can make sure your self-build is able to go ahead according to plan while avoiding any unexpected issues that could end up costing you a lot of time and money, or even bringing your project to a complete halt.
Finding the right plot
The first step in any self-build is finding the right spot for your new home. Depending on where you are looking, this might mean finding a property you can demolish or significantly renovate, or you may be able to find a virgin site, allowing you to start from scratch. There are various resources, such as the Self Build Portal that can help you with finding a plot.
Something to consider is whether you want to find a plot that already has planning permission or one with no planning permission in place. A site with planning permission is likely to be significantly more expensive, but if you buy a site without planning permission you will have to wait longer and spend more to try to secure planning and there is no guarantee of success.
It is important that you seek advice as early as possible from appropriately qualified builders and possibly architects and planning consultants. They will be able to advise on the likelihood of success with a planning application. Planning Permission is likely to come with conditions and they will be able to advise on the costs of complying with these conditions as well as the costs of carrying out the build itself.
Getting appropriate advice early will also enable you to ensure that the building comes with an appropriate warranty that makes it suitable for mortgage lending. A builder may be able to arrange this or alternatively you may be able to get an architect to sign off the build and issue a Professional Consultant’s Certificate.
Just as when you buy a house, when you buy a site to self-build, you will want to make sure the right conveyancing checks are carried out. This ensures any potential problems that could affect the site, the value of your finished property and your ability to live there will be swiftly identified so they can be accounted for. If you are having a self build mortgage the conveyancer will also be able to ensure that you know what needs to be done to comply with the lender’s requirements at each stage that money is released.
Common conveyancing checks for development sites will typically include investigating the title of the property, identifying any issues such as rights of way or restrictions on the use of the site and finding out if any other development work is planned in the area in the near future.
Getting a mortgage or alternative funding
You won’t usually be able to get a standard mortgage to fund a self-build project (unless you have another property to secure it against), so you will need to give careful thought to how you will fund your self-build.
Some lenders do offer specific self-build mortgages, which will usually be released in stages as the build progresses and reaches certain milestones (such as being wind and water tight). The amount you can borrow will normally be capped at a percentage of the expected value of the finished property (often around 75%) and you will generally not be able to borrow more than the cost of buying the site and carrying out the construction. These mortgages typically release an amount for the initial land purchase and then you can drawdon further funds at particular stages of the build (subject to further valuations).
Alternative options include taking out a bridging loan, then when the property is complete, taking out a standard mortgage and using this to repay the bridging loan. However, it is worth bearing in mind that bridging loans often come with relatively high rates of interest, so this can be an expensive way to borrow, especially if the project runs into delays, meaning you have to wait longer to repay the loan.
Get reliable conveyancing for self-building
Bird & Co Solicitors is a Conveyancing Quality Scheme accredited law firm offering conveyancing services across England and Wales from our 3 offices in the East Midlands. We provide a reliable, efficient and cost-effective conveyancing service for all types of property, including buying sites for self-build projects.
With decades of experience across our residential property team, we can ensure all of the key details are considered and accounted for and that any potential problems are identified as early as possible, helping to limit any negative impact on your budget or schedule.
To find out more about our conveyancing services for buying self-build sites, call us today on 01476 372 044 or use our contact page to find details of your nearest office.