Wealth

Can you build your own house for £150,000?

Do you watch Grand Designs and think to yourself “I could do that”? Or is housing where you live simply too expensive and you think that the only way forward is to build your own house?

Well, Housing Minister Grant Shapps is on your side, and on May 14 he made the fairly astonishing claim in his blog on Conservative Home that “Whilst the average price of a house is £232,000, a self-built home is £150,000 average, including the land”

Can it really be true?

The background

While lambasting Britain’s self build sector with the fervour of a John Motson - “But before you wonder what all the fuss is about, consider this. Where does Britain feature in the table of major countries delivering homes by self-build? Near the top? Mid table perhaps? Just avoiding relegation? No. Sadly, we’re seventeenth. Out of seventeen!”, he claimed that ‘only’ 14,000 houses are being self built every year in the UK. This figure itself comes as some surprise to the house building industry given that last year, Barratt could only manage 11,171 homes, whilst Taylor Wimpey built 10,180

But no matter, Mr Shapps is on a mission to make us a nation of self builders

In April 2012, at a Downing Street reception attended by the great and the good (well, Kevin McCloud, anyway) he launches a package of measures to give as many people as possible the opportunity to build their own homes

The measures

In order to double the number of self-built homes from 14,000 to 28,000 a year over “the next few years”,  Mr Shapps’ measures include:

- Better access to finance by boosting mortgage availability for self-builders
- Making more land available for self-build projects
- More builders and developers offering self-build housing
- Cutting red tape for people wanting to build their own homes in the revised National Planning Policy Framework
- Access to better information  including a new web portal, www.selfbuildportal.org.uk

This new website is, in fact, excellent – jam-packed with essential information on how to self-build, from the very beginnings of planning a project to the nitty-gritty. It’s definitely worth a look.

The costs

Sadly for Mr Shapps, his  own new website dismisses the notion of a house for £150k

It has a handy budget calculator that enables you to calculate the costs and notes that construction costs for a “generous 3-4 bedroom house” range from £108,800 in Northern Ireland to £188,000 in London, with the average coming in at £154,866″. Not too far out, you may think, on his £150k claim. Especially as that’s based on contractors doing most of the work. You could do it cheaper, taking on about 60 per cent of the work yourself

If you do that, you reduce the average cost to £99,000

Have you spotted the flaw in this particular reasoning?

Of course if you did most of the work yourself you would probably have to take months off work and rent accommodation while your dream home took shape, which would all take a toll on your wallet, not to mention your marriage, sanity etc

And that’s not the whole story

These figures don’t include the cost of actually buying the land you’re going to build on in the first place, a fairly serious omission you might think

Land costs vary massively across the UK, from an average of £50,000 in Northern Ireland to a whopping £430,000 in London for a standard 1/15th-hectare sized plot

Unless you’ve inherited land, these costs naturally need to be tacked on to the construction total to get the full cost of building your own home

Taking land costs into account, the average cost of a three-to-four-bed self-built house rises to £158,800 in Northern Ireland to £618,000 in London. Across the UK the average is £281,116

Even if you take London out of the equation, the average is £250,490 – more realistic but still well above Mr Schapps’ $150,000 (what was he on?), and, more worryingly, above the £232,000 average cost of a ready-made house, according to the government’s own figures

Mr Shapps, please stop telling porkies!

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May 18, 2012

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