cost of building a House

Cannon_Fodder

Yawn.......

napoleon

Two bald men fighting over a comb. Nobody's building houses anymore so there's nothing to worry about.

justpurchased

napoleon wrote: »

Two bald men fighting over a comb. Nobody's building houses anymore so there's nothing to worry about.

True. very true

Seen_the_light_4

Back to reality....

We built a 5 bed 210msq house with double garage in 2006 and the costs were as follows:

Land £143k
Fees £7 solicitors, design etc.
House construction and fitting out £210k inc cost to connect utilities
Total £360k
Worth about £450k never had it valued, this is based on the cost of neighbouring houses.

The best point is that its designed to our specification with rooms, layout and fittings exactly as we required.

The national housebuilders will get a greater economy of scale due to buying large parcels of land, standard designs and employed tradespeople. Even after their headoffice costs they will make a good return - or used to.

Hope this is useful

Idiophreak

I find the whole topic quite interesting, really...

What I don't understand (something else for you guys to argue over) - is that local new build prices increased by something like 200% here in 5 years.

Now, are we really to believe that the costs of building the things went up by the same amount? I'd have thought the costs were more or less fixed and not related directly to the housing market? (and therefore can't be a % of the price)

johnycoldears

justpurchased wrote: »

:rotfl:

Wrong I have a friend who manages large building projects for a large group of builders.

I am a Quantity Surveyor for a large mixed construction company (£100 million+ turnover). Whilst we don't carry out speculative house building for ourselves, our mark up to Clients is rarely more than 10%.
We need to recover approx 6% for head office overheads, anything above this is profit - typically another 2 or 3% overall.

The mark up depends on the size of the builder. The small bob a job firms operate with as much as 25% overheads whereas massive companies, like say Balfour Beatty, have as little as 3 or 4% overheads.

Spec house builders operate on greater margins than typical construction companies. For example Barratts showed £194.6 million profit before tax on £1.652.8 million turnover, i.e 11.7% profit, in 2007. I would imagine their overheads to be somewhere around the 5% mark- giving a total margin of about 17%.

By the way when calculating the land / build / profit split you need to add in a fourth category - infrastructure costs. For example a large housing estate will need access roads, link roads, drainage, public spaces etc. etc. Typically this will be somewhere around 3 or 4% of the total sale price.

It's all as clear as mud now isn't it.

justpurchased

Idiophreak wrote: »

I find the whole topic quite interesting, really...

What I don't understand (something else for you guys to argue over) - is that local new build prices increased by something like 200% here in 5 years.

Now, are we really to believe that the costs of building the things went up by the same amount? I'd have thought the costs were more or less fixed and not related directly to the housing market? (and therefore can't be a % of the price)

Hi more than likley land cost increases so they would budget more to build the property, the figures are not set in stone just a guide for budgeting.
As land price increases plot sizes decrease to make things work out.
But I would say material costs have shot up over the last year.

justpurchased

johnycoldears wrote: »

I am a Quantity Surveyor for a large mixed construction company (£100 million+ turnover). Whilst we don't carry out speculative house building for ourselves, our mark up to Clients is rarely more than 10%.
We need to recover approx 6% for head office overheads, anything above this is profit - typically another 2 or 3% overall.

The mark up depends on the size of the builder. The small bob a job firms operate with as much as 25% overheads whereas massive companies, like say Balfour Beatty, have as little as 3 or 4% overheads.

Spec house builders operate on greater margins than typical construction companies. For example Barratts showed £194.6 million profit before tax on £1.652.8 million turnover, i.e 11.7% profit, in 2007. I would imagine their overheads to be somewhere around the 5% mark- giving a total margin of about 17%.

By the way when calculating the land / build / profit split you need to add in a fourth category - infrastructure costs. For example a large housing estate will need access roads, link roads, drainage, public spaces etc. etc. Typically this will be somewhere around 3 or 4% of the total sale price.

It's all as clear as mud now isn't it.

it is but that is where the confusion between net and gross is. Overheads must be 5% of turnover they had a staff cost of £244M you can't pull an approximate price out unles you went through the whole of there anual report. But i thought most people were happy with a 3rd being the aproximate build price?

GDB2222

To answer the OP's original question, if the average property is say 800 sq ft and costs £80 /sq ft to build, the building cost is £60-£70k. That's only a guestimate, but even so the building costs are nowhere near enough to provide an underpin to prices for the average house.

johnycoldears

justpurchased wrote: »

it is but that is where the confusion between net and gross is. Overheads must be 5% of turnover they had a staff cost of £244M you can't pull an approximate price out unles you went through the whole of there anual report. But i thought most people were happy with a 3rd being the aproximate build price?

How long is a piece of string ?. - The land is the big variable factor.

Reclaimed land in undesireable areas might only account for 15 - 20% of the total build cost. A plot on sandbanks, probably 90% +.

It all depends where your £180k house is situated. Some parts of the country it buys a four bed detatched, others a one bed flat.

Probably best to factor in the location desireability in your calculations.