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Original poster

I want to self build, how to finance it?

43 replies

Blibbleflibble · 19/09/2022 12:15

We live in the North West, have a house that we've paid off that's worth £400k. We have a joint household income of about £60k-£65k (including bonuses) no debt and £20k savings.

I have seen a piece of land that I could (hopefully) get for £300k and would probably need £300k to build what we want.

How is the best way to finance this?

Put our house on the market and get a £300k mortgage to buy the land and use the proceeds for the house sale to build and rent whilst building? I don't think the person who owns the land would wait for a chain so I think I have to be able to buy before selling my own house.

Thankyou in advance for any advice.

OP posts:
UserNameNameNameUser · 19/09/2022 12:18

Buildstore mortgage.

Basically you use your current house plus new build at various stages as collateral against the build cost. They release funds at various points to finance the build (eg purchase of land). Once the new build is complete you sell off the original house and are left with a regular mortgage on the new build.

Original poster
Blibbleflibble · 19/09/2022 12:34

UserNameNameNameUser · 19/09/2022 12:18

Buildstore mortgage.

Basically you use your current house plus new build at various stages as collateral against the build cost. They release funds at various points to finance the build (eg purchase of land). Once the new build is complete you sell off the original house and are left with a regular mortgage on the new build.

Thankyou, although I wonder if they would even lend us £600k plus with just a £60k joint income? I guess technically we have alot of equity although I'd panic about house prices crashing mid project if I need the equity of my current property to pay a chunk of that mortgage. 😅

OP posts:
Hawkins001 · 19/09/2022 12:51

Firstly how sure are you that the build will just cost what you estimate ?

ShadowoftheFall · 19/09/2022 13:06

Well, if Grand Designs on tv is anything to go by, you borrow 600k, blast through that, somehow borrow an xtra 50k, have an unexpected baby, still not finished build, “find” another 100k, have a health scare/terrible weather, then finally, with “family” help, end up with something that looks amazing and smile smugly for the cameras.

TheLeadbetterLife · 19/09/2022 13:11

ShadowoftheFall · 19/09/2022 13:06

Well, if Grand Designs on tv is anything to go by, you borrow 600k, blast through that, somehow borrow an xtra 50k, have an unexpected baby, still not finished build, “find” another 100k, have a health scare/terrible weather, then finally, with “family” help, end up with something that looks amazing and smile smugly for the cameras.

Then a year later they divorce and you find the house on Rightmove.

Original poster
Blibbleflibble · 19/09/2022 15:59

Hawkins001 · 19/09/2022 12:51

Firstly how sure are you that the build will just cost what you estimate ?

Not very sure at all TBF, that figure is... hopeful

OP posts:
Original poster
Blibbleflibble · 19/09/2022 16:01

ShadowoftheFall · 19/09/2022 13:06

Well, if Grand Designs on tv is anything to go by, you borrow 600k, blast through that, somehow borrow an xtra 50k, have an unexpected baby, still not finished build, “find” another 100k, have a health scare/terrible weather, then finally, with “family” help, end up with something that looks amazing and smile smugly for the cameras.

😂Unfortunately no family help, would probably be smug if I pulled it off though, would try to keep it off camera so as not to look like a massive smarmy cunt.

OP posts:
Original poster
Blibbleflibble · 19/09/2022 16:08

TheLeadbetterLife · 19/09/2022 13:11

Then a year later they divorce and you find the house on Rightmove.

Show quote history

I can't be arsed getting a divorce, we'll just build it with enough bathrooms that we can have a 1000sqft each, paint a line down the middle and grind along unhappily in our naice house.

OP posts:
earsup · 19/09/2022 16:16

Have you thought about doing a straw bale build..??...am off to portugal next year to help a friend do one....very cheap...20 to 30k....very warm, not cold or damp....vat free as eco etc....!

mondaytosunday · 19/09/2022 16:19

You need to find out tough cost of the build before you do anything. The old £2000/m2 for a shell is no longer accurate due to the spearing cost of building materials.
There are floorplans online- you could try and get a builder to give you a rough quote off of one? Then add finishes (flooring, kitchen, bathrooms, etc). That will give you an idea if it's even viable.
Or just approach an architect and ask if £300,000 is enough (and I'd add a hefty 20% to whatever they say).
But practically you first need to raise about £300k for land, then there's stamp duty and lawyers fees. Can you raise that? The you get a stage build mortgage. Ask a broker.

hashbrownsandwich · 19/09/2022 16:21

Hate to spoil your fun but have you even considered planning yet?

PolarPolly27 · 19/09/2022 16:26

Blibbleflibble · 19/09/2022 12:15

We live in the North West, have a house that we've paid off that's worth £400k. We have a joint household income of about £60k-£65k (including bonuses) no debt and £20k savings.

I have seen a piece of land that I could (hopefully) get for £300k and would probably need £300k to build what we want.

How is the best way to finance this?

Put our house on the market and get a £300k mortgage to buy the land and use the proceeds for the house sale to build and rent whilst building? I don't think the person who owns the land would wait for a chain so I think I have to be able to buy before selling my own house.

Thankyou in advance for any advice.

Unless you plan to project manage and do much of the work yourselves, you will struggle to build anything decent for 300k unless it's very small. Does that include professional fees and is there an existing dwelling on the plot? We've done two self builds in the NW and the best advice I can give you is to have a large contingency fund. The first one we did sold for a huge profit though so bear that in mind too.

Original poster
Blibbleflibble · 19/09/2022 16:27

mondaytosunday · 19/09/2022 16:19

You need to find out tough cost of the build before you do anything. The old £2000/m2 for a shell is no longer accurate due to the spearing cost of building materials.
There are floorplans online- you could try and get a builder to give you a rough quote off of one? Then add finishes (flooring, kitchen, bathrooms, etc). That will give you an idea if it's even viable.
Or just approach an architect and ask if £300,000 is enough (and I'd add a hefty 20% to whatever they say).
But practically you first need to raise about £300k for land, then there's stamp duty and lawyers fees. Can you raise that? The you get a stage build mortgage. Ask a broker.

Checking mortgage brokers we can borrow £325k but we would need to contact a specialist to get the sort of loan we need.

I guess I thought the sale of my house (valued recently at £400k-£425k) would pay for the build and rent.

I may be being very naive.

OP posts:
Original poster
Blibbleflibble · 19/09/2022 16:30

hashbrownsandwich · 19/09/2022 16:21

Hate to spoil your fun but have you even considered planning yet?

It's had full planning granted a few years ago that expired in 2021, it has been owned by the same person since the 80s. It is begging for a house to be built on.

OP posts:
Original poster
Blibbleflibble · 19/09/2022 16:36

earsup · 19/09/2022 16:16

Have you thought about doing a straw bale build..??...am off to portugal next year to help a friend do one....very cheap...20 to 30k....very warm, not cold or damp....vat free as eco etc....!

I like the idea of SIPS, ground source heat and solar panels. I used SIPS to build a garden office that I designed myself in Maya (very basic box) and I'm very impressed with it as a building material.

OP posts:
Original poster
Blibbleflibble · 19/09/2022 16:40

PolarPolly27 · 19/09/2022 16:26

Unless you plan to project manage and do much of the work yourselves, you will struggle to build anything decent for 300k unless it's very small. Does that include professional fees and is there an existing dwelling on the plot? We've done two self builds in the NW and the best advice I can give you is to have a large contingency fund. The first one we did sold for a huge profit though so bear that in mind too.

Show quote history

There's no dwelling there, the plot is inbetween two houses on a residential street and has been granted full planning before that has now expired. I was intending to project manage and maybe £300k is incredibly naive, I would have a £75k-£100k contingency fund dependant on how much my house sold for.

OP posts:
PolarPolly27 · 19/09/2022 16:42

Try this to give you a rough idea:
www.self-build.co.uk/build-cost-calculator/

UserNameNameNameUser · 19/09/2022 16:46

£300k is a heck of a lot to pay for land without planning. And be warned that just because it has had planning in the past doesn’t mean it will again. All sorts of factors could have changed including e.g. access constraints. I don’t mean to be negative, but it’s something to consider. You are also unlikely to be able to get build finance on the land without planning.

slipperfsce · 19/09/2022 16:57

Checking mortgage brokers we can borrow £325k but we would need to contact a specialist to get the sort of loan we need.

On 65k?

Sprig1 · 19/09/2022 17:01

Do not pay anywhere near that for the plot if it hasn't got planning. In the nicest possible way, you sound like you have no experience in this kind of thing and have only just started researching. I would let this one go and, if you really want to self-build then do tons more research and then start looking for a suitable plot. Building anything at the moment is a nightmare (and extremely expensive).

Lampzade · 19/09/2022 18:10

Think carefully Op
Self building always cost much more than expected and is extremely stressful

Original poster
Blibbleflibble · 19/09/2022 18:28

UserNameNameNameUser · 19/09/2022 16:46

£300k is a heck of a lot to pay for land without planning. And be warned that just because it has had planning in the past doesn’t mean it will again. All sorts of factors could have changed including e.g. access constraints. I don’t mean to be negative, but it’s something to consider. You are also unlikely to be able to get build finance on the land without planning.

I really don't have any experience, I'm just trying to figure out whether this is a viable option. I wouldn't do anything without getting the land properly valued and costing the project properly, right now I'm just trying to find out where to start and if its even feasable with the equity I already have and our joint incomes.

OP posts:
Original poster
Blibbleflibble · 19/09/2022 18:30

@Sprig1 sorry my last reply should've quoted you.

OP posts:
clairethewitch70 · 19/09/2022 18:40

Our local council discourages infill house building and rarely gives planning permission. It was all the rage years ago and the lapsed permissions are not being renewed.

PointyMcguire · 19/09/2022 19:38

I’d expect the build costs to be significantly more than £300k. We’ve just had planning granted for a downstairs extension that would also add 2 bedrooms upstairs and initial builder’s quotes have been around £260-280k