What is the main motivation for self-building? Is it the chance to get that perfect family home? Could it be a stepping stone to making money as a small-time developer? Or is it a way to obtain a cheap property when everything else is unaffordable?
I come across all of these reasons for creating your own house, but if I’m honest, it’s the first of these that floats my boat. Despite my position as a self-build consultant, I’ve only ever created one dwelling for myself and the family – all the rest of the projects I’ve been involved with have been for others. I do get asked why I haven’t done it again, and there’s a simple answer: I don’t need to.
My goal was to establish the perfect family abode for us; a place we could call home after years of moving around with the RAF and somewhere our children could say they were from. That’s exactly what we did. While our house might not be everyone’s idea of perfection, it’s just right for us. We love it and it would take a lot to make us move, because our house is tailor-made to suit our lifestyle.
I present two days out of three on the self-build course at the National Self-Build & Renovation Centre in Swindon. The majority of attendees are looking to build or extend their family home, but I can guarantee that there will be one or two people looking to make money from either small-scale or serial development, or converting larger buildings into flats. I try and address their issues, but they’re in a completely different world to the one I’m in.
Development is a commercial undertaking that carries risk, which means that you can easily lose as well as make profit. Building your own home as your principal private residence has several pros: no VAT on labour and a mechanism to reclaim the VAT spent on fixed materials; an exemption from the Community Infrastructure Levy (CIL); and Stamp Duty Land Tax only payable on the plot you buy.
None of these apply if you’re building to sell or rent the finished property as soon as work’s completed. So, if people are looking to make a quick buck, my courses aren’t particularly aimed at them!
The received wisdom a few years ago was that you might get away with building and selling three houses in succession, with a reasonable gap between each, before the tax man started getting interested.
But with CIL obliging you to live in the property for three years before selling, on pain of having to pay the levy, this is becoming less attractive. The likelihood now is that if you try to make money from property and you can’t demonstrate another form of income, you risk being targeted by HMRC.
Self-building is a way to get value for money, rather than a cheap abode. If you’re lucky enough to own family land or decide to tackle most of the work yourself, you can make huge savings. But I don’t see many, if any, cheap dwellings being erected.
For most people, this route to property ownership is a way of getting a better-looking, better-constructed and more energy efficient house for much less money than an equivalent home would cost on the open market.