How much does it cost to build a house? | The Sun

HOUSE prices are falling after mortgage rates rose dramatically putting buyers off coming to the market.

Property prices surged last year due to pent-up demand following Covid-19, a lack of homes on the market driving demand up and the end of the stamp duty holiday.

But at the start of December, Rightmove reported that the average asking price for a home dropped to £359,137 – down by £7,862 from the previous month.

Even so, rising mortgage rates and the cost of living soaring mean people will be looking for different and cheaper ways to get onto the property market.

It comes as four million mortgage holders are set to see their monthly payments jump by the end of the next year.

You could save some cash by taking on the ultimate DIY project and building your own home.

Read more in Money

Thousands of energy customers to get compensation – check if you’re one of them

I’m a heating expert – four boiler tips that could slash your energy bills

But you should make sure you factor in the hard graft and extra fees involved in the process.

We explain everything you need to know.

How much does it cost to build a house?

It's estimated that the building costs are between £1,800 and £3,000 per square meter.

The average UK property (a three-bedroom house) measures 800sq ft or 74sq meters, a self-build will cost between £133,000 and £222,000.

Most read in Money


Thousands of energy customers to get compensation – check if you're one of them


Households can claim up to £500 for food and fuel this Christmas – how to apply


The 286 locations getting double cold weather payments – are you eligible?


Warning issued as final deadline for Christmas post brought forward

You should put aside an extra 15% to pay for engineers, architects and any other professionals needed.

You should also consider putting an extra 10% on top of that to cover any unforeseen costs.

Self-builders should also take into account fees which include planning applications, lawyers, demolition and self-build insurance.

A planning application will be £462 if it is approved immediately, but can run into thousands if there are appeals or council pushback.

Site surveys and reports from structural engineers can be £500 a pop, while self-build insurance is approximately 1% of total costs.

The final bill for demolishing or clearing the site can run into the thousands.

To purchase somewhere to build, you must pay Stamp Duty Land Tax on land worth over a certain price.

In England or Northern Ireland, the current threshold for residential land tax is £250,000.

You also need to consider construction costs.

The superstructure – which includes the roof, roof beams, walls and external cladding – usually takes up 30% of the budget.

Timber frames rather than the cheaper brick and block can cost 50%.

Foundations and flooring will make up most of the remaining 70%.

On average, the roof and kitchen will cost between £5,000 and £6,000 each.

An ensuite bathroom can cost about £1,500 but if you upgrade any fittings or have anything higher spec it could be £6,000.

Wiring can also cost between £3,000 to £5,000 depending on the size of the house.

Is it cheaper to buy or build a new home?

Building your own home can be much cheaper than buying an existing house.

If you do the work yourself, you can lower costs by up to 40%.

But even hiring builders to do most of the work can save money, while project managing the build can also significantly cut costs.

You pay less Stamp Duty because you are taxed on the value of the land, not the completed property.

This can be worth 20% more than the costs of the land and construction.

You can also claim back the 20% VAT charged on some of the materials.

However, mortgage costs will be higher. Some two-year fixed and variable rate deals start around 5%.

In Wales, you can get loans worth up to £400,000 to help cover the cost of building your own home under the Self Build Wales scheme.

What is the cheapest type of house to build?

Smaller will of course be cheaper, but even small will be bigger compared to buying one pre-built.

A self-built house of 150sq metres would still be larger than an average 100sq metre, four-bed house from a developer.

To maximise space, especially on a modest plot, it’s best to build a house rather than a bungalow unless you really need just one floor for mobility reasons.

A bungalow has the same foundation, roof and first-floor wall costs, but you get a much smaller property.

A simple design like a Georgian-style box house will limit the need for expensive architects.

You can also save thousands of pounds by opting for blockwork walls, an attached garage and a simple heating system.

Following these principles, you could build your own for less than £150,000 – a fraction of the cost of buying one for sale.

Can you get a mortgage to build a house?

Yes, you can get a self-build mortgage.

However, it does work differently as the lenders' main security, a house that they could repossess, doesn't exist.

Therefore, if the lender released all the money at once they would be at risk.

Instead, self-build mortgages release the money in instalments. The instalments fund each phase of the construction.

With some self-build mortgages, the money will be released in advance, i.e. the money towards the foundations is released before the foundations are laid.

Or, the money can be released in arrears, therefore you pay for the construction from your own pocket but can claim the money back when the next instalments are paid out.

UK house prices have soared with four mortgage lenders stopping processing applications.

Read More on The Sun

Kate & William share new Christmas card photo of them holding hands with kids

The easy 1p trick to keep your bed warm when the heating is off at night

Zoopla has also revealed the most popular place to buy a property in the UK. Can you guess where it is?

And this family are saving thousands on their first home with an easy mortgage trick. Here's how you can too.

Source: Read Full Article