Build your dream home for less!

The Stamp Duty change has provided a boost to those looking to build their first home rather than just buy it.

I don’t know about you, but Channel 4’s Grand Designs is compulsive viewing in my house. There’s something enthralling about watching the process behind building a dream home, and the highs and lows (and God-awful weather) involved throughout.

Of course there is also the fact that in many cases these people have more money than sense and want something utterly daft and impractical, but self-build is not just an option for the mega-rich. First-time buyers seeking to get on to the housing ladder should also consider building that first property themselves.

Can we build it? Yes we can!

According to Buildstore, the UK’s biggest self-build lender, the Budget’s changes to Stamp Duty aren’t just beneficial to those people buying homes already standing, but self-builders too. It reckons a whopping 90% of the plots on its Plotsearch service, which as the name suggests helps you find a suitable plot for your home, are now exempt from Stamp Duty.

But is it worth it?

Save a fortune and do it yourself

There a couple of real benefits to building your own home. From a design point of view, you get the exact home that you are after, rather than compromising on a smaller garden than you’d like because there’s a big second bedroom, for example.

But there are also potentially some serious financial benefits to building your own property – as you miss out on the built-in profit that developers are looking for from traditional homes, you could be looking at a saving of anything from 10% to 30%. That then means you can get a smaller mortgage, which will also save you money in the long run.

• Watch this video: Three massive first-time buyer mistakes

VAT? What VAT?

Another great financial bonus of building your own home is the tax benefits involved. When the property is finished you can put in a claim for a nice VAT repayment on a lot of what you had to pay for.

OK, you can’t reclaim for furniture, carpets, curtains, white goods, trees and plants, nor for burglar alarms, professional services, equipment hire, transport of materials or the tools used, but that still leaves an awful lot that you are due 17.5% back on!

However, remember that you have to put that claim in within three months of the project finishing.

Where to build?

OK, so you’ve decided it’s worth it financially to build your own home. Now you just have to work out where and what to build.

Related goal

Cut your mortgage costs and pay off your mortgage early

Find out how to cut the cost of your mortgage by hundreds of pounds a month and become mortgage-free years earlier.

Do this goal

Obviously a good place to start is Buildstore’s PlotSearch. The site lists over 9,000 plots, conversion and renovation opportunities across the country. You’ll also be alerted whenever new plots become available in your area.

Each plot comes with its own detailed plot reports, looking at things like the status, services, sizes, planning details and vendor information.

However, you will have to pay for the service. It sets you back £15 for three months’ access, or £30 for a full year. It would be nice if it was free, but in the grand scheme of things if you are committed to building the perfect home, that fee shouldn’t break the bank.

An alternative is Selfbuildland.co.uk, which is free, though it doesn’t seem to have anything like the choice available from PlotSearch. However, I do like the fact that all plots contain a fair bit of information from the UK Land Directory on the plot itself.

A final site worth a look is Building-plot.org which again is free and offers a decent amount of information on each plot.

• Adopt this goal: Cut your mortgage costs and pay off your mortgage early

What to build?

Here’s the tricky one – what is it that you want from the property? Obviously, I can’t tell you the answer to that, but getting professional advice on how to build the perfect home for your own circumstances is a must, in my opinion.

Related blog post

• John Fitzsimons writes:

  Should you use an estate agent?

  When the time comes to sell your property, should you rely on an estate agent or do it yourself?

  Read this post

Personally I would want as many experts involved as I could afford. Do a bit of research for designers and architects in your area (the Royal Institute of British Architects would be a good place to start). The fee you have to fork out really depends on the size of the project, but according to some industry figures it will typically set you back 7%-10% of the build budget.

Building contractors are also important to have a chat with. Some will offer a choice of house designs – a bit like buying off the peg really – which may eliminate the need to use an architect. However, again you will probably have to compromise on the exact layout of your dream home.

• Read this blog: Should you use an estate agent?

Patience is a virtue

Throughout this whole process it’s crucial to be as patient as possible. It will take a while to find the right plot – don’t jump into it, wait until the right plot for you becomes available.

Planning permission can also take a long while to secure on your planned property, so be prepared for a bit of a wait.

As is insurance...

Another mistake a number of self-builders are susceptible to making is to view insurance as an unnecessary luxury.

Don’t assume that your contractors’ insurance will cover your build – you’ll need your own policy to cover public and employers’ liability as well as the tools, materials and any temporary on-site structures (that’s a port-a-loo to you and me!)

Do your homework

However for me the most important thing for anyone considering self-build is to do your research so that you enter the whole process with your eyes open. Again, Buildstore runs a series of educational workshops and events covering all topics from five-day courses on the entire process, to one day sessions on things like sustainable building systems.

Remember, sticking to your budget for your project is vital, or you could end up deeply in debt, unable to finish the build. Luckily, lovemoney.com’s brand new, free online banking tool can help you with your budgeting. It enables you to categorise all your transactions from different bank accounts and credit cards so you know exactly what you're spending your money on throughout the month, using a single log-in. Find out more

More: House prices grinding to a halt | Pay just 1.99% on your mortgage!