Will the cost of my self build house exceed market value?

2 Answers

1. Chris Batesmith says:

   29th March 2023 at 4:38 pm

   Hi Tony,

   Thanks for your question. The short answer is that this all depends on your specific project goals and the site you’re working with. If you plan to sell on within a few years, then you’ll be much more price-sensitive and will want to structure your project accordingly. But for some self builders, current market values matter much less than getting the house they really want.

   A good example of this would be if you’re building a home you intend to live in for, say, 10+ years. This might lead you to put a greater focus on quality of space, materials and finishes, and in turn that might take you over local ceiling prices. Over time, however, you could rightly expect the value of your finished project to rise considerably. By building a highly insulated and airtight home now, as the readers in question did, you will also reduce your exposure to future energy price hikes. And I suspect energy efficiency will start to be reflected in market values in the not-too-distant future!

   In years gone by, the received wisdom was that you can self build for 20%-30% less than it would cost to buy an equivalent developer-built house, largely because you’re not trying to make a profit in the same way. But few self builders have the same motivations as a developer (the latter will typically aim to build as quickly and cheaply as possible while delivering a product someone will buy at a significant markup). So, I think a better way of looking at it is that self building enables you to achieve a higher-quality house than you could expect to buy for the same price on the open market.

   Ultimately, many self builders do complete their projects on a budget that enables them to match local market values or even turn a profit. So, there’s no reason to think you can’t do the same in the Highlands or elsewhere. But if this is your key target, then you may need to approach the project with slightly more of a developer-style hat on than if you were simply wanting to create the best house you can afford.

   Best of luck with your plans!

   Chris Batesmith (editor, Build It magazine)

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2. Anne Midona says:

   14th April 2023 at 12:52 pm

   Hi Tony,

   I don’t know where you are looking to build in the NorthWest Highlands, but we are currently self-building in Ullapool. We are finding the need to factor in additional costs for delivery as most suppliers will not venture beyond Inverness and some not beyond Perth. Builders and general tradespeople are also in short supply so you may need to be prepared for longer build times. We are also building on a tricky site with restricted access, so not making anything easy for ourselves.

   Standard housing is much cheaper here than in the rest of the country, but a good quality architect designed build will still fetch a good price if you are prepared to wait for the right buyer. We may be paying near market price for our own self build but we are aiming for a low energy efficient home which is custom designed for our needs well into the future.

   Hope this helps,
   Anne

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