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Self-build - what could you achieve for £250k?

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  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    10,000 Posts Combo Breaker
    UKmitch wrote: »
    The wife and I have been in a new build for less than a year, and it's given us the foundation and confidence to focus on life and what we want to get out of the next 5-10 years.

    Now we're not under the terms of a rental contract, we're able to rent out rooms to lodgers, operate businesses from home, keep a pet, paint/decorate, not worry about being thrown out after 6 months on a whim, tend a garden, the list goes on...

    We're both fans of the programme Grand Designs, and when you're only paying materials and labour, not a builder's profit margin, I can see how we could build something more impressive than your average 3-bed semi on the same budget.

    Has anyone on MSE built their own home? It doesn't have to be Grand Designs scale, but I'm trying to find out what the first steps are and whether it will remain a pipe dream, or with some research and effort, could be a reality. If you have, where did you start and did you feel you 'had to reach a certain point in life/work' to be happy to do it? Is it even a risk?
    My parents built a home whilst my sister and I were growing up. The whole process was fascinating. We were involved with quite a lot of it and it was actually quite a lot of fun. We found an appropriate bit of land then purchased a design (it's much cheaper to buy a design from a selection rather than make a design from scratch), we made a few modifications to it, then commissioned a project manager to oversee the build. There's a huge number of steps involved from getting approval to the final sign off and moving in, then re-mortgaging to pay off all the higher interest debt that was taken out during the build to secure a lower and longer term interest rate. During the build the mortgage is usually a variable one then once complete you can switch it to a fixed rate. We only lived in it for 2 years and the selling price of the property was twice what was paid for it. My mother now owns a house worth £400k and has only ever had minimum wage jobs.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • eddddy
    eddddy Posts: 18,017 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Just as background info - as a rule of thumb, when builders/developers build a house, they break down its value as follows:

    33% of house value is land
    33% of house value is build costs
    33% of house value is profit

    Presumably, you will be employing a builder (plus architects, engineers etc), who will want to make a profit - so perhaps your breakdown will be:

    33% of house value is land
    33% of house value is build costs
    17% of house value is builder's profit
    17% of house value is your profit


    So typically, land with building potential (or planning consent) will be priced at about 33% of what the final house would be worth.

    But you will find many 'investment opportunities' - small pieces of land for about £5k - which the seller says may get planning consent in the future. Invariably, these are scams.
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