Last updated 10:13, Friday, 09 May 2008

Paul Webster of Cumberland Building Society on self-builds

It pays to talk: Use professional advice where required and talk to other people who have undertaken their own self-build projects

The increased interest of people wishing to undertake their own self-build projects is probably due to the increased presence of property-related programmes on TV nowadays.

But is it right for you?

Around 12 per cent of new houses built last year were self-builds and this figure has been on the increase since the early 1990s.

Not only does a self-build home provide better value for money – up to around 30 per cent cheaper than purchasing a similar ready-built home – but it fulfils most people’s dreams of having the house they want, where they want it.

Self-builders range from the seasoned individuals who have gained experience on a number of projects to the first-timers, with or without a keen interest in DIY.

Only around five per cent of self-builds are true DIY projects to their maximum extent. This is in part due to the changes in building regulations requiring such things as plumbing and electrical work to be undertaken by professionals.

While self-builds have obvious rewards, they are extremely hard work, take many months to complete and can have their own inherent problems.

Most people wishing to undertake a self-build will search relentlessly for the ideal plot. It is important that the same amount of attention is given to thinking the whole project through.

Careful research and planning, taking sound professional advice when needed and a good degree of common sense are all key factors to a successful project.

The self-builder will also require good organisation and management skills as much of the pain that may occur can be taken out of the project through shrewd and careful advance planning.

Financial acumen is an advantage – a sensible monitoring of the progress of the build at regular intervals can make considerable savings. And if things get really tough, self-builders need a strong determination and resolve to see the project through to a satisfactory conclusion.

While the availability of financial products can change over time, as is currently evident, it is good practice to have a clear understanding of how you intend to finance the self-build at the same time as you are looking for your ideal plot.

The traditional self-build mortgage sees funds released at agreed stages, usually foundations, wall plate level, roofed, plastered out and completed. Funds with this type of advance are released after the work has been done and certified either by way of Architects/National House-Building Council (or other similar warranty provider) stage certificate.

The lender will agree at the outset the percentage of the costs that will be released at each stage.

Financing your self-build in this way means that you need to have the available capital to finance the project between the stages. Generally, self-builders do this by selling their current home, thus releasing the equity therein. However this gives them the added consideration of where they to live while the new property is built. They could live with relatives (if close by) or consider renting. Some opt to live on site in a caravan.

One thing is for sure, no matter how much planning you put into the project things can still go wrong. Use professional advice where required and talk to other people who have undertaken their own self-build projects. More importantly, be prepared for some hard work.

Paul Webster is a business lending manager at Cumberland Building Society. Visit the website at www.cumberland.co.uk

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.