cost of building a House

justpurchased

johnycoldears wrote: »

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.

Good answer. i purchased a detached house for £250k in other places that would be a 2 bed semi.

Pobby

Well I had a quote about 3 years ago for a 3/4 detached house and I was told building and materials would be 80k. A few k more would give me 2 semi detached houses and it was suggested that I sell one off to cover all building costs.

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?

Sorry, I think I just fully understood the the quote above. Are you saying that overheads CAN'T be 5% because total staff costs are £244 million.

You may well be right about the 5%, but it is highly unlikely that all the staff costs are accounted for as overheads. Typical convention would cost site staff to the direct construction (the Site Managers, Engineers, Surveyors and possibly Contract Managers).I.e they are part of the buld cost. Only the support staff based in the head and regional offices are costed into the total overhead - hence the 6% I quoted from the company I work for.

I know it's splitting hairs, it all boils down to what you classify as a direct build cost and what is an overhead. If you classify all staff as overheads then the 1/3 mark up certainly makes sense.

God, I've just read this back and I'm even boring myself now. Last post on the topic:o

lostinrates

A mad thought here, but does the cost of building materials somehow dictate the floor the market can drop to? Although I realise..and regret...that noone will ever give land away land has increased dramatically over the last ten or so years (at least 300% increases, I've seen some land in areas go for ITRO 500% more than it did 10 or 12 years ago, from just over £2k per acre to £10k and acre....yes agricultural not building land...although often bought with future investment hoped for). I'm waffling...the point is, a lot of people build what they can't afford to buy ATM, so prices simply can't drop below what you could build for could they?

adr0ck

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.

so my guesstimate of 10-15% profit is correct:D

justpurchased

lostinrates wrote: »

A mad thought here, but does the cost of building materials somehow dictate the floor the market can drop to? Although I realise..and regret...that noone will ever give land away land has increased dramatically over the last ten or so years (at least 300% increases, I've seen some land in areas go for ITRO 500% more than it did 10 or 12 years ago, from just over £2k per acre to £10k and acre....yes agricultural not building land...although often bought with future investment hoped for). I'm waffling...the point is, a lot of people build what they can't afford to buy ATM, so prices simply can't drop below what you could build for could they?

Prices can not go below current land costs (land cost have droped a lot though) and building costs. Anyone saying sub £100K is hoping as that is the only way they can afford a property.
I think if you purchased some buliding land at auction now with planing permision and multiplied it by 3 you would be not far of bottom price for a house.

adr0ck

please note re large housebuilding sites

you need to add in the cost of building an average of 30% affordable homes as well

therefore if your a Barrett etc and you have a site of 100 home - 30 of these will need to be affordable

adr0ck

justpurchased wrote: »

I was giving the basic 1/3rd rule somthing you compleatly disagree with but which is used by all builders in the UK.
You are talking Net profit, not Gross (like I was) but in terms of the post that is neither here nor there.
It is an open forum well done, but to help people it is usualy good to answer there questions.
I was not the person getting angry i was being helpfull It is you who could not accept all i was doing was answering the OP's question. I did not want to argue over it but for some one who trys to lay the angry card at my door you best look in the mirror again.

you need to reread your posts

yes you were the person who got angry first and started calling me stupid first

i simply replied in your language

mewbie_2

adr0ck wrote: »

...therefore if your a Barrett etc and you have a site of 100 home - 30 of these will need to be affordable

As opposed to none of them.

lostinrates

justpurchased wrote: »

Prices can not go below current land costs (land cost have droped a lot though) and building costs. Anyone saying sub £100K is hoping as that is the only way they can afford a property.
I think if you purchased some buliding land at auction now with planing permision and multiplied it by 3 you would be not far of bottom price for a house.

TBH I'm not seeing as much drop in land costs as house costs yet (we are looking at large acrages of agricultural land in areas where building is likely to be granted subject to an AOC or Equine or A OC as one of our options).