Budgeting For Your Self Build Project
Budgeting can make or break a project. The more accurate your estimates, and calculations, the more likely you will build your dream home without any crippling over spends.
Things to keep in mind: a contingency of 15–20% will act as a cushion against unexpected costs. Most people suggest a 10% contingency, although we at Mayflower are now seeing lenders asking for a minimum of 15%-20%. On a flat site where the ground conditions are known this is reasonable given the currnet market. For a sloping site or one where you’re not sure what may lie below we’d suggest up to 25%. A very rough guide is that one degree of slope costs an extra £1,250, so a 45% degree slope may give you fantastic views, and easier drainage, but may cost an extra £56,250 in groundworks. The exact amount depends on a number of relevant factors, including ground stability, the water table, and whether the spoil has to be taken to landfill. Groundworks are normally the part of building a house which is the most difficult to cost accurately in advance.
Changing your mind about the layout or specification of your home as you go can dramatically increase the costs. So work out exactly what you want before you start on site, and then stick to it. The more time you spend planning in advance; the more likely you are to keep to your budget.
On a new house you will probably be eligible for a fair sized VAT refund – typically our clients can reclaim about £20,000-£30,000 on the cost of the building materials you use. But you have to pay the VAT out before you can reclaim it, you have to keep good records, you have to reclaim the VAT within three months of completion and also take into account the cash flow consideration of paying VAT upfront , that could later be re-claimed. About a third of all self builders fail to do this, so they miss out of a big tax refund.
Top Tips For Stretching Your Self-Build Budget
Comparing costs and negotiating. A good negotiator will compare different prices from materials suppliers, professional consultants and trades people and haggle to get the best possible deal. On a big project this could save you £50,000-100,000.
Project manage. Being your own project manager for the construction work could save you money, provided you know what you are doing – but don’t underestimate the time you will need to do this.
Get stuck in. You may be able to learn relevant building skills and do some of the physical construction work. Or enlist skilled colleagues or friends or family to help you.
Plan properly. Don’t be in a hurry in the early stages – remember, time spent planning and working out every detail up front will pay dividends later on.
Check your spec. Avoid a high-end specification – you could spend £300 on a bathroom suite, or £30,000.
Rationalise your design. Opt for a simple design – for example a basic rectangular building will usually be cheaper to build than one that has a more complex footprint or multiple rooflines. The choice of the basic method of construction you use can be significant too – for example basic timber framed homes can be about 10% cheaper than brick and block homes.
Safe storage. Secure, waterproof storage on site will enable you to buy cheaply in advance, and keep materials and tools safe for when they are needed.
Communicate! Any changes to the plans must be communicated with the relevant contractors. At the very least, stick a dated copy of the latest amended plans to an inside wall, so contractors know about the wall you’ve moved, or the extra sockets you realised you needed..
Our average clients build cost per M2 in 2022 was just over £2,000
If you need help costing your project we now offer this for free as part of our Self build Savers Solution.
Factors Affecting Self Build Costs
Build Method
Most build cost calculators work on traditional masonry or timber frame build costs. If you are interested in a specialist build method you should contact specialist companies for estimates. Have a look at the house construction methods options that are available to you by requesting free Self build encyclopedia ebook.
Geographical Location
Variations in material, labour and equipment prices affect the total build cost. As you’d expect, London is the most expensive area, followed by the South East. The Midlands, Yorkshire, Wales and the North East are the cheapest.
Build Route
The more you do, the more you save. Employing a package company increases the price but reduces the stress.
Size
Economies of scale apply. Pound per square meter build costs reduce as the size of the property increases in most cases. Each additional floor becomes more cost effective than the last.
Materials and Design
Your choice of materials and bespoke design items will have a considerable influence on the cost of building a house.
Build Quality
Better quality = more expensive.
Site Conditions
Contaminated ground, a steep slope or a location in the back of beyond can all wreak havoc with your budget. The actual impact on your build costs are often difficult to predict.
Garages and Outbuildings
Garages and outbuildings must be accounted for. It is usually recommended to budget the same £/m2 for garages as for the main house.
Landscaping
One of the main areas we see people under cost is the landscaping!