Notes so far for Self-Build Funding
Make sure you have a water tight plan to make sure you don’t run out of cash flow – so you don’t run out of cash mid project. Lending is given throughout the build stages
Typically, the funds are released over 6 stages from purchasing the land to 2nd fix / completion.
Make sure each you have enough cash for each stage of project i.e. financing and managing your money is essential for you to reach the next build stage.
Contingency plans are paramount with having at least 10% of overall build cost as a minimum to keep your project running smoothly – making sure you include Architecture Costs i.e. building regulations, planning cost etc.
Biggest advantage of doing self-build is that you can claim back the VAT at the end, however, it is your responsibility to keep all receipts safe as you can only claim vat once on each project, so do your best to claim at the very end of the project.
If you buy a barn with infrastructure in place, you may save a lot of costs by not having to do foundations which can incurred high costs. Barns already in place, may come with restrictions, so this will need to be kept in mind.
The more research with planning officers and local builders who can help with ideas for your projects, may be able to narrow down your unrealistic expectations.
Self b mortgages can only be obtained by going through a reputable broker like Build Store who seem to be one of the most popular on the market. They will have special rates to offer and have special links to banks and BS, as if you were to go direct to any high-street lender they may see you as too much of a risk and won’t lend. You still have the choice of leading lenders with competitive rates.
Stamp Duty is only paid on the price of the land purchase, not the final value of the final product.
Do not need a high value in saving as you can borrow up to 90% of the land cost. Your IFA will advise on the best product for your project.
Build Store Accelerator Mortgage will lend on land that has only outline planning permission. Most lenders will only lend on detailed planning permission which can take many months. This will allow you to move quickly and secure your ideal plot.
13% of all new houses built in 2016 were self builds and is expected to increase year on year.
Self-build allows you to manage the project from start to finish.
Best way to buy land is outright.
Stage payments will put you in a stronger position of negotiating when buying materials and labour reducing the risk of workmen leaving half way through a project due to non-payment of wages. (this also saves the risk of overspend)
You also get to stay of the current family home during the build of your new home (situation dependant)