Self Build – A licence to print money?
Property investors are becoming more adventurous in a bid to make greater profits. Self build is a growing phenomenon and appears to have been very successful for the adventurous few who have taken the plunge. So is self build the next big thing and what is it all about?
Self build in the UK
The number of self build projects, across the UK, has risen dramatically in recent years, rising from just 2,000 houses in 1978 to 15,000 houses in 1999. In 2005, the number of self build houses hit an impressive 25,000 and analysts believe that this number could increase to 40,000, in the next few years.
Of course, many people self build for their own pleasure and not necessarily for investment. However, even these individuals tend to find themselves in the wonderful position of having made a handsome profit on their project. Cost savings on building your own property can be as high as 30 percent, depending on the amount of work that the individual decides to carry out on the project, which is good news for investors and residents alike!
There is no denying that self build makes financial sense. There are, however, many more potential issues that need to be considered. When buying a brand new property, investors can effectively walk straight in, but with a self build there is a lot more ground work to be done.
One of the most important elements of a self build is to find the right plot, in the right location. This is arguably the hardest part of the entire self build project. As an investor, finding a desirable plot is key, because once the property is complete, the quality of the plot will determine its saleability and, therefore, onward asking price. A property on an undesirable plot, no matter how attractive the house, will never reach the top market price and this may restrict potential profits.
A plot without planning permission will invariably be a lot cheaper than one with outline or full planning. However, there is always the risk that planning permission will not be granted and you would, in effect, have a useless plot of land. Bear in mind that anyone selling a plot of land is aware of the higher asking price that they could achieve with planning approval. Therefore, if they believed that they had a realistic chance of gaining permission, this probably would already have been sought. Be suspicious of plots without planning permission. When trying to obtain planning approval, it is important to seek the advice of a professional who knows the rules and regulations, in your specific area. By obtaining the advice of the local council, as the plans are developed, you are much more likely to gain planning permission, at the first attempt, which will save a great deal of time and expense in the long run.
The business of buying and selling UK land for sale has its own vocabulary and its own set of procedures. Solicitors, Land Agents and Estate Agents make their living by operating this system and they do not go out of their way to explain what they are doing for their clients’ benefit. If you are buying a self build plot of land for sale, it is important to realise that you are going to have to accept the system and learn the vocabulary.
One of the most important factors, when it comes to buying a plot and making sure that you get the plot at the correct price, is the likely cost of building on the land. Some of the issues that will have a substantial bearing on cost include the accessibility of water and sewage and how far pipes will have to be laid. Water companies will normally offer free quotations, so shop around BEFORE you buy. A similar approach should be taken to both gas and electricity, although with gas you do have the option of using LP gas if laying pipes proves to be prohibitively expensive.
Self build is certainly an excellent way to gain a very handsome profit in a short space of time. However, don’t underestimate how time consuming such a build is likely to be; even a hands-off approach is likely to be very hands-on!
If you are interested in self build, try these links for more information:
www.selfbuildabc.co.uk
www.selfbuildit.co.uk
www.homebuilding.co.uk
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