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.

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Build Quality

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)

Facing Materials
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.

Roofing Materials
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.

(MORE: How to Build a Home on a Sloping Site)

Bespoke Joinery/Kitchen
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.

Ceiling Heights
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).

For instance:

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.

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