Building Plot Valuations
Building plots are usually valued by estate agents. They do this by working out how much they think a nicely finished house would be worth on the site in question, then subtract how much they think it would cost to build that new home.
Not all plots come with profit built into the asking price. They will sell for what the market will bear, which may have little to do with ‘residual value calculations’.
Tip: Always look at building opportunities with a developer’s eye. Added costs (such as clearing the site or coping with an awkward plot) can be identified early on by a visual inspection and a look at planning conditions.
While you might have trouble attaching a specific cost to them at an early stage, common sense will tell you if they are likely to be significant. Bear this in mind when you bid for a site — some are inherently easier to develop than others.
Choosing a Build Route
Your level of involvement in the project will influence the build costs. For simplicity, the four most common build routes have been identified below.
Build Route A: DIY: Building on a largely DIY basis, substituting around 30% of labour costs with DIY, and employing help with the rest of the building work. Materials purchased directly.
Build Route B: Self Managed/Subcontractors: Building using tradespeople hired directly. Minimal DIY involvement. Most materials purchased directly.
Build Route C: Main Contractor and Subcontractors: Building using a main contractor or package supplier to complete the structure to a weathertight stage, with the remaining work being undertaken by subcontractors with most materials purchased by self builder direct from suppliers.
Build Route D: Main Contractor: Building using a main contractor. Building in this way requires the least involvement from the self builder.
The standard of specification that you choose will have an enormous influence on your build cost, but most self builders costs range between £300/m² and £3,000/m². For estimating purposes, three general categories of quality have been identified:
Standard: This represents a basic build quality equivalent to that offered by most speculative developers.
- Cavity walls: facing bricks (£250/1,000 or £45/m² laid), insulation, and 100mm blockwork;
- concrete interlocking tiles (£28/m² laid);
- standard softwood joinery;
- studwork partitions;
- contract kitchen;
- basic sanitaryware;
- radiator central heating.
Good: This is equivalent to that offered by quality developers.
- Cavity walls: facing bricks (£450/1,000 or £56/m² laid), insulation, and 100mm blockwork;
- clay machine-made tiles (£36/m² laid);
- high-end off-the-shelf softwood joinery;
- blockwork partition walls;
- top-of-the-range contract quality kitchen;
- quality sanitaryware;
- underfloor heating downstairs.
Excellent: A very high standard.
- Cavity walls: bricks (£650/1,000 or £67/m² laid), insulation, and 100mm blockwork;
- plain clay tiles (£45/m² laid);
- hardwood joinery;
- blockwork partitions;
- bespoke kitchen;
- quality sanitaryware;
- underfloor heating.
How to Adjust Your Build Cost Calculation
Having found your rate (£/m²) make any adjustment for quality or unusual materials that may be necessary (see below) and then multiply the adjusted £/m² by the gross internal floor area of your design to calculate a build cost estimate.
Using Roof Space
Using roof space to provide accommodation is less expensive than adding a full extra storey. For estimating purposes, calculate the cost separately by multiplying the additional useable gross floor area by 70% of the average £/m² for the house.
(MORE: Loft Conversion Beginner’s Guide)
For estimating purposes, treat basements as above-ground space and include them as part of your measurement of gross internal floor area.
(MORE: Basement Conversion Guide)
Alternative facing materials will have a direct influence on overall build costs. To adjust for this you need to add or subtract an allowance/m² for your chosen wall cladding from the sum allowed for cladding within your chosen specification.
- For render on blockwork allow £25/m²;
- for timber cladding allow £25/m²;
- for handmade weather tiling allow £54/m²;
- for rubble walling/flint allow £90/m²;
- for reconstituted stone allow £48/m²;
- for natural stone allow £75/m².
Alternative materials will affect your overall build costs. To adjust for this, add or subtract an allowance/m² for your material from the figure allowed in your chosen level of Build Quality (e.g. £28/m², £36/m² or £45/m²).
- For new Welsh slate allow £60/m²;
- for second-hand slates allow £35/m²;
- for handmade clay tiles allow £65/m²;
- for reed thatch allow £80/m².
Sloping Sites: For estimating purposes, allow an additional £10/m² for every degree of slope.
To adjust for bespoke handmade windows and doors, or a kitchen, add the quote (excl VAT) to your estimated build cost, less the allowance of £40/m² already in the costs.
For every 0.1m of additional ceiling height (on top of the standard 2.4m) add 1% to your £/m².
Garages and Outbuildings
Although an integral garage is unlikely to be completed to the same standard of finish as the rest of the property, for these purposes include integral garages within your measurements of the living area.
Don’t Forget the Extra Fees
Legal Fees: £500-1,000
Stamp Duty and Land Tax: The tax is currently levied at 1% for land or house purchases valued from £125,001 to £250,000, 3% for plots valued from £250,001 to £500,000 and 4% over £500,000
Topographical Site Survey: Typical cost £350-500
Design Fees: Architects charge 7-15% of the total build cost for a service involving design and supervision. For planning drawings from other sources expect to pay from £2,500-3,500, plus a similar figure for Building Regulations drawings
Structural Engineers’ Fees: £400-500
Planning Application Fees: £335
Building Regulations Fees: £500-1,000
Warranty: Around 1% of contract value
Self-build Insurance: £500-800
Services: Typically £3,500-6,000 total
Demolition Costs: Typically £5,000-10,000
External Works: Around 15%?of total build cost
Raw Cost vs Quoted Costs
In working up a budget, it is conventional to split a job into a series of cost centres and to work out the material costs and time required to complete each task. A rate of pay is then applied to the tradesmen undertaking the task (unless you do it yourself which is where massive cost savings can be made).
If you have 10 internal doors to hang…
- Door = £150 each
- Door furniture and accessories = £50
- Time to hang = 4 hours per door
- Joiner = £25/hr
- Each door = £300 (£200 material, £100 labour)
- Total: £3,000
However, these are what we call raw build costs. It assumes that the doors will be there in place, on time, ready for handing and that the joiner has other work to do around the task, rather than driving 60 miles specifically for it. It also assumes that packaging and waste is disposed of, that the site is secured before and after, and that the work is checked and snagged if necessary.
In other words, there are lots of overheads and ancillary costs that need to be added to raw build costs in order to make them realistic. It is therefore reasonable for a builder to add 25–50% to these raw costs to cover the running of the site.
FAQs about Build Cost
How does Homebuilding & Renovating come up with the build cost figures?
We established basis figures, based on a survey of all the case studies that appeared in the magazine, adjusted for our own experiences and knowledge. These base figures are then updated monthly using the Rebuilding Cost Guide indices published by the Building Cost Information Service.
How do I measure my intended new house?
Gross internal floor area is the measure we use (the industry standard). It’s the area measured to the internal face of each external wall for each floor level, including areas occupied by internal walls.
What do the build cost figures include?
The cost per square metre figure allows for a finished home, including kitchens and bathrooms but not including external landscaping.
Do the figures include VAT?
As VAT is zero-rated for new builds (i.e. not payable), the figures do not account for it.
I’m renovating. Are these figures relevant?
Not really. They provide some guidance for major extensions which would include most of the key elements you would find in a new house (e.g. kitchens and bathrooms) but as they are usually relatively small and specific to a few rooms, they tend not to be relevant to these figures. Renovation costs depend very much on the extent of the work itself (e.g. some renovators will rewire, others not) and as a result it is impossible to generalise.