Buying a home vs Building a home

Buying a home vs Building a home

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Snollygoster

Original Poster:

1,538 posts

138 months

Tuesday 21st October 2014
quotequote all
I'm hoping there's either some builders out here, or people who have done the same who can offer some advice.

I'm in the position to be buying my first home, and this idea has sprung to mind following a friend recently renovating a property and making a decent profit on it.

For me, making a profit is not really key as I a want a home first and foremost rather than a money making opportunity. Obviously both would be fantastic, but not important so to speak.

With house prices going up and up again, at least in the Hampshire area, it seems £250k won't get you too much, or at least not a property to the same level I'm used to renting. I have been approved for a £250k mortgage, but after doing some digging, apparently there are mortgages you can get if building a home instead of your traditional mortgage.

So anyway, I was thinking, for £250k, surely it must be more cost effective to buy a small plot of land, get planning permission, and build a house. Now I appreciate that is making it sound super easy when I'm expecting this to be a 1-2 year project. I need to stress I will probably not get involved with any of the building/decorating side, and will have to pay tradesmen for the work. But could you get a house built for £250k? Is it as simple as that, and most importantly where do I start?

mondeoman

11,430 posts

265 months

Tuesday 21st October 2014
quotequote all
You buy a house and make a home.

TA14

12,722 posts

257 months

Tuesday 21st October 2014
quotequote all
Snollygoster said:
where do I start?
find the land; this may be very difficult.

bennyboydurham

1,617 posts

173 months

Tuesday 21st October 2014
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Too many variables to answer easily. We first approached the council in mid-2009 about self building on our plot and they laughed us out of the office. Five years later we are just putting the roof on our house, on that plot.

The planning process alone took three years.

Hardest bit is the land. A plot with PP isn't going to be cheap. A plot without has no guarantee of success. 250k would get you a decent self build house, but the land will cost perhaps half as much on top of that.

Investigate plots in your area and see if the numbers stack up.

Magog

2,652 posts

188 months

Tuesday 21st October 2014
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bennyboydurham said:
Too many variables to answer easily. We first approached the council in mid-2009 about self building on our plot and they laughed us out of the office. Five years later we are just putting the roof on our house, on that plot.

The planning process alone took three years.

Hardest bit is the land. A plot with PP isn't going to be cheap. A plot without has no guarantee of success. 250k would get you a decent self build house, but the land will cost perhaps half as much on top of that.

Investigate plots in your area and see if the numbers stack up.
Have you got a build thread?

98elise

26,376 posts

160 months

Tuesday 21st October 2014
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[quote=Snollygoster]
...... buy a small plot of land, get planning permission..... quote]

I've spotted a massive hole on your plan.


Renovation

1,763 posts

120 months

Wednesday 22nd October 2014
quotequote all
I built a 2000 ft2 4 bed, 3 bath, home for £125k 18 months ago.

But I was involved everyday for a year - add at least £50k for that.

The land cost me nothing as I built on my garden and I obtained the Planning but that took 6 years and two Appeals.

I was offered £200k for the land with Planning Permission.

The house was valued at £550k so there can be good profit

but a loss would be easy in the current climate especially if you are paying a main contractor as demand and prices have soared.





Spudler

3,985 posts

195 months

Wednesday 22nd October 2014
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Snollygoster said:
So anyway, Hampshire, £250k, surely it must be more cost effective to buy a small plot of land, get planning permission, and build a house. I need to stress I will probably not get involved with any of the building/decorating side, and will have to pay tradesmen for the work. But could you get a house built for £250k?
Lower your standards/expectations and buy a house for your budget, the above just ain't gonna happen.

tleefox

1,110 posts

147 months

Wednesday 22nd October 2014
quotequote all
As above, it sounds easy but isn't.

1) planning permission - minefield unless you buy a plot with PP in which case the cost of the land soars.
2) funding - any money through a mortgage for self building is released in stages e.g. 25% on achieving PP, 25% when ground works complete etc, so there is a risk the bank can pull the plug at any of these stages.
3) any capital you have will get eaten up very quickly so what will your living arrangements be while the house is being built? Can you afford to fund the building and rent at the same time? This is why most people end up living in a caravan on site.

Go in with your eyes open.

Snollygoster

Original Poster:

1,538 posts

138 months

Wednesday 22nd October 2014
quotequote all
So the biggest constraint seems to be land. If understood correctly, we're saying to get a land with planning permission on is extremely expensive, and to get a piece of land without and applying is timely with no certainty of success?

As time isn't a huge factor, as I'd prefer to wait and get everything right, In regards to the latter point above, is the outcome of success possible so long as you tick all the right boxes for the council. Obviously I won't just go and buy a field and then ask; I'd need to find some sort of consolation with someone who's day job it is to assist and advise.

Andehh

7,107 posts

205 months

Wednesday 22nd October 2014
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Auntie & Uncle spent 10 years going through this process, though mainly due to needing a plot of land with enough room for stables/paddock. 7 years of that was just sourcing suitable land.

Land & PP is the huge first hurdle, and can take years of trying.

Bluebarge

4,519 posts

177 months

Wednesday 22nd October 2014
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Snollygoster said:
So the biggest constraint seems to be land. If understood correctly, we're saying to get a land with planning permission on is extremely expensive, and to get a piece of land without and applying is timely with no certainty of success?

As time isn't a huge factor, as I'd prefer to wait and get everything right, In regards to the latter point above, is the outcome of success possible so long as you tick all the right boxes for the council. Obviously I won't just go and buy a field and then ask; I'd need to find some sort of consolation with someone who's day job it is to assist and advise.
You will find this very difficult in your part of the world.

Most decent plots are snapped up by developers before they even make it to market - they get tip-offs from estate agents who trouser a commission. The only plots that come up for sale tend to be awkward and unprofitable to build on, or ones without (and no hope of getting) PP.

Your best bet is to scour the ads for a bungalow or other slightly knackered house that is a do-er up-er and can either be knocked down so you can start again, or refurb'ed and extended. However, you will still be competing with local builders/developers for these sites, particularly if more units can be squeezed into the plot, so you need to be quick.

Tuna

19,930 posts

283 months

Wednesday 22nd October 2014
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Start here: http://www.amazon.co.uk/Housebuilders-Bible-10-Mar...

(House Builders Bible).

We bought a plot and built a house. It is, to be honest, lovely - and more of a home than we could have otherwise have afforded.

Be clear though - you pay in time and effort for what you save in cash. If you want a standard home built by nice friendly builders on an easy plot, you'll not save that much (if at all). It's easy to get upgrade-itis as well (oh, these doors are a bit nicer, and they're only a fiver each more...) and your budget will be exceeded.

1. Plots are expensive, especially if they're easy (the right size, in an existing group of houses, with services connected, good ground conditions and planning permission). Knock off any of those to get them cheaper - but then you have to deal with the consequences, which can range from an extra 30K on your foundations to refusal of planning permission.

2. Planning permission varies hugely by area, and can take years even after verbal agreements (which are worth the paper they're written on). Talk with everyone, face to face (including neighbours - difficult ones will be difficult whatever you do, friendly ones will get suspicious if they think you're doing something behind their backs). Then follow everything up with emails immediately. Don't let any discussion go off the boil or you'll be picking up the pieces.

3. The real savings come from obsessively managing materials and builders. Search out discount bathroom suits, kitchens, doors, lights etc. and you can build down to a tight budget. If you're no good at tracking costs, planning out what needs to be done, pricing things and purchasing them, you'll not make any savings. Do stuff yourself if you possibly can - from keeping the site tidy, through to dogsbody jobs and simple fit and fix work. Make sure you pay builders only for what they do - don't have them hanging around whilst you sort stuff out.

4. Consider a renovation - if you can get PP, you could add room-in-roof and decent spec insulation to a knackered old bungalow and get a top notch house in the process. It solves a lot of the uncertainty over services, ground conditions and so on.

5. You get what you pay for - so choose your fights. Sometimes simple touches can make an impact, and it's worth making sure you give a good first impression (always consider the resale value of the choices you make). Insulation should be a no-brainer and a decent heating system can massively reduce bills and improve the feel of a home. On the other hand a cheap combi boiler is pretty much all anyone expects from a starter home.

6. In terms of value, the final finish will dictate a lot. If you're managing things yourself, knocking off that snag list and putting in the time for decent painting and decoration will pay dividends. It also takes a lot of time and effort just at the stage when you're sick of all the work.

koosh

54 posts

113 months

Wednesday 22nd October 2014
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if i have learned one thing from watching grand designs over the years its that you will innevitably spend more than you think you will building a home. but at the end of the day it will "probably" be worth more than you spend building it.
the cost of land seems to be the biggie for people these days. its hard to come by in an unspoiled area and expensive regardless of where it is.

just think of the house you are in just now or the houses you have stayed in in the past and think how many times you probably said to yourself "i wish that wall was over there" or "i wish this room was actually switched with that room" or things to that nature.... building your own home could get rid of all this, and you only have yourserlf to blame if you get it wrong...

one day i will buy a plot or an older home and flatten it and build my own, but those days are far off!

but i would say to anyone if they can afford the money and time involved in such a project then by all means go for it!

BoRED S2upid

19,643 posts

239 months

Wednesday 22nd October 2014
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If you can get a plot for less than £100k then yes it's very doable.

If you find a plot with planning permission for less than £100k you will be very lucky!

worsy

5,776 posts

174 months

Wednesday 22nd October 2014
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Build thread wiki at the top of the forum.

RammyMP

6,729 posts

152 months

Wednesday 22nd October 2014
quotequote all
Renovation said:
I built a 2000 ft2 4 bed, 3 bath, home for £125k 18 months ago.

But I was involved everyday for a year - add at least £50k for that.

The land cost me nothing as I built on my garden and I obtained the Planning but that took 6 years and two Appeals.

I was offered £200k for the land with Planning Permission.

The house was valued at £550k so there can be good profit

but a loss would be easy in the current climate especially if you are paying a main contractor as demand and prices have soared.
I did something very similar 5 years ago, similar size, cost and valuation

anonymous-user

53 months

Wednesday 22nd October 2014
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Obviously land availability is location dependent

I sold my house and it took me over 4 years to find a plot. It then took about 6 months to work with architects on a design, get planning permission and then sort out build regs.

I moved in 6 months ago and started looking for my plot sometime in 2008!!

As has been said, find a plot first smile

Pit Pony

8,266 posts

120 months

Wednesday 22nd October 2014
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BoRED S2upid said:
If you can get a plot for less than £100k then yes it's very doable.

If you find a plot with planning permission for less than £100k you will be very lucky! or in North Wales
EFA

My parents (along with a few of the other residents of a nice village on Anglesea), have a large plot which they want £80K with planning permission. Not a snip of interest, despite views of Snowdon, and the fact that there's a bus service every third Wednesday. They are a mile from Red Wharf Bay, 5 miles from Beau Maris, 8 miles from Bangor. 3 and a bit hours by train from London. Did I say you have a view of Snowdonia?





Renovation

1,763 posts

120 months

Wednesday 22nd October 2014
quotequote all
Pit Pony said:
My parents (along with a few of the other residents of a nice village on Anglesea), have a large plot which they want £80K with planning permission. Not a snip of interest, despite views of Snowdon, and the fact that there's a bus service every third Wednesday. They are a mile from Red Wharf Bay, 5 miles from Beau Maris, 8 miles from Bangor. 3 and a bit hours by train from London. Did I say you have a view of Snowdonia?
I was shocked when randomly looking on Rightmove that you can buy a decent 3 bed detached house with grounds and a view for £80k in Wales - which means the land value (of a similar plot) must be close to zero.