Self Build Or Sell A Plot

lakesuk

Hello people,

I just had some questions as a complete newbie, with some background.  I would appreciate any advice anyone can offer.

We are currently thinking of selling our home to move to somewhere larger, we are based in Cumbria.  Whilst chatting it through with friends someone suggested that the side of our house (where there is some land) might actually be able to accommodate another house.

Long story short, we are now in a situation where we have our house (3 bed semi) and a plot next to it with outline planning for building a 4 bedroomed detached house.  

The valuation on the plot is coming in around £120k to £150k.  A 4 bed detached house on the plot would probably go for around £350k to £400k, which means we have a margin of around £200k - £250k.

So to those experienced.... if you could sell a plot of land for £150k, or go through the process of building a house (and all the hassle that comes with it), and making an extra £50k to £100k, what would you do.  Also bearing in mind we have young children, and very busy lives.

Any advice or other options we might not have thought about appreciated, as there might be ideas that are totally off our radar.

Thank you all.

lincroft1710

How will you finance the house build?

lakesuk

If we decided to build we would be using savings.

seradane

I'd be skeptical you could build a 4-bed house for £150k.

I'd suggest going to a contractor to get them to give you an estimate on build costs for what you've got outline planning for.

That will probably make your decision pretty easy.

Edit: I'm assuming you are looking just for the most profitable approach to this, and you're not contemplating building the house for yourselves to move into. If you're wanting to self-build so you can tailor the house to suit your family, then that's a different question altogether and involves more than just whether the funds stack up.

lakesuk

seradane said:

I'd be skeptical you could build a 4-bed house for £150k.

I'd suggest going to a contractor to get them to give you an estimate on build costs for what you've got outline planning for.

That will probably make your decision pretty easy.

Yeah we have had an indicative quotation for a timber frame build / contractor, and are comfortable that our profit would lie somewhere between £50 and £100k more than simply selling the plot on its own.

The question was more on the basis of any other alternative approaches that we might not have considered.

ProDave

Hi I am speaking as a "serial self builder" having just finished  building our second house.

Personally I would build on the plot yourself.  What self building allows you to do is build a house exactly what you want and (for me) more importantly you can build it to a decent standard and get a really well insulated really well detailed house, far better than any "developer box" you would be likely to buy of you moved. 

As to cost, I completed our present house for £1000 per square metre.  You won't do that now with the way materials costs are increasing, £2000 per square metre might be more realistic now.

If you want more help and to discuss the options in more detail seek out and register at the BuildHub self build forum.

oz0707

If you sell the plot I think its cgt free, if you build and sell straight away you'll pay tax. Unless you can get a turnkey package with your figures and minimal stress then I'd sell the plot. 

lakesuk

ProDave said:

Hi I am speaking as a "serial self builder" having just finished  building our second house.

Personally I would build on the plot yourself.  What self building allows you to do is build a house exactly what you want and (for me) more importantly you can build it to a decent standard and get a really well insulated really well detailed house, far better than any "developer box" you would be likely to buy of you moved. 

As to cost, I completed our present house for £1000 per square metre.  You won't do that now with the way materials costs are increasing, £2000 per square metre might be more realistic now.

If you want more help and to discuss the options in more detail seek out and register at the BuildHub self build forum.

Thanks for taking the time to reply. Just to clarify, there is no scenario we would live in the house we build. Having enjoyed the outside space for the past 12 years, we wouldn't want to stay on the same plot but halved in size.

I will take a look at BuildHub, thank you.

lakesuk

oz0707 said:

If you sell the plot I think its cgt free, if you build and sell straight away you'll pay tax. Unless you can get a turnkey package with your figures and minimal stress then I'd sell the plot. 

Thank you.  Yes looking at the rising costs of building materials at the moment, the stress and time...I think just selling the plot is going to be the way forward.

ProDave

lakesuk said:

ProDave said:

Hi I am speaking as a "serial self builder" having just finished  building our second house.

Personally I would build on the plot yourself.  What self building allows you to do is build a house exactly what you want and (for me) more importantly you can build it to a decent standard and get a really well insulated really well detailed house, far better than any "developer box" you would be likely to buy of you moved. 

As to cost, I completed our present house for £1000 per square metre.  You won't do that now with the way materials costs are increasing, £2000 per square metre might be more realistic now.

If you want more help and to discuss the options in more detail seek out and register at the BuildHub self build forum.

Thanks for taking the time to reply. Just to clarify, there is no scenario we would live in the house we build. Having enjoyed the outside space for the past 12 years, we wouldn't want to stay on the same plot but halved in size.

I will take a look at BuildHub, thank you.

Then probably selling the plot is your best choice.

Building to sell as an individual raises lots of financial issues.  One of those is a self builder can reclaim the VAT they have paid for all the materials at the end of the build. BUT that is only possible if you certify that you are going to live in the house as your main residence.

To build to sell you would have to set up a VAT registered company to do that.

Do take the time to think of the benefits of self building.  We are now living in a very well built house, exactly to our needs, built to be very energy efficient so has very low heating costs, which going forwards is going to become more important.  If we wanted to move again, it would be hard, probably impossible to find another house as good as this one.  So before you dismiss this option (and pass it on to someone else) make sure it is the right choice for you.

Best of luck whatever you choose, you are lucky to have that choice to make.

theoretica

If you did not own the plot but spotted one for sale with similar potential would it even cross your mind to buy it, build a house and then sell it?

Personally, I would rather not live next to a building site, and don't feel skills in managing a building project are something I would enjoy acquiring.