Inflation. Wrong time to start a self build?

[flanagaj]

We have sold our property and have had our offer accepted on a building plot.  The plot price is reasonable for the current market and we obtained a price that we were very happy with for our house, but inflation is concerning me.   I feel the 2% inflation figure is actually way off and if you take inflation with regards to building materials / costs it is running higher than 2%.   My concern is that build costs and construction costs are going to push the build costs way in excess of our budgeted £1000 - £1300 m2

 

Are other self builders seeing that their build costs are now beginning to spiral?

[Marvin]

At present material availability is irratic.

 

[nod]

We completed our first self build two years ago  for £815 m2 and had hoped that our next one would be und £1000m2 

But it’s difficult to put a figure on it with what seems like daily price rices 

labour price increases  don’t look like coming down anytime soon either 

[LA3222]

Caveat preemptor - @nod is unique in achieving such low figures. Being in the trade, owning your own business and doing nearly everything yourself puts you in a unique position.

 

I wish people would add context when posting figures on here. The unwitting, lay person will see such posts and potentially misjudge costings for their own potential build.

 

There are very few who achieve figures of £1000/m2 and below. Very few.

 

I would suggest that the average tends to sit between £1300 - £1800 per m2 and that is heavily dependent upon standard of finish and the amount of work you take on yourself.

 

You will also find that people on here report their figures very differently, some may include everything such as legal costs, landscaping etc. etc., whilst others will not.

 

Take the figures you see on here with a healthy dose of salt and question what they have included, else you may gain a false impression.

 

The number I mention above is pre Covid madness, God only knows what the average is now. I daresay it is a fair chunk more.

[Ronan 1]

Your location can also play a massive part.i.e. London at one end of the cost scale and NI at the other end (thankfully)

[Happy Valley]

Yes expecting to pay 10% more overall for our new build. Most materials have gone up by way more but our labour and professional fees have been static.

 

We just poured the slab yesterday. 

 

I'd be content in the fact that you have sold your property when prices are at an all time peak. We have yet to sell ours as building within the garden and am hopeful that the increase in value offsets the increase in the costs.

Edited June 24, 2021 by Happy Valley

[Bonner]

Fully agree, don’t count on £/m2 rates for any kind of financial planning. The difference between £1500 and £2000/m2 on the average self build is £100k or more. Get a costing done by a QS or online estimator, then add all the utilities, fees and finishes. Don’t forget garage and landscaping which can be significant costs. If you must use a rate for basic forecasting, I would start with £2000/m2 at the moment even for fairly basic spec. 

* in the midlands *

Edited June 24, 2021 by Bonner

[ProDave]

We are almost complete for £1000 per square metre just for the build not including land, services or fees.  But behind that figure is 5 years of DIY work and some serious hunting out of bargains to keep prices down.

 

Perhaps more worrying is difficulty actually getting material.  A friend is about to start a new build and has been pricing materials, and in that conversation he has been quoted > 6 months delivery time for roof tiles for instance, so even though he has not broken ground yet, he is thinking of ordering the roof tiles now just to stand a chance of having them when needed.

[ToughButterCup]

10 hours ago, flanagaj said:

...

Are other self builders seeing that their build costs are now beginning to spiral?

 

Of course we are. They have never gone down, and apart from a few well organised BH members (see above) , very few of us have come in  ' ...on price...'  (there are many interpretations of the term 'price')

Grand Designs - ands other similar programmes - tendency to statistical manipulation annoys many of us.

 

Now my approach has had to become:  There is a way round this challenge : just find it and do it.  

 

If the casual converstaions I have with folk walking past our build are an indicator, there are many (BH guests I suspect)  reading these posts who regard self build as a priviledge. And I agree. Mostly.

 

To answer you directly: No, its not the wrong time to start a self build. Because prices are only one of the many challenges self builders face

Edited June 24, 2021 by ToughButterCup

[ProDave]

The "economy" has a built in tendency to go through boom and bust cycles (in spite of one previous chancellor claiming to have eliminated that.)

 

The best time to build is during a bust cycle, as long as your own finances will allow that.  During a bust cycle everyone is afraid of spending money, afraid of loosing their job, so demand is low, no competition for material and labour is plenty.

 

As soon as you get a hint of a boom cycle, everyone starts spending like they have to buy it now or they won't be able to afford it later, so demand goes through the roof, prices go up and it becomes hard to find material or labour.  This is not the best time to be building as you can't proceed with much certainty about when it will get done and how much it will cost.  But this is where we are now.  A lot of people have spent the last 18 months doing nothing, spending nothing, shut up inside worrying.  All that pent up demand and cash is now flowing.

 

But few have the luxury of choosing when to build.  Other circumstances will dictate that.

 

My own guess:  If this "boom" is just fuelled by the Covid lockdown and pent up demand, it will be short lived. Perhaps 2 years would be my guess?  Then the realities of debt and inflation are going to hit home hard for a lot of people.

 

[shuff27]

Relevant topic as I agreed a purchase price on a plot about 3 months ago but have yet to exchange contracts as there are ongoing delays at the Land Registry meaning the plot has not been officially registered.

 

In the meantime the quotes I had for timber frame & groundworks have been increased by about 8%.

 

I'm mulling over whether to pull out of the purchase.  Dilemma  - I've already sold by current home & renting it back from the new owner & prices of comparable existing houses have also risen due to the stupid stamp duty holiday.

 

I've already sunk about about a grand into modifying the house plans & submitting planning amendments.  In the end I'll probably still go ahead & just have to accept self build will cost more & take longer.

[Ralph]

We fixed priced our build with the builder 18+ months ago. We have been told that the price now would at least 15% higher now. That's just with materials and labour costs. 

 

There are some new houses going up not far away where you put a deposit down at the plot stage and pay a fixed price once it's built. The fixed price difference between those that put their deposits down and few months ago and those that did it last week is apparently 20%+ and they all have massive delays. 

[nod]

2 hours ago, LA3222 said:

Caveat preemptor - @nod is unique in achieving such low figures. Being in the trade, owning your own business and doing nearly everything yourself puts you in a unique position.

 

I wish people would add context when posting figures on here. The unwitting, lay person will see such posts and potentially misjudge costings for their own potential build.

 

There are very few who achieve figures of £1000/m2 and below. Very few.

 

I would suggest that the average tends to sit between £1300 - £1800 per m2 and that is heavily dependent upon standard of finish and the amount of work you take on yourself.

 

You will also find that people on here report their figures very differently, some may include everything such as legal costs, landscaping etc. etc., whilst others will not.

 

Take the figures you see on here with a healthy dose of salt and question what they have included, else you may gain a false impression.

 

The number I mention above is pre Covid madness, God only knows what the average is now. I daresay it is a fair chunk more.

Apologies 

Heres some context 

While I own a business we used labour from our business for six man days 

only Extra pair of hands with the render for three days and one man to help me get the slates up onto the roof 

The footings and brickwork I did myself Even though I’m not a Brickie Then brought five Brickies in to build the rest 

I did all the joinery I’m not a joiner 

Most of the plumbing and electrical With the guidance of a sparks who did all the checks and terminations as did a heating engineer with the boiler and helped me with the UFH which I had no clue of to start with 

I’d never slater a roof before but learned

With several hundred m2 of Italian tiles 

three  German bathrooms 
and a expensive German kitchen We could have easily cut costs 

 

 

The clues in the title Self Build 

If you are looking at turn key The  M2 price will be high 

 

While people need to be realistic with there budget I don’t think shooting there self build dream down before they start is encouraging 

 

Anyone needing context from posts on here only need to look at previous posts 

I’m sure I’ve put a spreadsheet on when we did our vat claim

Or they can always Ask ?

[ToughButterCup]

There ya go @flanagaj: I would    - Just Bloody Do It - . 

[patp]

We are in the middle of ours now and it is scary how things are going. We always had a contingency plan though and it looks like it will be needed. In our case it is a once in a lifetime project that has come towards the end of our life and not through choice. As above - just get on and do it.

Edited June 24, 2021 by patp

[Oz07]

@ProDave right we are definatley in the boom cycle atm. How long it will last is anyone's guess? @Mr Punter?

[Moonshine]

4 minutes ago, Oz07 said:

@ProDave right we are definatley in the boom cycle atm. How long it will last is anyone's guess? @Mr Punter?

 

speaking to a ground worker, he reckons he has projects lined up and very busy for the next 4 years!

[Oz07]

Everyone in the trade seems to be. I bet it was all the same in 08 though I reckon not many see it coming. 

[Adsibob]

1 hour ago, Oz07 said:

@ProDave right we are definatley in the boom cycle atm. How long it will last is anyone's guess? @Mr Punter?

Today’s Bank of England decision to keep the base rate at 10 basis points and continue QE through the autumn, suggests that the rebound from Covid will continue until at least the end of the year. Beyond that I guess it depends on how well the NHS fares during the winter and whether further lockdowns will be required or not. Hopefully by Easter everything will be more or less back to normal Covid-wise but I suspect the economy will then start to have to face the reality of Brexit, which we have largely been inoculated from due to the grace periods under the Withdrawal Agreement.

[Mr Punter]

On 24/06/2021 at 12:42, Oz07 said:

@ProDave right we are definatley in the boom cycle atm. How long it will last is anyone's guess? @Mr Punter?

 

Until September 2022.  You did ask for a guess.

[SimonD]

One way of looking at this that nobody has mentioned is to compare current situation with buying a ready built house. Round us people are struggling to find houses to buy and prices have gone through the roof. If buying a plot right now, I'd count my blessings that I've got a plot and relax in the knowledge that unless I'm massively flush with cash to speed through the whole process, things will be clearer once I've got planning and design sorted out, let alone got all the builder quotes in. But then I've done all of it myself so it's taken a rather long time, but as @nod said, it is self-build!

 

[nod]

So true 

We bought the plot and built for 420k

The finished house is valued at 750k

Quite a difference 

[ProDave]

42 minutes ago, nod said:

So true 

We bought the plot and built for 420k

The finished house is valued at 750k

Quite a difference 

How different it is in different places.

 

Pre this current boom, our finished build cost including land would be about £230K and it would be lucky to sell the new house for £250K.  I had already concluded had I not done so much labour myself, the new house would have cost more than it's market value.

 

Some places need a bit of house price inflation.

[markc]

3 minutes ago, ProDave said:

How different it is in different places.

 

Pre this current boom, our finished build cost including land would be about £230K and it would be lucky to sell the new house for £250K.  I had already concluded had I not done so much labour myself, the new house would have cost more than it's market value.

 

Some places need a bit of house price inflation.

You can have some of our house valuations if we can have your land availability and costs please. Two+ years looking for a plot around here and all i can find is window box size plots with planning for a pair of semi`s and a bargain at £1000 per square metre ..... for the land!

[Adsibob]

5 minutes ago, markc said:

You can have some of our house valuations if we can have your land availability and costs please. Two+ years looking for a plot around here and all i can find is window box size plots with planning for a pair of semi`s and a bargain at £1000 per square metre ..... for the land!

Have you considered buying an old property that can be demolished and start over, or partially demolished? In most parts of London, that is almost the only way to do self build and what we've more or less ended up doing.