About Self Building and Self Build Mortgages
Self building is not for the faint-hearted. Building your own home is one of the most stressful projects many people will ever attempt, but it's also one of the most rewarding.

And with lenders becoming more and more welcoming to anyone wanting to build, renovate or extend their own home, financing a self build project has never been easier.

You can now borrow up to 95% of land and building costs, receive payments before each stage of the project commences to help your cashflow and you can stay in your own home until your new one is ready to be moved into.

In this section, we look at the features of the modern self build mortgage and factors you need to consider for your project.

Buying Your Land
If you require finance to purchase your land or renovation property, you will be able to borrow up to 95 per cent of the purchase price. All lenders require the plot to have at least current outline planning permission, and many insist that detailed planning permission and building regulations approval has also been given.

If you are planning to renovate a rundown building, lenders may deem your project to be high-risk. However, we have access to a number of mortgage providers who specialise in funding conversion or ecological building projects, so this need not be a deterent.

Advanced Staged Payments
Funding for self build mortgages is arranged in staged payments. Prior to each stage of the build, the lender will release 95% of the estimated cost of that stage to fund the purchase of labour and materials. We'll help you to decide on the staging arrangement which is best for you and schedule your mortgage payments accordingly.

As with standard house mortgages, the maximum sum a lender is prepared to advance you is based on your ability to repay. This is worked out on multiples of the income of the people who will repay the loan.

Applying For A Self-Build Mortgage
Self build mortgage providers base their decision to lend on a variety of factors related to the project and you.

This includes:
1) A copy of the detailed specification of the building.
2) Copies of site and dwelling plans as approved by the local authority.
3) A copy of planning permission approval with at least 18-24 months to run.
4) A copy of current building regulations approval.
5) A detailed costings sheet for the project.
6) A build timetable with a completion date no more than six to 12 months from the date of offer.
7) If you are using a builder, confirmation that they have the necessary insurance.
8) Details of your structural warranty scheme. If an architect or building surveyor are issuing progress certificates, a copy of their professional indemnity insurance policy will be required.

Building Costs
Every self build project is as unique as the self builder and this makes it impossible to give reliable, generalised figures on how much a project will cost. When calculating your budget, you will need to consider the following points:-

1) Purchase price of land.
Buying a plot will be your first major expense. Local estate agents and land-finding specialists, like Plotsearch, can give you an idea of plot prices. Budget to spend around one-third of your money on the land and two-thirds on the build itself.
2) Professional service fees.
A solicitor will be required to handle the purchase and carry out searches and stamp duty is also payable on the purchase price of the land. You'll need a soil survey and, if your site is sloping and drainage could be a problem, then a land survey is also necessary. If you are converting an existing property, a structural survey is an absolute must.
3) Planning Permission.
Before building you will need detailed planning permission and building regulations approval and this will require a detailed set of house plans. Many selfbuilders choose to have these drawn up by an architect, architectural technician or building surveyor.
When submitting your planning application you will have to pay a statuary fee to the council, along with a separate fee for making a building regulations application. If obtaining detailed planning permission is a problem, then enlisting the help of a planning consultant is certainly worthwhile.
4) Re-housing costs.
These days, there is no need to sell your home to fund your project, but if you choose to you will need to consider the cost of renting a property or hiring a mobile home. Furniture storage costs also need to be considered.
5) Insurance costs.
You will need site insurance once you have purchased your land and a structural warranty to protect your pockets against unforeseen problems both during the build and after its completion.
6) Build costs.
Building and labour costs will depend on the size of house, choice of materials and whether you use an architect to oversee the build or manage it yourself. An architect, building surveyor, quantity surveyor or main contractor will be able to calculate a budget based on a price per square foot. If you are building in timber frame, then your supplier will usually offer this service.
Construction costs also include connection to services - electricity, gas, water, drainage, telephone and highways. You should contact each utility supplier for quotes in advance of buying your plot.
7) Contingency allowance.
No matter how meticulously you plan, there are always unexpected costs. You should set aside at least ten per cent of your budget to allow for the unexpected.

Once you've worked all this out, you'll know how much money you'll need to borrow. This is the time to contact us to arrange your tailor made mortgage.

VAT and the Self Builder
VAT is added on to the cost of building materials and labour but can be reclaimed providing your house is intended for your own occupation. You will not be able to reclaim VAT on any professional services, such as those provided by architects or solicitors. For a full list of claimable items contact your local Custom and Excise office.
With conversion projects, you will only be able to claim VAT if the previous use of the building was non-residential, such as a barn. Renovation projects are not zero rated, so you won't be able to reclaim VAT.
VAT must be reclaimed no later than three months after you have received a completion certificate from the Building Control Officer. Make sure you claim includes everything, you will not get a chance to reclaim anything further. If you want to include decoration costs, buy your materials as soon as possible and then claim to stay within the three month deadline.

Site Insurance
Site insurance is made up of three elements:
- Public Liability,
- Employers Liability,
- Contractors All Risk.
Public Liability covers you for people visiting your site, lawfully or not, or anyone outside your site such as a neighbour, who suffers loss or injury.
Employers Liability covers you for any claim made against you by someone working on site.
Contractors All Risk covers you for problems associated with theft, vandalism and storm, flood and fire damage.

If you plan to either manage subcontracters or carry out some of the work yourself, a site insurance policy is absolutely essential. You are responsible for the heath and safety of others, and it is essential that Health and Safety legislation is followed to avoid the risk of invalidating your site insurance policy. Many site insurance policies provide no cover for your own injury, so take out a separate policy to cover personal accident.

As business partners of site insurance specialists Project Builder, we can help you arrange site insurance to suit your needs.

Structural Warranties
Structural warranties cover you against defects in the structure of a newly built or converted house. The National House Building Council (NHBC) has a Buildmark warranty scheme that gives a 10 year structural warranty to those who use a NHBC registered builder. If you plan to either manage subcontracters or carry out some of the work yourself, you'll need a structural warranty. Your bank or building society will ask to see evidence of an approved structural warranty scheme in force on any home that is under 10 years old. Even if you do not need a mortgage, it is as well to ensure you are protected by a structural warranty.

In conjunction with structural warranty specialists, Project Builder, we can help you arrange cover for your self build.

And finally...........money saving tips
- Stay in your own house during the build to save on alternative accommodation.
- Save 15% on building materials by buying them yourself. Subcontractors will mark up the cost of any materiels they supply.
- Negotiate fixed price contracts. Foundations in particular are hard to budget for.
- Drawing up an detailed budget and stick to it.
- Buy all materials on which VAT can be reclaimed before the three month deadline for reclaimimg VAT. Think about decorating costs and landscaping, even if you don't plan to do these straight away.
- Buying equipment rather than hiring. You can sell it once you have finished with it - sometimes for the same price as you bought it for.
- Open an account with several builders merchants to ensure you get the best deals. On-line suppliers are very competitive and you can easily compare their prices.

Good luck with your project and don't forget, we specialise in sourcing self build mortgages tailored to your specific requirements. And through our alliance with Project Builder, we can take care of your site insurance and structural warranties needs as well. For more information or to apply for a decision in principle just complete our short enquiry form or e-mail us now !