Self builders = Wealth-builders
This blog is written by a third-party guest author to help provide additional insight and perspective.
By Tom Bloomfield, Director, Bloomfield Grey Limited – an independent estate agent that works throughout Suffolk and Essex with a particular focus on premium, individual, and self build homes. This guest post is part of a series of blog posts aimed at helping people better understand the benefits and processes involved in self build mortgages and building their own home.
For many, the desire to take on the challenge of building their own home is nurtured years before they actually set about the build.
But whilst a childhood spent playing Lego and hours, as an adult, watching Grand Designs may well be the instigators for the ultimate passion project, there are also good practical reasons to build your own home. This includes having the opportunity to live in a property that may otherwise have been beyond your wallet.
I have met more than my fair share of self builders and I have also been lucky enough to revalue many of the finished homes, which I first encountered merely as patches of ground or knock-over bungalows. It is with the benefit of these experiences that I offer you these practical tips for maximising the financial returns from a self build project:
Trawl the planning portals in your target area – Sites such as Rightmove are a rich source of plots with planning consent, but try searching on your local authority’s planning portal and you may uncover plots before they hit the open market. You will need to be bold enough to approach the owners directly, but you never know what good-value sites you may unearth.
Buy at the right price – Whilst a self builder can theoretically pay more than a developer for a plot (developers normally look to make a 25% to 30% profit and are normally subject to certain levies), it is important not to get carried away.
To assess the real value of a building plot you first need to understand the cost of construction and the value of the end property. Avoid wasting time and losing money by obtaining build quotes and valuations before you submit your offer. Also aim to make a 10% to 15% profit, based on market conditions remaining constant. Remember, time spent in reconnaissance is rarely wasted!
Keep the architecture simple – Architecturally intriguing self build homes are often accompanied by eye-watering build costs, which make them uneconomic.
If your project needs to function as an investment as well as a home, don’t be afraid to build in a conventional style. Not only will you save a fortune on design costs, but you lessen the chances of building a statement house that only a narrow slice of the population could practically live in.
Rein in the tech – The principal drivers of the value of any property are those attributes that cannot easily be changed; with a house’s location, orientation, footprint, appearance, practicality, and energy efficiency all being good examples.
It can be tempting to go even further with the installation of expensive digital technology, but in my experience, gadgets like super high-tech kitchen appliances and hard-wired media rarely add sufficient value. Not only are they subject to taste variations (plenty of people prefer a regular light switch to iPad controlled mood-lighting) but they quickly become out of date and worthless.
A well-executed self build project should not only produce a comfortable home, but should also yield a profit. However, engaging your commercial brain at the same time as your creative side is a challenge, which inevitably involves compromise. If you get the balance right though, then not only will you derive more satisfaction from the project but you will add another string to your bow. I’ve met successful career developers whose first project was their own home.
Guest post supplied by Bloomfield Grey Limited.
Bloomfield Grey has extensive experience in working with self builders to value and market their properties.
By publishing and hosting information from guest authors on the Suffolk Building Society website, this does not constitute an affiliation with, nor a recommendation of, any third party organisation. We recommend that if the content of this article applies to you, or if you require further information on the particular topic it raises, that you seek specialist advice.