Self build valued less than build cost

ProDave

Although our house will only just be worth what it has cost us (remember with 5 years DIY work and counting) it is a far better house that you would have got if you just let a builder get on with it.

One of the issues is generally self builders are forced to pay higher prices for plots, even up here in the Highlands.  A developer building a large estate will get the land at a lot less per house, and then they have the economy of scale, and cut every corner possible and they can make money out of it. Just.

The usual compromise is to pay your builder to erect a bare shell, and then you do all the internal fit out employing tradesmen where you need to.  You have so  much control over costs, choosing all the materials, seeking out bargains, not paying labour etc.  but you still have the thick end of £100K to shave off so that will be a tall order.

I am expecting my build to come in (not including land) at £1000 per square metre, which these days is considered low.

Buy a static caravan, set it up on your site, and hunker down to a few years of cheap caravan living.

AdrianC

alexasel said:

Doozergirl said:

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

Thanks for your advice. 

We’re not interested in making money from the build but didn’t anticipate it costing more to build than it would be worth on completion.

Have you ever heard of Kevin McCloud...?

Even if you'd stuck to the original build budget, and we all know the chances of that are zero, then surely one of the first things you did were the initial viability sums, comparing the cost of plot + clearance + build + contingency with the predicted end value?

How did they come out?
Where's the reality compared to them?

Or did you just assume that it'd somehow work out OK?

(BTW, how many unexpected pregnancies and window-manufacturer-bankruptcies en route?)

Doozergirl

AdrianC said:

alexasel said:

Doozergirl said:

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

Thanks for your advice. 

We’re not interested in making money from the build but didn’t anticipate it costing more to build than it would be worth on completion.

Have you ever heard of Kevin McCloud...?

(BTW, how many unexpected pregnancies and window-manufacturer-bankruptcies en route?)

It's a simple fact that the unexpected pregnancies only occur when Kevin McCloud is on site.  The rest of us are safe 😉

Rural_Puppy

A few questions.
1. How are you financing the build? How much deposit / what percentage mortgage?
2. What level of service are you buying from heb homes? I believe there are various options ranging from shell only through to completely finished.
3. How will any finance valuation be determined? Presumably by a surveyor when the house is completed? But how will you finance it during the build?
4. Are there any comparable house sales in the area? What were the sold values for those?
5. If you have not already, I would be looking for a mortgage broker.
Best of luck!

Owain_Moneysaver

alexasel said:

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

It will depend on the house type and location. 
If you're building a premium house type, are you in an area where premium house types sell at premium prices? You could simply be building a house that's too expensive for its location. You need to reduce your costs by project management and taking on more work yourself, or choosing a cheaper construction method or lower spec.