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Please note, the Online Banking Portal will be unavailable from 7am - 2pm on Sunday 14th July due to site maintenance.

Please note, the Online Banking Portal will be unavailable from 7am - 2pm on Sunday 14th July due to site maintenance.

Self Build Costs
Small model home on top of architecture plans

What Does It Cost to Build a House? An Overview from Hanley Economic Building Society

Determining the cost of building a house can vary widely based on individual circumstances. With self-build projects offering a personalised experience, there are options to suit almost any budget.

Establishing Your Budget for a Self-Build

To determine your available funds for a self-build home, consider the following sources:

  • Personal Savings
  • Equity from Your Current Property
  • Self-Build Mortgage Options

Initial Investment: Acquiring the Plot

Before construction begins, the first significant expense is purchasing a plot of land (unless you already own one). The cost of the plot will depend on your chosen location. In addition to the plot cost, you must account for legal fees and stamp duty. For the most up-to-date SDLT rates, visit HMRC.

After determining the cost of the plot, deduct it from your total available funds (savings, equity, and mortgage). The remaining amount will be your construction budget. It is advisable to set aside 10-15% of this budget as a contingency fund for unexpected costs or additional fees, such as those for architectural services, which typically range from 7 to 15% of the build cost.

Understanding the Cost of a Self-Build Plot

Valuing a Plot for Self-Build Homes

Determining the value of a plot for a self-build home involves applying the 'third, third, third' principle, as suggested by self-build expert David Snell. This principle breaks down the plot cost, construction expenses, and potential profit into approximately equal parts of the final home value. Considering factors like terrain slope, utility access, and legal constraints such as Covenants, Easements, and Wayleaves ensures an accurate valuation and financial feasibility. Here's 10 tips to help you find the perfect plot.

Key Considerations for Plot Valuation

When valuing a plot for self-build, consider its condition, location, and utility access. Using the 'third, third, third' principle can help estimate the plot's worth relative to the expected final home value. Additionally, assess legal restrictions like Covenants, Easements, and Wayleaves to understand the plot's development potential and associated costs thoroughly. These considerations ensure an accurate valuation and maintain financial feasibility throughout the self-build process.

Evaluating a Building Plot

Another approach to assess the value of a building plot is by calculating the potential value of the finished home. Expert self-builder David Snell suggests following a 'third, third, third' rule: the plot cost, build cost, and profit each account for one-third of the final home value. This method helps you evaluate the value of similar homes on comparable plots and work backwards to estimate your plot cost.

Remember that the specific conditions of your plot can significantly impact your building costs. For example, in the UK, every 1° slope on your plot can add about £1,000 to your construction costs. More details can be found in our guide on building on a sloping site.

Additionally, whether your plot has access to essential services and the presence of Covenants, Easements, and Wayleaves can also influence costs.

By considering these factors, you can more accurately estimate the total cost of building your self-build home. Proper budgeting and setting aside a contingency fund are crucial for ensuring your self-build project is financially manageable and successful.

For more tips and detailed guidance on self-build homes, visit our Self Build Mortgage & Information page.