From green fields.......to castles in the air: building your own home
Around a staggering 20,000 people build their own homes in the UK every year! It appears a mammoth task, the project is almost certain to be fraught with complications and the risk of financial ruin is a very scary prospect, and yet more and more people are building their own dream home.
Building your own property comes with a considerable degree of risk and self-build mortgages can help with financial complications. The main difference to a regular house purchase mortgage is that money is released in stages as the build progresses rather than as a single amount. Self-build lenders tend to use the same income multiples as for regular mortgages, and the amount you can borrow will depend on your ability to repay the loan as well as the size of the deposit. Most lenders offer loan to value ratios of around 75% but it is still possible to get up to 85%. Lenders will want to see the property plans and projected building costs, as well as appropriate planning permission and consent for the size and type of building.
Building projects go over budgets for all kinds of reasons – unforeseen problems, works running over-schedule and even bad weather. So it is crucial to plan your budget very carefully, try and cover every possible eventuality and keep a contingency fund in reserve should any unexpected costs arise. Your mortgage lender will want to know the total cost of the project and to see that you have covered all costs such as the purchase of the land, professional fees, building works and materials.
Take a realistic view and be aware of your own limitations with regard to the project. If you decide to manage the project yourself and then find you cannot, you will have to employ a professional – which could well blow your budget right out of the water. You'll be working against the clock and have to repay the mortgage – whatever the outcome of the project, so avoid cutting corners, particularly with trades-people. Hire the best you can afford as this will reduce the risk of falling behind in schedule and will get you competent professionals. Every mistake which occurs will surely cost you money, so get the best help you can.
Remember also, site insurance is of fundamental importance when investing your money - and you will need to insure against fire, theft, flood, storm damage, vandalism and accidental damage. There are many threads to the type of insurance you will need, but look out for a policy which will insure the land from the moment you buy it, as well as covering building works, temporary works and materials, own and hired plant, tools and equipment, employees tools and personal effects, employers liability, legal expenses, personal possessions, personal accident and broken bones. If you are living on-site think about residential caravan and contents, site huts and temporary buildings insurance also.
To avoid complications, talk to an expert. Contact Westhill Insurance Services today. Taking professional advice and guidance at the time of planning your new build will remove much of the stress and worry, allowing you to watch your project progress from a green field to the home of your dreams.