A detailed budget plan will help you to assess the overall financial feasibility of your project, comparing total costs with your home’s end value — something many lenders, especially the banks, will want to see before they will release any funds.
There are many factors that determine the cost of building your own home, from how much work you do yourself, to the level of professional involvement from an architect or project manager; from the shape, size and height of your design, to the quality of the fixtures and fittings you choose. Even the region you live in affects build costs because labour prices vary across the UK. This guide will equip you with an understanding of all of the factors, enabling you to plan your self-build project and weigh up your options to get the very best out of your available budget.
How Does Build Quality Affect My Costs?
The quality of the specification affects only certain aspects of the total budget.
Costs are calculated for three levels of build quality — standard, good and excellent. Standard is the minimum level of specification typical of most new build developments, good is the level of the average self-build home and excellent – whilst by no means an upper limit – is typical of a top-end build. Quality has the largest effect on the cost of fittings and finishes – most notably the kitchen – and external materials but not on the ‘nuts and bolts’ such as foundations. Please note, figures quoted are based on an average from our build costs tables and will vary according to region.
Where Does the Money Go?
This is the breakdown of a build budget for the average house.
Seeing where the money goes in your build helps to put certain decisions into context. For example, the relatively significant proportion of typical expenditure that goes on sanitary fittings sits uneasily against less than half of it spent on a typical heating system. The entire cost of the exterior, including chimneys, external doors and windows, represents only 50% of the total costs with the balance going on internal trades, fixtures and finishes. Figures include labour and material prices.
So What Will My Project Cost?
Here’s how to assess your future costs and understand how they are affected.
The H&R Average Build Cost Guide shows the average cost per square metre for building new one-off houses across the UK. These average figures are calculated from real project costs recorded by the Royal Institute of Chartered Surveyors’ Building Cost Information Service, and are based on gross internal floor area (the inside of the external walls).
Figures are shown for three different levels of quality, from standard to excellent, and for three sizes of house, to allow for the economies of scale achieved on larger projects. By adjusting these average figures to suit the characteristics of your individual project, you will get a good indication of how much it will cost to build your home in today’s market. First you will need to work out the total internal floor area of your proposed plans using a scale ruler (or ask your designer to work this out for you). To work out the build cost you need to find the relevant cost per square metre for your project from the table, and multiply this by your total floor area. Finally you need to adjust the total by following the notes on these pages.
What Can I Afford to Build?
If you don’t have any plans yet, but just want to work out how large a house you could afford to build, start by getting an idea of your total available budget. Talk to self-build lenders (you can find these in the H&R Directory) and find out how much you could borrow, then add to this any savings you have and any equity you can release by remortgaging or selling your current home.
Next visit plotfinder.net to get an idea of typical plot prices in your area. Take away the cost of a plot from your total budget, allowing for legal fees and Stamp Duty (1% on plots over £150k, 3% on plots over £250k and 4% over £500k) and a £6,000 allowance for connecting to services such as electricity and water. The remaining balance is roughly how much you will have to build the house, including design fees and any fees for project management. You can use this figure to work out how large a house you can afford by dividing it by the average build cost per internal square metre for your area and your chosen level of build quality.
How Your Own Level of Involvement Affects Costs Project Management
Project Management The Build Cost Table shows costs for four different build routes, ranging from using a main contractor, to running the build yourself, co-ordinating the different trades, supplying materials, plant, scaffold, and statutory inspections as required. As a general rule, the more you take on yourself, the lower your costs will be. Managing the build and doing some of the work yourself can reduce average costs by 15% depending on how efficiently you manage the build.
DIY Labour If you decide to substitute some or all of the labour costs with your own labour (you can undertake every aspect of the building work with the exception of connecting gas appliances for which you must use a CORGI-registered contractor) you can reduce the average build costs very substantially. Approximately 50-60% of the total build cost is labour, so if you do all of the work you are allowed to you could reduce the costs further than the table suggests. In practice most DIY self-builders leave the groundworks, brickwork, plastering, first fix carpentry, plumbing and electrics to the professionals and take on the internal second fix trades such as laying floors, fitting kitchens and bathrooms, hanging doors, fitting skirting and architraves, boxing-in, decorating, tiling, landscaping, and connecting sockets and light fittings.
Design Fees The build cost figures do not include design fees, planning fees (currently £335 for a new dwelling) engineer’s fees or Building Regulations fees. Make sure you have allowed for this in your budget, together with any fees for finance or insurance.
Supervising Professional On larger projects a professional such as an architect, surveyor or engineer is usually retained to put the project out to tender, appoint the builder, and administer the contract through to completion. If this is the case you will need to add an allowance for fees at 5-10% of the total contract value (construction cost).
How Size Impacts on Cost
As the size of your intended home grows, the fixed costs tend to become less important to the overall budget.
A general rule is that, if other factors are kept constant, costs per square metre decrease as the house design increases in size, indicating that there are economies of scale in housebuilding. This is largely because the cost of building more volume does not require a proportional increase in labour and materials, and generally requires the same number of doors, sockets and switches, etc. The rate of decrease slows, however, as the building gets larger and starts to require nonstandard structural elements for extra-wide floorplans and openings.
Some Things To Consider
Building on a sloping site will increase your build costs because of the work involved. As a general rule, each 5° of slope from level on the site will increase your build costs by £5,000 (Brinkley’s Slope Law proposed by Mark Brinkley, author and H&R Contributing Editor).
Plan, Shape and Layout
The vertical elements such as walls, windows, doors and wall finishes are affected not only by the area of the building but also by its shape. A square building, for example, is more economical in its use of external walls than an oblong building of the same area. The cost/m² of gross floor area for external walling elements decreases as the wall/floor ratio decreases.
Using the roof space to create an additional attic storey is a popular way to add more living space. There are some additional costs involved: staircase, attic trusses or a traditional cut roof, increased roof pitch, and, in the case of a three storey dwelling, the addition of fire doors to create an enclosed 30-minute fire-resistant stairwell as an escape route. Using the existing volume in the roof is still cost-effective, at around 70% of the average cost/m² of the ground or first floors.
Originally published November 2008