Self build valued less than build cost

alexasel

We are building a hebhome kithouse  In a rural area which will cost us >£375 to build including the price of the plot. 

We had a valuation done by a local agent who has valued it at £295k based on our plans. We are shocked at how low it has been valued and concerned we will not get a mortgage. Anyone experienced something similar or have any advice? 

ProDave

In Scotland presumably?

Some areas house prices are so low, and not even recovered to 2008 levels, that you can indeed spend more on a self build than the house is worth.

We could be in that situation. i am 5 years and £220K into building mine and it will certainly be worth less than £300K.  If I had paid a builder to do the lot, rather than spend 5 years doing a LOT of work myself, I could well have spent more than the house is worth.

alexasel

It’s South Lanarkshire. This is very worrying. We’ve already invested a lot of money. 

comeandgo

I think that's normal with a hebhome kit.  There was one of the first built near us and gossip was it cost half a million, it would be valued about £450, 000 now going on other properties .

comeandgo

comeandgo said:

I think that's normal with a hebhome kit.  There was one of the first built near us and gossip was it cost half a million, it would be valued about £450, 000 now going on other properties .

Tried edit but it would not work, husband has just told me it was not a hebhouse but the German kits.

Doozergirl

A rough way of getting a valuation that's comparable with local properties is to identify detached homes and divide their asking prices by the number of square metres. 

Take an average of several homes to get an average price per square metre and then multiply that by the number of square metres in your house.  

Ideally the prices would be sold prices, but it's harder to find data.  No doubt yours would be to the top end of the average, being a high quality build, but it's probably not going to be that far off.  

How did you anticipate the final value when you started the process? 

AdrianC

Did somebody promise you it'd be worth more than you spent?

They lied.

alexasel

Sounds like I’m going to be living in a caravan for a very long time!

Elmer_BeFuddled

If you are buying/building your dream home, why worry what it's worth? You're going to live in it aren't you?

Marshaltown

alexasel said:

We are building a hebhome kithouse  In a rural area which will cost us >£375 to build including the price of the plot. 

We had a valuation done by a local agent who has valued it at £295k based on our plans. We are shocked at how low it has been valued and concerned we will not get a mortgage. Anyone experienced something similar or have any advice? 

Presumably if the agent had "valued" the property at say £495k then you would be a lot happier. However both "valuations" would be completely irrelevant as an estate agents opinion won't be relied on when it comes down to the value of the property for mortgage lending.

John_

It’s certainly possible that they’re right. A friend built a house in the London commuter belt a couple of years back for £2.1m that was worth about £2m when finished. They knew that this was going to be the case at the start of the build.