We’re going through planning at the moment so are well into cost and budgeting. We have a good budget and have the money to build the house but it’s going to cost significantly more than planned and even that is probably going to go up by the time we start. It’s increasingly likely the finished house will be worth less than the cost to build it. Therefore, we are starting to question whether it’s worth it, sadly. On the other hand we have a great plot and plan to live the rest of our lives in this house so over all that time the costs today will hopefully even out in the long run. 
 

Anyone else questioning whether to build or not? 
 

 

is the reason house will cost more than value due to build spec or finish and fitting spec. if it's the latter, cut back on the level of finish, if the former, build and accept you have a quality build

I had this debate about 7 years ago.  These things go in cycles.  A lot depends on where you are, the cost of plots and the price of houses where you are.

 

My issue was 7 years ago houses here were "too cheap" and the "value" of a house was not much higher than the actual build cost.  At the time we we trying to sell our old house in a dead market. Everyone suggested if it's not selling, it's priced too high, but if I had reduced it to sell, then our old 5 bedroom house would have sold for less than the build cost of the replacement 3 bedroom house, and I was adamant i was not going to pay to downsize.

 

That balance has redressed thanks to an uptick in the market in the last few years.  But now the cost of materials is threatening to reverse that trend and tip the balance the other way.

 

At the time we decided we did not mind if it was cost neutral to go from old 5 bedroom house to new 3 bedroom house because the new house would be built so much better. And that is a key point of a self build, you get the house you want, built to the standard that you want of it, not some developers idea of what you might want built probably to a lesser standard.

 

Our solution to these issues was to do way much more of the build work ourselves than the original plan and it too a lot longer to build, but it made the numbers work.

People build because they cannot find a suitable property, in the location they want.  Many factors go into the selection of a suitable property.  Lots of the builds on this site, tend to be better insulated, more airtight and therefore much cheaper to run than anything on the general market place, they are also individual.

 

Our architect told us it would cost x to build, but then when you start getting prices, you soon realise its x++++.  After initially falling over at some of the prices, we changed the build method, moved away from a main contractor and did lots ourselves and managed contractors, for the scopes of work I didn't want to do.  This made the numbers work.  But its still not cheap.  Look to add value with great design, make it better than the normal building company, monopoly house boxes.

 

Individual houses with comfortable sized rooms, that need little or no heat input, cannot be compared to a 'normal' house.  Especially if you want to live in long term.

 

Don't give in too quickly think of/ask question, for different methods, to make it work for you.  There's a recession coming, all will change for better or worse.

5 minutes ago, JohnMo said:

Our architect told us it would cost x to build, but then when you start getting prices, you soon realise its x++++. 

Not our findings.  On our first build, we tried to engage an architect, and 2 quoted.  Both quoted us fees based on a percentage of the estimated build cost, and both quoted build costs that would have far exceeded the properties market value.  We proceeded without an architect and built it for half the build cost they estimated.

Left field idea.

Build the floorplan as a very cheap bungalow.

Then, if the market changes, knock down and rebuild.

Get the VAT back twice that way.

You also get to live where you want to if things don't change.

Short answer is NO

 

Its three years since we completed our previous build It’s valued at double what we have spent 

We expect to spend more this time 

But property prices have kept pace

What was true then Is true now 

You need to do as much as possible yourself 

Previously we came in at £815 m2 

We had hoped to keep it under a 1000 m2 on this one It’s probably going to be more than that But not significantly more 

Things are costing more but we are also making savings 

 

Quote for materials are varying by massive percentages Lots of suppliers cashing in 

 

 

 

6 minutes ago, nod said:

 

 

 

Quote for materials are varying by massive percentages Lots of suppliers cashing in 

 

 

 

We found that also, sometimes 2 to 3 the price on a like for like quote (same manufacturer, same part numbers)

We are maybe a quarter way through our build. Contractor led and its cost a lot more than we ever thought. Will it be worth what we’ve spent? Will let you know when it’s valued at end. Could we find anything that was of this spec, in this location, of the design that this is? No. And I think that’s the mindshift you have to make. I think you can self build and build for less than the value and be ‘quids in’, If you’re prepared to do a lot of the work yourself. But what’s the value of your time? As a young dad with 2 kids under 3 that time is priceless and so we went the route of having someone else build it (despite being handy, fitted

kitchen’s, bathrooms, built a garden room etc). Only you can value your time and then the reward of your build at the end. I am

hoping to god it’s worth the time,

stress and money but with the alternative being a box on an estate my gut says it will be. 

Our build will cost 25% to 33% more than anticipated in 2020. Some of this is down to materials and some is down to not compromising on the looks or efficiency of the building. We can see the finish line and should be in within 2 months. Had it valued last month at £150 to £200k more than the build cost together with land. So it can be done.

 

We were/are not in this profit on the new build but our home for the next 25-30 years.

Edited June 28, 20224 yr by Happy Valley

Thanks all. 
 

Just feeling a bit battered by the time everything takes. We walked onto the plot for the first time a year ago tomorrow and it’s been a trial to get from there to here. 
 

Had some good news though, SSEN are going to refund me £350 for my electricity install which means it cost us £760 for their bit plus the cost of the cabinet from Emiter and the concrete to mount it. I got the ducting for free as Drainage sales sent me the wrong stuff and I only noticed after I’d buried it so they refunded me the money. SSEN weren’t bothered as it turned out. 

4 hours ago, Kelvin said:

We’re going through planning at the moment so are well into cost and budgeting. We have a good budget and have the money to build the house but it’s going to cost significantly more than planned and even that is probably going to go up by the time we start. It’s increasingly likely the finished house will be worth less than the cost to build it. Therefore, we are starting to question whether it’s worth it, sadly. On the other hand we have a great plot and plan to live the rest of our lives in this house so over all that time the costs today will hopefully even out in the long run. 
 

Anyone else questioning whether to build or not? 
 

 

Keep at it, you go through periods of doubt.. that is part of the journey.. the less enjoyable part mind.

 

My own view is that if you have never built a house before you can expect to get a uplift of 10 - 15% compared to buying a similar house off the shelf. But you need to put in the work. Don't pay too much for the plot (but you have it already), make sure you get the right design team around you, work up a basic design.. review, try and understand how the house stays up structurally,  get some provisional prices then value design both Architecturally and Structurally.

 

If you do this then you'll learn loads, find out what things you really need and discover other things you never thought of in the first place. This time you spend goes towards the 10-15% but you could start to increase this return if you undestand the design. That starts in the ground / drainage  and that is where big savings can be made right at the outset.

 

Now that return may seem not a lot. There are folk on BH that do better.. but.. they have loads of experience, some are in the trade and will benefit from mechants volume discounts (they are already spending loads on their business account) .. normal folk can't access these terms.

 

However.. if you follow the above process I think you'll find you end up with a much better quality house that will cost less to run, be unique.. well not that much as if you have style, think through the design then it will be more valuable than a bog standard developers house and hold it's value relatively if not increase above the norm. In the past they were called "designer houses" or "Architect designed" and they attract a premium. A well designed house will always sell / command a premium value.

 

 

 

 

On 28/06/2022 at 19:47, Simplysimon said:

is the reason house will cost more than value due to build spec or finish and fitting spec. if it's the latter, cut back on the level of finish, if the former, build and accept you have a quality build

Not especially either. It’s just the general increase in costs. We got our timber kit price yesterday and it’s almost twice the price it was a year ago. It’s a closed panel system that is now dearer than their SIP system. 

When we hired an architect back in 2020, we gave them a target budget of £500k which we later upped by another £100k due to increases in desired spec.

 

We've just had two separate quotes from main contractors of c. £700k (£1700/sqm) just to get to a weather tight shell 😲

 

At those prices, it's very likely our total cost will far exceed the value of the finished product (donor bungalow/plot cost north of £500k) so we're now contemplating delaying 12 months in the hope the situation with materials has improved by then. If not, we'll probably look to decrease the footprint instead. I'd love to project manage everything myself but my job would make that incredibly difficult.

 

It's easy to say things will even out over the longer term but that will only be realised when you sell, and having money left over in the bank vs having nothing but extra debt results in a significantly different quality of life in the meantime.

1 hour ago, Kelvin said:

We got our timber kit price yesterday and it’s almost twice the price it was a year ago.

find a decent joiner, and stick build your kit, it's got to be cheaper than paying a kit manufacturer

6 hours ago, bgmill said:

When we hired an architect back in 2020, we gave them a target budget of £500k which we later upped by another £100k due to increases in desired spec.

 

We've just had two separate quotes from main contractors of c. £700k (£1700/sqm) just to get to a weather tight shell 😲

 

At those prices, it's very likely our total cost will far exceed the value of the finished product (donor bungalow/plot cost north of £500k) so we're now contemplating delaying 12 months in the hope the situation with materials has improved by then. If not, we'll probably look to decrease the footprint instead. I'd love to project manage everything myself but my job would make that incredibly difficult.

 

It's easy to say things will even out over the longer term but that will only be realised when you sell, and having money left over in the bank vs having nothing but extra debt results in a significantly different quality of life in the meantime.

That’s an enormous house and very expensive to get to weather tight. Ours is half the size and multiples lower in cost to achieve that. I don’t feel so bad now. 😂 Our plot was relatively cheap,  £138k including fees for 1.3 acres. I don’t see prices coming back down much as any fall in demand led reductions will be wiped out with inflation. I wouldn’t wait a year I’d build a much smaller house. 
 

Other half and I had a tough conversation about it all earlier and both agreed an upper limit we’re happy to spend. If it’s more than this and we can’t cost engineer our way out of it then we’re not going to build. 

Edited June 30, 20224 yr by Kelvin

One big house, well deep pockets. Sounds like a £1MM+ build + plot.

 

Trouble is main contractors have no idea where prices are heading, same as all of us.  So they will have built in lots of insurance against inflation, they buy from one supplier and take their cost at face value, as they passing it all on to you.  Hence the big cost.

 

Others on here, do and will build for way less, because they manage the job themselves, shop around for the best price and may also do a lot of work themselves.

 

Main contractor in uncertain times may not be the best choice of path to follow, but anything else may not suit personal circumstances, so horses for courses.

 

 

7 hours ago, Kelvin said:

I wouldn’t wait a year I’d build a much smaller house. 

 

The trouble is, building a significantly smaller house doesn't solve the problem - the plot+build cost would still be higher than the end value. The primary difference would just mean we're now in a house we don't particularly want to live in. We're obviously willing to compromise a bit on footprint and make other design changes that are perhaps cheaper to build, but we can't drastically reduce the size and still meet all of our needs.

 

Everybody has a different risk appetite and different priorities at the end of the day; for us, it makes sense to wait a year and see what happens with materials.

25 minutes ago, bgmill said:

 

The trouble is, building a significantly smaller house doesn't solve the problem - the plot+build cost would still be higher than the end value.

 

 

We're in the same boat.  Just received 3 main contractor quotes for 270 m2 build.  705k is the cheapest.  In Northern Ireland, not Surrey!!  They're having a laugh  😂

 

Its either build to watertight, or self manage. 

 

Or delay and hope this recession kills demand.  But I said that last year

 

A little edge of topic 🙂 .

 

I wonder what would happen if we had a Govt which tackled the never-ending Housing Price Bubble, and took as much speculation as possible out of property ownership?

 

At present the CGT exemption on main dwellings costs Govt around £35-40bn (ie about 4-5% of all of it) a year in lost tax revenue, and 1st Time Buyer support schemes first of all pump money in on the demand side (eg tax free deposit savings or equity loans), and then give unearned free money on the CGT loophole on future price inflation.

What would happen to eg plot prices in the larger picture if the CGT exemption was removed tomorrow? To say take us to a position similar to France, where aiui CGT is essentially 19% on first 50k Euro of gain, then 19%, plus a 7% to 17% "social levy", with some exemptions.

 

How would building costs adjust? I'd probably expect a squeeze on areas with over-inflated prices, and smaller change in the less expensive areas.

 

The current status as we all know is that self-builders get various exemptions - eg VAT and CIL exemption.

 

2 hours ago, Mr Blobby said:

 

We're in the same boat.  Just received 3 main contractor quotes for 270 m2 build.  705k is the cheapest.  In Northern Ireland, not Surrey!!  They're having a laugh  😂

 

Its either build to watertight, or self manage. 

 

Or delay and hope this recession kills demand.  But I said that last year

 

That’s about the max we are willing to pay cost/sqm for a main contractor. We aren’t going down that road though but we got it priced as a full turnkey build on the basis that if we could afford that then anything we do to reduce the cost I can sell to myself as a bonus. 
 

Our kit price is £145k to supply and erect to weathertight. That leaves us £340k to complete it. We have another £290k available before we need to think about other funds. This is for a 202 sqm house plus a 55sqm garage. We have some dearer than average groundworks that includes a straightforward retaining wall and some expensive plant for our borehole water supply. 
 

A recession will no doubt have an impact on demand but I’m not convinced it’ll have much impact on material costs. Trades might become more readily available of course. 

Edited June 30, 20224 yr by Kelvin

Kit houses are generaly expensive, but fast to build . I'm currently building a block house as the cost is a lot less. I'm paying the same for blocks as I was 2 years ago. Timber is way more expensive now so expect timber frame kits to track the timber price. 

1 hour ago, Miek said:

I'm paying the same for blocks as I was 2 years ago.

with the way energy prices have gone, i'd suggest they won't stay there for long

3 hours ago, Miek said:

Kit houses are generaly expensive, but fast to build . I'm currently building a block house as the cost is a lot less. I'm paying the same for blocks as I was 2 years ago. Timber is way more expensive now so expect timber frame kits to track the timber price. 

Yes and no. Their SIP kits haven’t increased significantly  nor have the CLT kits but their CPS kits have which are now dearer than the SIP equivalent. We prefer the CPS kit because the walls are deeper meaning all the window reveals are 300mm deep rather than 150mm. 

how low a U value are you going?