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Financial Services > Mortgages > Self Build > Build Your Own Home
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Self-build

Being a self-builder means designing and building your own home. Here's how to make your dream a reality.

How the process works

You may have an idea of what your ideal home would look like. But to turn that dream into a reality, you need a suitable plot of land and an architect.

He or she will provide you with an initial sketch and if you decide to go ahead, they will provide detailed plans. You then show these to builders, who will give an estimate of how much the construction work will cost, and how long it will take.

You will also need to get planning permission from the local authority.

Don't underestimate the cost: As well as fees to solicitors, you've got to pay an architect, builders, plumbers and many others.

You might also want to take insurance against long delays or overspending. Always have a contingency fund of around 10% of the total cost.

You'll also pay stamp duty on the land purchase if it costs more than £125,000, but not on the property.

Finding land

Building plots are hard to find. Good sites sell quickly, because developers are always on the look-out for opportunities.

Take into account your new home's dimensions, car parking space, space for a garden, the area you want to live in, children's schooling and any other local amenities that are important to you.

Planning permissions

Now you've found a plot of land, does it have planning permission and what do the different types of permission mean?

Outline Planning Permission (OPP) means agreement in principle from the local planning department that you can renovate or convert an existing building or construct a new house. 

Detailed Planning Permission (DPP) means that a house can be built in terms of plans that have already been submitted and agreed by the local planning department.

Plots are often sold with planning permission already in place for a particular size of building. You must ask for details of the planning permission, as there will always be conditions attached.

Be aware that sometimes sites will be advertised for sale when in fact they may be a field or part of a garden that the owner hopes will obtain planning permission at some future date.

Sometimes permission has lapsed. This means that permission was granted previously, it does not guarantee that permission will be renewed or that a new permission will be granted.

Legal issues which your solicitor will need to discuss with you, prior to exchange of contracts, will include planning and any restrictions, building conditions, rights of access, conditions of title and environmental issues.

Where to live during your self-build

Up to 75% of self-builders have to sell their current property in order to finance their new home.

For many, this means renting a flat or house or buying or hiring a mobile home to live in during the construction process.

Other costs you must budget for include the storage of your furniture - and remember to make sure your personal possessions are covered by insurance whilst they are in storage.

Self-build mortgages

With a self-build mortgage, the money is released in instalments as the development progresses - with an initial payment to cover the land purchase.

You're unlikely to get a loan for more than 75% of the land costs, or 60% of build costs.

Even at these rates, these tend to be higher-risk niche mortgages: As a result, you'll pay a higher interest rate if you manage to get a loan.

It will be particularly difficult to convince a lender to lend you money if you plan to do the building yourself.

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