bpk101

Thanks Conor, this is all really helpful advice... i did think the broker might have got it wrong as i've heard this sequence being done before. In terms of where to turn next then for advice on what we may be able to borrow, should i speak with someone like Ecology directly and ask them to do some sort of mortgage affordability check to calculate what we might be eligible for based on our current financial status? Or do i need to handle this through a broker? Does anyone have experience with Buildstore? Are they a lender or a broker? Or just a general self-build advice platform?

Interestingly a mortgage advisor has just got back to me saying it's not possible... their response below: (Incidentally, in case it has any bearing the mortgage i'd need to buy the house/plot would be a second mortgage) "Unfortunately it wouldn’t be able to be done as a second mortgage at all because of what the property will be used for (demolish and rebuild), even though you plan to re-pay the mortgage back before you demolish it, its not seen as a second residential. For any self build mortgages, planning permission has to be obtained. So this would either involve you purchasing the house outright with no mortgage, applying for planning permission and once this is granted then development finance can be looked at, or you can purchase a house with planning permission already granted but these tend to be a lot more expensive." Any thoughts?

So how much can you be looking at for connection of utilities to an empty plot? I've heard stories (and seen posts on here) where people have been quoted north of £100k just for water, let alone gas, electricity, telephone and broadband etc! Obviously i don't want to be buying an empty plot and facing these sort of costs later down the line when we come to build.

Plots with planning consent?

As the title suggests, which option is best and what are the pro's and con's of searching for and buying an empty plot of land (with planning consent) versus buying a run-down but habitable house to demolish and rebuild? Every article i come across when searching for advice on how to find the perfect plot only ever focuses on empty plots of land. Whilst every architect i've chatted to have strongly advised on buying a house and demolishing it due to utilities already being in place, amongst other reasons. Thoughts?

Thanks... i've started reaching out to a few brokers i've used in the past and will see what advice they come back with.

Thanks, so the correct sequence would be: 1: Apply for 'residential' mortgage to buy the house 2: Gain planning permission for demolish and rebuild 3: Apply for 'self-build' mortgage to pay off the residential mortgage and fund the build ? Would i need to inform the residential mortgage lender of my plans (to gain planning and switch to a 'self-build' mortgage) at point of application? Or is this not necessary given the house wouldn't be demolished until we switched to a self-build mortgage with another lender?

Hi – My OH and I are looking to pursue a self-build project and i'm at a stage where i need a bit of advice on mortgage options to fund it. We've been advised by various architects that buying a run-down (but habitable) house to demolish is the best way to acquire land for your build in terms of saving cost to install utilities and ease of planning approval. If i was to pursue this option... would i require a normal mortgage from a typical high st. lender, or a different kind of mortgage from a specialist self-build lender (Ecology etc.)? And in relation to Build Stores 'Project Types', would buying a house to demolish be classed as 'Self Build', 'Property Renovation' or 'Property Conversion'... or none of these? Thanks

Yes completely agree, we're more than happy to think economically with regards to fixtures and fittings. We don't necessarily desire a bank busting Gaggenau kitchen for example, we achieved a really high finish in our current home on a budget by spending time to research some choice products. For example our current kitchen is Ikea carcasses but doors and work surfaces made by a danish company called ReformCPH who specialise in fronts designed by architects and built for Ikea cabinets, 3 years later and it still looks and works great! We'd be happy to do this again and if we do win the lottery 10 years down the line, well! Thanks! Definitely exciting, if not slightly nerve-wrecking ?

Do these figures seem right and have i done the self-build estimate correctly? Is 20% the right amount to factor in for all fees? Is deducting 20% at the outset the right way to account for contingency and is it enough?

As this is our once in a lifetime 'forever home' (at least that's the plan) we do want to create something of a relatively high standard. I'm a designer by trade (sadly not in a field related to architecture or construction), and the aesthetic of the house is extremely important to us. We'd like to work with a very good architect who can deliver in the style we want and that could impact on our cost. Not that i'm considering using this company but i love their work but they clearly state on their website that projects they take on typically have a cost per sqm starting at £3500(!) https://www.stromarchitects.com/architecture-one-off-contemporary-houses/ At the moment i think main contractor is the route for us with the architect doing a series of site visits to ensure the plans are being followed correctly, then i'll be overseeing the project management side of things (timings, researching and purchasing of not construction fixtures and fittings etc). Is this a cost effective route?

Yes we're slowing putting this together. Is this in reference to the house we currently own (and have equity in) being in London? We won't be selling for 3-4 years yet so can't really foresee what the market will be like then. If you're suggesting the self-build will be in London, it won't. We're looking to build outside of London but ideally somewhere in the South East (land budget allowing).

Hi — I'm trying to arrive at some rudimentary budgeting figures for a potential self-build project my OH and I are hoping to embark on so we can see what's possible in terms of size and spec. I've followed a few basic financing and budgeting formulas that have been suggested to me but i'm not sure whether my calculations are correct and whether i'm accounting for everything that needs to be considered. What i'd like to arrive at is... 1. A rough idea of our potential construction budget 2. An approximate house size in sqm based on this budget Below are the figures i'm currently arriving at. Any advice on whether i'm doing this correctly or what the correct figures should be would be fantastic. ——————————— Joint household income: £295k Multiplied by 3 to arrive at a potential maximum mortgage: £885k Plus current savings: £50k Plus equity in current house: £300k Equals a total budget of: £1.235m Based on land being 1/3rd of this figure and the build being 2/3rds: Land budget: £411k Self-build budget: £822k From the self-build budget i've deducted 20% / £164k for all the fees (architect, structural engineer, M&E, QS, building control, planning fee, party wall fee) I've then deducted 20% / £164k for contingency This leaves a final construction budget of: £644k And a potential house size of: Low spec (£2000 per sqm) = 322 sqm Mid spec (£2500 per sqm) = 257 sqm High spec (£3000 per sqm) = 214 sqm ———————————

Saving anywhere near 400k in time to 'move quickly' would be near impossible. Even over 3 years it would mean saving somewhere in the region of 10k a month! Not likely with a London mortgage and nursery fees. What do you mean by 'refinance the existing house' and what would that process look like in terms of raising capital to buy land? Whilst our income is good and we've added value to our current home, large sums of cash (apart from 50k savings) is not readily available. Thanks

My first step was to establish whether a self-build was even a viable option (it looks like it is - for now). My next step is to work out a savings strategy with my OH, she agrees paying cash for land is the better option so let's see what plan we can hash out.

That's sound advice, although it would likely take us 4—5 years to save the required cash before we even start looking for land to buy with it. In terms of age, i'm 45 and my OH is 38... in case that has any huge bearing on the mortgage sums i'm doing?

I'm just putting some slightly more accurate figures through this formula you kindly offered... Our joint income is actually £295k when i add in average annual bonuses over the last few years. I believe these are included as part of your salary when applying for a mortgage? If i remember correctly they were when we applied for our first mortgage. We have equity of £60k and savings of £50k. So i'm arriving at a maximum mortgage of £885k (3 x joint income) plus equity is £945k Divided by 3 gives us a land budget of £315k (if we add cash savings to the land budget we get to £365k) That leaves £580k divide by £2000 (i'm being slightly more generous with the cost per sqm here) giving us a potential house size of 290 sqm Is this correct? Another way of calculating it might be this although i get a different outcome... £885k (3 x joint income) plus equity and savings = £995k Divided by 3 gives us a land budget of £331k Leaving £664k divided by £2000 = 332 sqm Also, will the approx. £50k fees come on top of this or are they included in the build cost formula? Thanks.

Project managing the build, organising trades and materials is definitely something i can do, I oversaw all of this during the renovation of our current house. We renovated our house in stages over 3 years using different build teams for each stage (due to availability). We added a side-return kitchen extension, loft conversion, main bathroom remodel amongst many other things and are thoroughly happy with the outcome. I also thrived when it came to researching materials, fixtures and fittings often finding products at a considerably lower cost than the builders were quoting (for the very same product). Example – builders supplier quoted £2k for a particular kitchen UFH system, i found the exact same system for less than £600 which they were more than happy to install. I researched and purchased everything, from the big ticket items like glazing, under floor heating systems and flooring right down to the toilet cisterns and lighting fixtures. Do self-builders often hire a project manager then and what sort of cost can be saved if i did this myself?

I've seen this mentioned a few times i.e. 'how much am i looking to get involved'. What does this typically mean as i presume it just means being hands on with building work? Well for a kick-off i have zero practical building / construction skills (although i'm definitely not afraid to get my hands dirty). But before i run off and start signing myself up for bricklaying and plastering courses (no doubt to the detriment to the quality of the finished build!), how much of a cost saving does 'getting involved' really and honestly make? Especially given it would mean a loss of regular income if i were to pause on my day job for the duration of the project to do so? Or does 'getting involved' and saving money from doing so extend beyond just manual labour / building work?

Some more excellent advice, again thanks! Just to answer some of the questions in it and share about bit more info... We currently live in Walthamstow, North East London. We bought a small 2-bed, 1 bath Victorian terrace in 2015 for £415k. We extensively renovated it adding a side-return kitchen extension and a loft conversion, the house now has 4 bedrooms, 2 bathrooms and was valued at between £650k—£700k pre-Covid (god knows what it's worth now!). We've not paid a huge amount off of the mortgage in 5 years but have obviously added value. We have a collective household income of around £250k although i freelance so mortgage lenders might look unfavourably on that? We don't have a huge amount of savings currently, maybe £40-50k max. but we're willing to put a 5 year savings strategy in place when we know what we need. We'd love to build somewhere within 50-60 miles of London but appreciate this could hugely increase the land value so are willing to look farther afield but both our jobs are fairly London-centric so we'd need to visit for work every now and then. My OH wants 6+ bedrooms, i just want a comfortable family home in the architecture style we like.

Thanks for the great advice. I suppose what i feel i'm facing is a bit of a chicken and egg scenario... How do i know what size plot to look for until i know the size of house i'm going to build on it? How do i know what size house i'm going to build on it until i know what budget we'll have in 5 or so years to invest in the project? How do i know what budget we'll have (and what we might need to save in the meantime) until we talk to lenders? Plot first and build a house that fits? Or desired house size first and find a plot that's suitable? Also, before we embark down the self-build road I want to be absolutely certain we can afford it (plot, fees, build... the lot) before falling in love with an idea that's not achievable, or will create a huge financial burden later in life. Our other option is to buy and renovate an existing house already in the style of the home we dream of living in (we're big fans of modern architecture, from mid 20th century to contemporary style). Websites like The Modern House and WowHaus specialise in these properties but i'm hoping a self-build will allow us to design the house exactly to our specification and, from what i hear, work out somewhat cheaper than buying an existing house(?). Any more advice on this would be great. [Edit] Between writing this reply and posting it i've seen a few more responses (thanks!) so apologies if my questions above touch on topics your new advice i'm about to read offers.

Hi — My OH and I have recently discussed the idea of building our own home in the next 5 or so years. With currently little to no experience of the self-build process (we did however extensively renovate our current first home) i'm keen to start researching now, appreciating how long a project like this could take. It feels like the first thing i need to establish (and correct me if i'm wrong) is how we might finance a self-build and what our projected budget might be in 5 years time. So... is projected budget the best place to start the journey? If so, how do we approach it? Do we start contacting self-build mortgage providers or brokers now to discuss what level of financing might be available to us or is it too early? Without knowing our potential projected budget there's no way of us knowing where we could possibly build (plots no doubt vary in price according to region), what size and type of house we could build and indeed if we can consider a self-build at all! Therefore it feels like the natural place to start. Any advice on the first and best foot forward would be greatly appreciated.