as mentioned before i have a limited build budget of 220ish k and am now thinking of making the house smaller than origionally planned, 170m2 now, im interested to know how far completed i need to have the house to get it "signed off" as built and allowed to covert build mortgage to the standard type mortgage? im just thinking incase i run out of money i could always leave doors/upstairs bathroom/skirting board/paint/flooring on a couple of bedrooms until a later date, i dont really want to go any smaller on the build, ideas welcome, thanks!

Finishings like skirtings can be left off, but I can't see big savings by leaving that level of detail off.  But if the plans show 2 bathrooms that is what they will expect for completion.

 

Not much landscaping will be needed, just enough to make safe compliant entrances to the building.

 

A house near here got signed off as complete with one wall only scratch coated, and 2 years later he still hasn't done the top coat of render yet.

 

The biggest savings to be had on a tight budget are bt doing more of the work yourself.

I don’t think you need BC sign off to remortgage. But you do need the property to be habitable for mortgage purposes (I.e kitchen, bathroom all working). What is “completion” vs “BC sign off” because we also will need to remortgage off self-build mortgage too, probably long before BC sign off? And who signs off “completion”?

Bear in mind you won't be able to claim VAT back after completion. So may not be wisest choice if you still have a lot of work left... Unless it will be largely DIY. We will be in similar position as well and unsure of our strategy.

6 minutes ago, Conor said:

Bear in mind you won't be able to claim VAT back after completion. So may not be wisest choice if you still have a lot of work left... Unless it will be largely DIY. We will be in similar position as well and unsure of our strategy.

That depends how inventive you are.  I am planning my VAT claim later this year which will still leave the sun room to do. But the big item for that is the windows and doors. If I get those supply and fit, I should still be able to get those at 0% VAT as it will still be a new build in progress not yet signed off by building control.

I’ll need to do the maths on mortgage savings vs VAT reclaim ?

 

Agree with @ProDave about zero vat supply and fit. Hoping to do that for the driveway next year once we are in the house and the caravan gone.

You can have lots not finished. It's simple things like having some where to wash, prepare food etc. This can mean you only need 1 bathroom and your utility room. You will obviously need all the plumbing and electrical certs and the technical things ticked of. Things like your staircase has to be completed and have level access . 

Contact your building control guy and he will give you a list of everything that needs done. They don't care how your house looks only that you have ticked off the list.

55 minutes ago, Declan52 said:

You can have lots not finished. It's simple things like having some where to wash, prepare food etc. This can mean you only need 1 bathroom and your utility room. You will obviously need all the plumbing and electrical certs and the technical things ticked of. Things like your staircase has to be completed and have level access . 

Contact your building control guy and he will give you a list of everything that needs done. They don't care how your house looks only that you have ticked off the list.

so if downstairs bathroom is working i can leave upstairs? that could save 5k? doors another 5k? or will i need them for fire safety reasons? landscaping outside and driveway could be another 5k? carpets another 2k mabye?

2 hours ago, ProDave said:

Finishings like skirtings can be left off, but I can't see big savings by leaving that level of detail off.  But if the plans show 2 bathrooms that is what they will expect for completion.

 

Not much landscaping will be needed, just enough to make safe compliant entrances to the building.

 

A house near here got signed off as complete with one wall only scratch coated, and 2 years later he still hasn't done the top coat of render yet.

 

The biggest savings to be had on a tight budget are bt doing more of the work yourself.

what sort of jobs can you do yourself unless qualified other than painting?

2 hours ago, ProDave said:

That depends how inventive you are.  I am planning my VAT claim later this year which will still leave the sun room to do. But the big item for that is the windows and doors. If I get those supply and fit, I should still be able to get those at 0% VAT as it will still be a new build in progress not yet signed off by building control.

at what point can you start claiming VAT back? as soon as BC sign it off? am i right in saying if you get a builder to buy everything for you then theres no vat paid and therefore better for cashflow

4 minutes ago, Amateur bob said:

what sort of jobs can you do yourself unless qualified other than painting?

I tiled my roof, fitted the insulation, fitted the external wood fibre insulation board, did all the plumbing, fitted all the plasterboard, fitted the door frames, fitted the chipboard flooring upstairs and wooden floor downstairs, fitted the kitchen, did all the painting.  Oh and I did the wiring (that is my trade)

 

I got a plasterer to plaster the walls and render the outside and I got a joiner to hang the doors because he made a better job if the hinges etc than I would have.

6 minutes ago, Amateur bob said:

at what point can you start claiming VAT back? as soon as BC sign it off? am i right in saying if you get a builder to buy everything for you then theres no vat paid and therefore better for cashflow

You need some form of evidence of completion.  I plan later in the year to get a "certificate of temporary habitation" from building control and use that as evidence of completion for the VAT claim.

 

You only get one go at a VAT reclaim so there is no case of "start to claim it"  You claim it just once.

 

Anything that a builder or other tradesman does as "supply and fit" should be zero rated. You can only reclaim the VAT on things that you personally buy to incorporate into the build.

4 minutes ago, ProDave said:

I tiled my roof, fitted the insulation, fitted the external wood fibre insulation board, did all the plumbing, fitted all the plasterboard, fitted the door frames, fitted the chipboard flooring upstairs and wooden floor downstairs, fitted the kitchen, did all the painting.  Oh and I did the wiring (that is my trade)

 

I got a plasterer to plaster the walls and render the outside and I got a joiner to hang the doors because he made a better job if the hinges etc than I would have.

is the tiling quite straight forward? how much do you reckon you saved doing all that yourself?

4 minutes ago, ProDave said:

You need some form of evidence of completion.  I plan later in the year to get a "certificate of temporary habitation" from building control and use that as evidence of completion for the VAT claim.

 

You only get one go at a VAT reclaim so there is no case of "start to claim it"  You claim it just once.

the vat will be for all the materials basically?

11 minutes ago, Amateur bob said:

so if downstairs bathroom is working i can leave upstairs? that could save 5k? doors another 5k? or will i need them for fire safety reasons? landscaping outside and driveway could be another 5k? carpets another 2k mabye?

Your building control guy will give you the list of what he will except. He won't care about carpets or landscaping unless it's something like a retaining wall that you need to have done for the road in. Driveway the same unless it's stated in your planning. 

You will need doors on your bathroom but the rest i doubt it would matter like it would of you had to have fire doors in a 3 storey house.

Unless you need an actual certificate like you do with electrics and maybe plumbing depending on your choice you can do everything else. But be honest unless you know what your at don't be doing important jobs like the roof. 

I done mine all except the electrics, plumbing, plastering and some joinery work. Maybe saved close to £50k but it took 2 full years of my time and Def took its toll physically and mentally. Would be down money if you counted my time for those 2 years.

9 hours ago, Amateur bob said:

as mentioned before i have a limited build budget of 220ish k and am now thinking of making the house smaller than origionally planned, 170m2 now, im interested to know how far completed i need to have the house to get it "signed off" as built and allowed to covert build mortgage to the standard type mortgage? im just thinking incase i run out of money i could always leave doors/upstairs bathroom/skirting board/paint/flooring on a couple of bedrooms until a later date, i dont really want to go any smaller on the build, ideas welcome, thanks!

 

Budget seems quite tight. If you going with a self build mortgage these typically lend less than you would hope for. Your mortgage provider will expect your build cost/projections to fund the VAT gap and a healthy contingency. So although your cost might be £220,000 when you have reclaimed VAT and if you were very good in not spending the contingency. You might have to prove to the bank that you can borrow an additional £50,000 at the start of the build.

 

The other point although your footprint might be smaller is the design less complicated. I.e. if you imagine a corner in your build, then imagine all the extra work that is involved in that compared to a straight line. From digging a trench right the way to skirting and plastering. 

 

You may also consider whether going smaller is a better option. Sounds strange, but typically the best value are achieved on larger builds. If your going with a fabric first approach can you not just go with a bigger house and then cut back on the expensive items in the house (kitchens, fixtures & fittings).

9 hours ago, Thedreamer said:

 

Budget seems quite tight. If you going with a self build mortgage these typically lend less than you would hope for. Your mortgage provider will expect your build cost/projections to fund the VAT gap and a healthy contingency. So although your cost might be £220,000 when you have reclaimed VAT and if you were very good in not spending the contingency. You might have to prove to the bank that you can borrow an additional £50,000 at the start of the build.

 

The other point although your footprint might be smaller is the design less complicated. I.e. if you imagine a corner in your build, then imagine all the extra work that is involved in that compared to a straight line. From digging a trench right the way to skirting and plastering. 

 

You may also consider whether going smaller is a better option. Sounds strange, but typically the best value are achieved on larger builds. If your going with a fabric first approach can you not just go with a bigger house and then cut back on the expensive items in the house (kitchens, fixtures & fittings).

yes the vat issue is a concern am i not right in saying though that if i get a builder to do the house then they were source the materials with no vat on them an therefore i wont have as much to claim back at the end? i think im going to go for a straight forward rectangular shape design what happens though if i put in planning for a 170m2 house and the mortgage company only agrees to lend me say 200k? do i go back to an architect and draw upplans for a 150m2 house or just push on and get it to wind/watertight stage and then work away on it myself?

Yes, you can only reclaim vat on materials you purchase direct yourself (eg your name and address on the receipt).

 

Your builder (or other trade) should not charge you any vat as new houses are zero rated. If they did you wouldn't be able to reclaim it as you paid it in error.

 

If the builder is vat registered they can reclaim any vat they pay on materials.

4 hours ago, Amateur bob said:

yes the vat issue is a concern am i not right in saying though that if i get a builder to do the house then they were source the materials with no vat on them an therefore i wont have as much to claim back at the end? i think im going to go for a straight forward rectangular shape design what happens though if i put in planning for a 170m2 house and the mortgage company only agrees to lend me say 200k? do i go back to an architect and draw upplans for a 150m2 house or just push on and get it to wind/watertight stage and then work away on it myself?

 

I decided to simplify my build to save money and ended up with more space by keeping the shape simple. (I keep a blog which might of some interest)

 

I was able to achieve mine on a non material planning variation for free even though full planning was previous granted. If you revise your plans then this will cost you extra in design fees. To be honest if looking at a cost effective approach I would do away with the architect and use in house timber frame kit designer or do what we did and use a structural engineer and house designer for a bespoke project.

 

Not sure where you are with arranging finance but I would be looking to get in touch with some building societies to find out firstly what you can borrow. I wouldn't use a standard residential mortgage calculator as a self build mortgage is more risky so typically the amounts borrowed is less. 

 

Where are you planning to build?

 

Yes  what @Temp said on VAT.

 

But also worth bearing in mind that typically it's going to be more expensive if your contractor is buying materials. The overall cost is important in order to get the project alive, but equally as important is cash. Purely from a financial point of view you have trade off between cost and cashflow for VAT.

 

As an example:

 

Window fitted on supply and fit zero rated, no VAT payable/none reclaimable. On average I would expect this to incorporate a margin for the combination of both supply and fit. - more cost, better for cashflow, less control

 

You buy the windows (standard rated) but you claim the VAT say 18 months later and arrange a fitter who will zero rate the work. - less cost, worst for cashflow, more control

 

 

 

6 minutes ago, Thedreamer said:

 

I decided to simplify my build to save money and ended up with more space by keeping the shape simple. (I keep a blog which might of some interest)

 

I was able to achieve mine on a non material planning variation for free even though full planning was previous granted. If you revise your plans then this will cost you extra in design fees. To be honest if looking at a cost effective approach I would do away with the architect and use in house timber frame kit designer or do what we did and use a structural engineer and house designer for a bespoke project.

 

Not sure where you are with arranging finance but I would be looking to get in touch with some building societies to find out firstly what you can borrow. I wouldn't use a standard residential mortgage calculator as a self build mortgage is more risky so typically the amounts borrowed is less. 

 

Where are you planning to build?

 

Yes  what @Temp said on VAT.

 

But also worth bearing in mind that typically it's going to be more expensive if your contractor is buying materials. The overall cost is important in order to get the project alive, but equally as important is cash. Purely from a financial point of view you have trade off between cost and cashflow for VAT.

 

As an example:

 

Window fitted on supply and fit zero rated, no VAT payable/none reclaimable. On average I would expect this to incorporate a margin for the combination of both supply and fit. - more cost, better for cashflow, less control

 

You buy the windows (standard rated) but you claim the VAT say 18 months later and arrange a fitter who will zero rate the work. - less cost, worst for cashflow, more control

 

 

 

ive spoken to buildstore and they said 4 x combined salaries minus any monthly commitments which i make to be around 220k budget for the build allowing for 10k contingency, im hoping to get the shell up/liveable min so i can remortgage then do the rest as i have time 170m2 from what ive heard it will be tight, yes i think regarding the vat that cashflow to actually get it done will be most important rather than cost

10 hours ago, Amateur bob said:

ive spoken to buildstore and they said 4 x combined salaries minus any monthly commitments which i make to be around 220k budget for the build allowing for 10k contingency, im hoping to get the shell up/liveable min so i can remortgage then do the rest as i have time 170m2 from what ive heard it will be tight, yes i think regarding the vat that cashflow to actually get it done will be most important rather than cost

 

I looked at buildstore first,  was expensive, the product they were suggesting was with newcastle building society the fees and insurance were mental. Don't know enough about remortgaging part way through, probably going to be more fees, insurance and definitely the need for structural warranties. 

 

Would be useful to get a mortgage promise/offer just in case when it comes to the application it is less. 

 

I went direct to the Scottish Building Society. If your outwith Scotland you should have more choice when borrowing.

 

If you have already got one I would recommend getting the book homebuilder's bible, it cost me around £10-15 and provided a good grounding in all areas of the self build.

Edited July 2, 20197 yr by Thedreamer

We are being suggested by Buildstore to go with a product from Newcastle Building Society also, given this is the ONLY mortgage provider we can get at this time I have no idea if the fees are unusually high.

 

The only reason we are interested in buildstore is they have 'promised' we can keep our current property if we prove cash funds to cover our mortgage for a year, might not be an option for you however I would believe there would be lots of prospective self builders out there who dont know this is an option. We certainly didn't to begin with!

 

As for the Scottish Building Society my experience is a very bad one, their lending criteria is so strict, great if you qualify i suppose. I believe their lending criteria was 3/3.5 joint salary plus a 10% cash contingency on top. Our current property was considered an expense unlike Buildstore so with that taken off we could just about afford to build a garden shed ?

4 minutes ago, soapstar said:

We are being suggested by Buildstore to go with a product from Newcastle Building Society also, given this is the ONLY mortgage provider we can get at this time I have no idea if the fees are unusually high.

 

The only reason we are interested in buildstore is they have 'promised' we can keep our current property if we prove cash funds to cover our mortgage for a year, might not be an option for you however I would believe there would be lots of prospective self builders out there who dont know this is an option. We certainly didn't to begin with!

 

As for the Scottish Building Society my experience is a very bad one, their lending criteria is so strict, great if you qualify i suppose. I believe their lending criteria was 3/3.5 joint salary plus a 10% cash contingency on top. Our current property was considered an expense unlike Buildstore so with that taken off we could just about afford to build a garden shed ?

what multiple of joint salary were buildstore offering? they told me 4-4.5 but wont give me a mortgage promise until planning is passed

9 hours ago, Thedreamer said:

 

I looked at buildstore first,  was expensive, the product they were suggesting was with newcastle building society the fees and insurance were mental. Don't know enough about remortgaging part way through, probably going to be more fees, insurance and definitely the need for structural warranties. 

 

Would be useful to get a mortgage promise/offer just in case when it comes to the application it is less. 

 

I went direct to the Scottish Building Society. If your outwith Scotland you should have more choice when borrowing.

 

If you have already got one I would recommend getting the book homebuilder's bible, it cost me around £10-15 and provided a good grounding in all areas of the self build.

they say theyre not giving me a mortgage promise until planning is passed

At this stage they are promising 4.5, they dont seem to think we will have an issue getting funding which far exceeds others which makes me slightly suspicious. We shall only know when we make our formal application. I hate to say it but part of me feels they are promising the world to get their application fee...i really hope this is not the case ?