Anyone who has ever had work done to their home, no matter how minimal, will tell you that nothing is without problems. I have had extensive renovation work done, particularly on my own house, and there has always been a problem, no matter how simple the job. The problems have ranged from incomplete deliveries, dodgy builders, weather, absenteeism, late deliveries, mistakes, problems with supplies, companies going into liquidation, lost orders to double-booked workforce.

In fact the list is endless. Very few estimated completion dates turn out to be accurate – most building programmes incur some delay, somewhere along the line. So to start self-building work assuming that everything will be plain sailing would be foolish. Expect the worst and then you’ll be surprised when it doesn’t turn out to be as bad as you predicted. The result will be worth it in the end, as long as you try to stay within budget and in control!

Why Do People Chose To Self Build?

It is cheaper – meaning that your house should be worth more when it’s built, assuming it has come in on budget. Most self-build homes work out to be 20% to 30% cheaper than if you had purchased a new house on the same plot. It also means that you can design the house to your own specification, in a location of your choice (subject to the usual planning consents, of course). It means that you can have your dream home – or if you are choosing to build the property and sell it on, then hopefully a worthwhile profit.

Financing A Self Build

You will need to finance your self-build property and have a mortgage agreed, in principle. There are specialist lenders that offer mortgages for homebuilding projects. You will need to refer to the individual lender for details of their stage payment system and terms and conditions. Most mortgage companies will release stage payments in arrears and it is important to discuss what your financial requirements will be during the building construction phases. A few mortgage companies will release stage payments in advance. A mortgage can be anything from 75% to 95% of the building costs and the land costs, but you will need to have some form of planning consent before the mortgage company will release funds on the land.

Using Equity In Your Own Home

You may also be able to use the equity in your own home, in conjunction with any mortgage offer and stage payments offered by the bank or building society. This could mean that your stage payments would be coupled with the existing payments on your home loan, enabling you to stay in your current home until your new property is built.

Deposit

As with most mortgage offers, you will have to come up with a deposit. This can be from the sale of your own home or from savings.

Reclaiming Vat On New Build

If you are constructing a new building, the good news is that you can reclaim the VAT on most materials purchased for the house build. The bad news is that you cannot claim this VAT back until after the house is finished. Contact your local VAT Business Advice Office (see local telephone directory) for claim form and information leaflets.

Vat On Conversions

If you are converting an existing property, you can claim for materials and also for the services of plumber, electrician or any other specialist service provider. VAT registered builders must charge the reduced VAT rate of 9% on labour and materials, as you will be able to claim this back after the property is complete. Details are outlined in the leaflet entitled ‘VAT refunds for do-it-yourself builders and converters’ and is available from your local VAT office.

Vat On Listed Buildings

Approved alterations on listed buildings can carry a zero VAT rating, provided the work has been granted listed building consent and is not a repair or maintenance job. Details are available from Customs and Excise VAT – Buildings and Construction.