Building your own dream home
Shows like Channel 4’s Grand Designs reflect the growing popularity of self-build, which accounts for 13,000 new homes every year in the UK. So, if your dream is to build your own home, should you take the next step towards making it a reality?
‘There are certainly a lot of advantages’, says Emma Sidney, a Conveyancer in the Residential Property team. ‘Self-build lets you create a home which fits around your lifestyle and individual aesthetic requirements. However, there are many more issues to consider than with a conventional purchase. So, it is especially important to get the right professional advice.’
What type of self-builder are you?
There is no standard definition of self-build, and it can be better to think of it as a spectrum. At one end, those with relevant skills and experience may undertake all the work themselves. At the other, an individual may commission a third party to construct and deliver their bespoke home, their only involvement being to make the key design decisions. In between, there are options which allow lesser or greater degrees of involvement. For example, a contractor could be responsible for delivering the building’s shell, with you then taking over for the fit out.
It is worth researching your options at the outset, and take care not to underestimate the skills needed or time commitment.
Acquiring your building plot
Finding the right plot can be challenging. Conventional estate agents and property search portals may have details of building plots for sale, and it is also worth looking at auction listings. You could investigate specialist plot finder websites and whether any larger house builders are selling off plots. Local authorities must keep a register of people looking for self-build plots, and they sometimes also have surplus land for sale. Finally, if you spot a suitable site, you can ask the owner if they would sell it. If the land is registered, a Land Registry search can provide their details.
Remember though, not all land is suitable for development and there may be legal and physical constraints.
Due diligence for land purchase
As with any land purchase, it is important the seller has a good title to convey to you. Any title issues could affect the value of your investment, and your ability to secure funding. They could also impact on the viability of your project. Developing a site often involves exercising rights over adjoining land, for example, to run services, such as drainage, or for access. Our experience in development work and plot sales means you can be confident we know what to look for. We will check whether your proposed purchase has the necessary rights and, if not, advise you on practical solutions, for example reaching an agreement with the neighbouring landowner or through title insurance.
Securing finance for self-build
Budgeting is important, and you should decide how to finance your project in advance, and plan for contingencies and any cost overruns.
Sources of finance could include your own savings, informal borrowings, taking out a second mortgage, re-mortgaging, selling your current home or a specialist self-build mortgage. A good mortgage advisor can explain what is available. However, self-build lenders often advance funds in stages linked to the value or certification of work. This can cause cash flow problems if there are delays or problems with the construction process. You can mitigate this by allowing a sufficient margin when budgeting.
It is also important to ensure you have the right documents in place, or that you will be able to obtain them, before applying for your loan. For example, lenders often insist on a structural guarantee and want to see your architect’s professional indemnity cover. We understand lenders’ requirements, including those who finance self-builds, so are well-placed to deal with the legal aspects of this process.
Planning permission and building regulations
A seller may offer a building plot with or without planning permission. A plot with permission will be more expensive. However, buying without planning permission, is much riskier. You have the additional time and expense of applying for permission yourself, and there is no guarantee of success.
If you are considering a plot without permission, then it is important to take specialist planning advice before committing yourself financially. Any planning application will be determined in accordance with national and local policies. A planning consultant can help increase your chances of success, and most local planning authorities offer pre-application advice via a non-binding view of your proposal. However, you still risk not being able to build your home. A solution could be to negotiate an agreement to purchase the plot conditional on obtaining planning permission. You would then only have to buy once you have the necessary planning in place.
Where a plot already has planning permission, it is important to check its suitability. For example, the permission may be in outline, which means the planning authority accepts the development in principle, but you will still need to agree the details, such as the physical appearance of the building. Alternatively, there may be conditions which must be satisfied, for example, the construction of access and parking before occupation, which could affect you if you plan to live on site.
Unlike planning permission, which is concerned with the overall principle of development and appearances, building regulations ensure your building meets certain standards. There are two types of routes to approval: full plans and building notices. There are advantages and disadvantages to each, and we can help you choose the one most appropriate to your circumstances. You will also need to ensure you obtain and keep the certificate of completion; as well as giving you reassurance of the standard of the work, you will need them to satisfy any purchaser or lender in the future.
Building contracts, warranties, and insurance
Unless you plan to do all the work yourself, you must decide who will build your new home and agree the contracts which will regularise this process. The contract should cover all aspects of the work, including its scope, standard, price, duration, the schedule for work and payments, any variations, the parties’ other obligations and responsibilities, and how to resolve any disputes. You may feel tempted to rely on an informal word of mouth agreement. However, this is usually a mistake. Having the agreement set out in writing is important so everyone knows where they stand, and to avoid problems in the future.
There are different types of construction contracts and choosing the right one can be complicated. For example, one approach is to ask different builders to tender for the work. This can help you get the most competitive price. However, you will have to procure a lot of information at the outset, including a detailed design specification and a schedule of works, and you may need to engage the services of other professionals like architects and engineers separately. Another approach is a design and build contract, in which a single contractor takes on responsibility for both the design of the building and all aspects of its construction. This can be simpler and quicker than the tender route, but it may mean you have less control over how your new home will look.
Where there are multiple trades and professions involved, you should ensure you have recourse against any failure on their part, either directly, through the provision of suitable warranties, or because the main contractor is responsible for their work. This can avoid the situation in which, for example, your builder and architect refuse to accept liability for a defect because they argue it is the other’s fault. We have experience in different types of construction agreement and can work with your architect and any other professionals to avoid these types of issue, ensuring your project is correctly documented and meets your needs.
How we can help
If you plan to build your own home, there is a lot to think about. An experienced conveyancing solicitor will help facilitate this process, leaving you one less thing to worry about.
For further information on buying your own development plot, or conveyancing generally, please contact Emma Sidney in the Residential Property team on 01908 689351 or email firstname.lastname@example.org.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.