Hello, 

We are still chasing the dream of building our bungalow... Everything was pretty much in place then covid! Furloughed twice, back on my feet again and now building material have gone sky-high. Original build cost 20 months ago has now gone up beyond what we can afford to raise on self build mortgage/salary.

Anyone with ideas which we can cover the shortfall of approx 30k?

 

We will have our current property which we Could remortgage towards the end of the build when we need to 30k?

Is this possible? 

 

We became masters of finding funds from nowhere, when early in the build we found the housing market dead and our old house would not sell.

 

Instead we let it, and the new house was completed largely on the rental income and from our earnings.  But that meant it became very much more of a self build with us doing a lot more ourselves than originally planned and it took a lot longer.

 

What is the plan with the old house?  Can you do as we did, move into a static caravan on site?

1. Do as much as possible yourself.

2. Plan everything well ahead of time, know exactly how you will heat, ventilate, insulate.  Look at all options.

 

We originally wanted to go turn-key, until we got prices, then looked around and went Durisol, had to change warrant and structural engineering, but still saved a fortune as I built it myself.

 

3.  This is why 2. is really important. Shop around, check Gumtree, eBay etc, example, the cost of floor installation was £4k cheaper buying from the internet than from local building merchants. New surplus thermal store 15% of original price (75% off)

 

 

 

Thanks for the info from you both, maybe being project manager and getting trades in as and when needed could save a few pounds instead of getting one builder to do the whole job. 

I kept scopes of work very limited, the roof woodwork, was one scope, I knew where we had over runs and cost of changes.  When work was completed I paid the invoice.  Used the same company for spray foam insulation based on performance of the roof scope.  And so on, where possible I took recommendations from trades in the house for the next scope of work, plasterboard and second fix joinery was done on this basis.  Generally I bought all materials and free issued.

 

A plumber will go to the building merchants he always goes too, not ask the price, you are invoiced cost + %

2 hours ago, Slewfoot said:

Hello, 

We are still chasing the dream of building our bungalow... Everything was pretty much in place then covid! Furloughed twice, back on my feet again and now building material have gone sky-high. Original build cost 20 months ago has now gone up beyond what we can afford to raise on self build mortgage/salary.

Anyone with ideas which we can cover the shortfall of approx 30k?

 

We will have our current property which we Could remortgage towards the end of the build when we need to 30k?

Is this possible? 

 

It worth speaking to a good mortgage broker who is willing to do things like make applications for you that he knows you won't accept just to test the market and see what an underwriter thought of a particular aspect of your finances, or who has good contacts at the major lending banks. The fact that you have an existing property that you can leverage will be massively helpful. Some lenders consider that a "let-to-buy", mortgage. Talk it through with a good broker, ask him questions like: "If I am living on the property, but still making income from it by renting some of it out, will the fact that my residential address and the address of the let to buy property are the same be problematic?

Rates are at an all time low right now and almost certainly are going to go up at some point soon. Either at the next MPC meeting in December or at the one after which I think is end of Jan or early Feb. It is probably worth you starting the process of applying now with a mortgage broker to secure a rate. You don't need to actually accept the mortgage, as once mortgage papers are issued they are usually valid for 6 months. So this would lock in the current low rates for six months. A decent mortgage broker would only charge you his/her fee once, even though he knows you might end up rejecting this mortgage and then reapplying later, so this strategy gives you an option.

19 hours ago, Slewfoot said:

We will have our current property which we Could remortgage towards the end of the build when we need to 30k?

Is this possible? 

 

 

I would be cautious about starting without all the funding in place. My feeling is we may see lot of inflation and higher interest rates next year which might make it harder to get mortgages. If this is what you need to do and can afford the repayments I would do it sooner rather than later.

 

It's also likely that the remortgage will come with fewer conditions than the self build mortgage.  The remortgage might be released all at once whereas the selfbuild mortgage will be released in arrears subject to a valuation of the stage just completed.  

Do you have solvent friends or family going nowhere soon?

 

Personal loan (not secured) £25k 5 years fixed at 2.7 to 2.8% with zero early repayment charges. Get two or three of those and you're laughing. Not in your own name as that'll trash your mortgage options. But if you have that kind of relationship with solvent friends and family that don't need to borrow soon it's a very flexible and not absurdly costly way to borrow.

Sell your house and rent. We did this and don't regret it. Peace of mind knowing you have the cash in the bank.