In 2020, a study carried out by the National Custom & Self Build Association and the Building Society Association found that 32% of people said they were interested in designing or building their own home. 9% of those people said it was likely that they would build their home in the future.

So, considering that 3 in 10 are looking to build their future home, what do the pros and cons look like? And, as something that’s often seen as an inaccessible dream, how do the costs stack up?

The costs associated with buying a home

When you buy an existing home, there are lots of costs you need to factor in beyond your mortgage repayments.

For one, you’ll need a deposit of around 10% up front, although this is often more. Then, you pay for conveyancing and surveying fees, which are averagely around £1000 each depending on location and the type of survey. Your bank will also require a mortgage valuation of their own, which is typically £200-£400.

On the day of completion, you’ll usually have a mortgage broker to pay – they can expect around 0.35% of the overall loan size.

You also need to pay mortgage fees to the bank, although these are commonly absorbed into the overall loan, and paid back over the term of the mortgage. However, you can choose to pay upfront, which can cost a further £1000+.

As for stamp duty, the amount you are charged will depend on the value of the property you’re buying: 

• For properties up to the value of £250,000, you don’t pay any Stamp Duty.
• From £250,001 to £925,000, you pay 5% of the property value.
• From £925,001 to £1.5 million, you pay 10% of the property value.
• For all properties above £1.5 million, you pay 12% of the property value.

Advantages of buying a property 

When it comes to buying a property, nothing is certain – but you do typically get a rough timeline not long after your offer has been accepted. Your move-in date is often much sooner from completion than construction generally takes.

The obvious advantage of buying an existing property is the convenience. In most cases, you can move in right away and start making the place yours. You can then get to know the property, what you like and don’t like, and plan any renovations you wish to make.

If your heart is set on a specific location in a well-established neighbourhood, then you’re likely to have quite a few options of properties to buy. You can also find properties with plenty of character and unique features, particularly if they’re older.

And, as an added bonus, an existing home may have mature landscaping already – so you don’t have to overhaul or plant a garden right away.

Disadvantages of buying a property

The advantages of buying a property also reveal the disadvantages if you flip them on their heads.

Inflexibility

For example, what appears as convenience when buying existing property may prove as inflexibility further down the road. If customisability is important to you, a ‘ready-to-move-in’ home might not be the perfect choice — after all, it may be difficult to find your dream home already in existence. Of course, you might get lucky, but many home buyers find themselves making compromises.

Say you want bathrooms on all 3 floors — you might have to settle for not having one on the ground floor right away. If you want an open plan kitchen-living room, you might find yourself settling for disconnected areas.

And when a home isn’t exactly what you want it to be, what do you do? You start thinking about making changes. Unfortunately, though, existing homes aren’t usually built with expansion or significant structural changes in mind. While you can often make these changes, you’ll be paying for both the deconstruction and reconstruction, and the careful planning and steel reinforcements that are often part and parcel of these big projects.

Required renovations

Older homes in particular may not be functioning as best they could, and expensive repairs are often needed to get them up to standard. For example, an aga is beautiful, but is it convenient? Is it likely you’ll have to switch out oil lines for gas? These are all important considerations when it comes to buying an existing home.

Indeed, renovations over time cost money – according to MoneyHelper the average repair bill for new homeowners is £5,750. But aside from this, renovations take time, and effort, and may mean you’re living in a building site for a while until work is completed.

The costs associated with building a home

As for building your own home, there are some unique costs associated with getting the place of your dreams.

We’ve listed below the things to take into account:

• Finding & financing a team of: 
  • Architects
  • Builders
  • Project managers
  • Interior designers
• Planning permission – can cost around £500
• A land survey – can cost around £500
• The cost of the plot itself

You’ll also need to factor in the cost of the home — the substructure and the superstructure. What you pay really depends on what you have to spend, in that the self-build experience is entirely tailorable.

Read our blog about managing costs on a self-build here.

Advantages of building your home

The advantages, then, are clearly marked by one key word: customisability. When you build your own home, you get the home you want from the very beginning.

Freedom to choose

You’ll have the ability to work with excellent architects, builders, and interior designers for an immaculate finish. They’ll even bring things to the table you might not have thought of, like refreshing style choices or fascinating layouts — things you won’t have found in an existing building.

Part of that customisability comes in your freedom to choose materials. For example, you might choose to only use sustainably-sourced materials for your bespoke interior. Having a hand in all of this means you can feel more confident in the state of your home, and trust that only the best materials make up the space.

When you build your own home, you get to decide on your lighting, furniture, and fittings from the get-go — which means you can choose luxurious and bespoke items suited to your tastes.

Financial benefits

As for the financial advantages, you save on stamp duty and only pay for this on the cost of the plot (rather than the value of the completed building). You also pay zero VAT on new builds. That means you’re exempt from being taxed for labour and construction materials. Simply fill out a claim form at the start of your project.

Should you come to sell down the line, you can see a significant profit on self-builds, potentially of 25-30%.

Energy efficiency

Most existing homes in the UK sit averagely in Band D for energy efficiency. On the other hand, new homes can be built with energy efficiency in mind. 

Building your own home to sit comfortably in Band A will mean significantly reduced running costs — which is all the more important given the recent energy price inflation, as well as the positive impacts on the planet.

The process

Finally, another advantage of building your own home is the process itself. Many people underestimate just how rewarding this process can be. Regardless of whether you’re actually out there laying the bricks, you essentially laid the foundations of your own home when you put the wheels in motion, brought the team together, and drew up plans.

Is building cheaper than buying?

So we’ve talked about the general costs of building and buying, and the pros and cons associated with each.

Still wondering whether to build or buy based on cost? The answer is, unfortunately, it depends! 

If you’re trying to build in a highly-sought after area, your costs for the plot and permissions may prove more expensive than buying there. But if you want to have a home that’s completely to your tastes, then building is likely cheaper than completely stripping and retrofitting an existing home. 

If you build on time and to budget, then building can indeed be much cheaper than buying.

And of course, building to a high spec and with eco-friendliness in mind can reduce your long-term running costs.

Aspire for more

Aspire commission, Kings View

For the last 14 years, we’ve been bringing visions to life. In the first 10 years since establishing Aspire in 2008, we created over 40 luxury properties in London and the South East. 

Our team of construction managers, bespoke project managers, contract management leads, and more have been trusted with a range of private commissions in a variety of styles. Take a look at our completed projects here to get inspired.

And if you’re interested in learning more about us and how we might be able to assist you, please do get in touch for a chat. Whether you choose to build or buy, we’re here to help with our development and period refurbishment services.