Building a new home? The do’s and don’ts.
This has become an increasingly popular way of achieving your dream home; gone are the days of stripping wallpaper and painting walls, people are just building new ones! And why not? Building a new home is, in a lot of cases, better for the environment, cheaper and will save you more money in the long run.
To start with, you will need to find some land to build your new home on; and to do this you may need to contact people like estate agents, auction companies and so on. Don’t buy a plot before you have seen it as you never know what restrictions may be in place for it. Do check at the local planning office to ensure that the plot you are interested in has a valid ‘outline planning permission’.
This is planning permission in its basic level but does indicate whether it will be easy to get planning permission for the property you wish to build. Always submit your detailed plans before you start to build to avoid any legalities; the planning department will need to have received these plans within three years of this ‘outline planning permission’ being granted.
Is the land OK?
Do check the land before you decide to buy to make sure it is OK to build on. For example, you will need to check for any tunnels, wells and so on underneath the surface as these could add to your overall building costs quite significantly.
Budget for your new build.
Don’t steam into your building project without budgeting beforehand; you will need to take into account numerous expenses, including professional fees, land costs, materials, building labour, insurances and other specialist services. You should always speak to a mortgage advisor before going ahead with the build (unless you have enough money without a mortgage) as you will need to have enough money to cover the repayments whilst building as well as outlaying more money for the build.
Mortgages for building your new home.
Do think about getting a self-build mortgage; these are specifically designed for those building homes and come in the forms of ‘advanced payment’ and ‘arrears-based’.
With an advanced payment self-build mortgage, you should be able to manage without bridging loans that would normally cover any costs that you may meet in-between mortgage payments. Instead, you will receive money at the start of each stage of the build.
An arrears-based self-build mortgage is one that will see your payments received after the various stages of construction. Both types of mortgages will generally cover the land costs and will be allocated once you have ‘outline planning permission’ and you will receive payments for the five key stages of your build.
Buying a dilapidated house.
Do think about buying a derelict house with the intention of then reconstructing the house that used to stand there. While this may seem an expensive alternative to start with, you may be able to save money in the long run through things like drains; water, gas and electricity supplies and highways.
Always thoroughly plan for a new-build, assessing all aspects involved from the finances to the commitments; you will need to establish just how much of a hands on approach you wish to make, as they more you can do yourself the more money you will save. Research well, and do speak to others who have built their own homes and you may be able to learn from their mistakes.
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