How to build your own house

Why build your own house?

If you build your own house it’s likely to end up worth a lot more than what it costs you to construct it – as long the project is managed properly. Technically, if everything goes to plan when you build your own house, you’ll get your ideal home for a fraction of the market price.

Building your own home also gives you the freedom to include features that may be impossible or at least very costly to install in other properties. For example, this could include energy efficiency and green features.

Luxuries such as underfloor heating can also be added for a fraction of what it’d cost to install them in an existing property.

Is it cheaper to buy a house or build your own house?

Before you start building your own home, check out your local area to make sure that your dream property isn’t already built and waiting for you.

If you find one that’s a close match, you can work out whether you’d be able to build a replica for less than the asking price of the existing home. If the existing property would need work, then don’t forget to account for renovation costs in your workings out.

What costs are involved in building your own house?

The costs involved in building your own home can easily spiral out of control if you aren’t realistic. Make sure to research and consider the likely costs, this can include:

• Land

• Architects

• Builders

• Materials

• Fixtures

• Fittings

You'll also need to work out ongoing costs, such as if you’ll be able to afford rent or a mortgage while working on the construction. It’s always a good idea to include some contingency in your budget in case something unexpected happens.

Building your own house is a huge financial commitment, so make sure you look at your finances and decide whether you're in a good position.

What affects the price of a self-build?

There are several factors that heavily affect the cost of building your own home.

These include:

• Size: Of course a bigger house costs more to build

• Location: Where you build your own house will have implications on the price of land and labour

• Your involvement: If you can take on some of the work yourself you can reduce the price of the project

• Floorplan: The floorplan, shape and layout of your home will affect the price. Did you know that square floorplans are the most cost-effective?

• Storeys: Having several storeys can save money because it uses less land and reduces foundation and roof costs per square metre

• Spec: Depending on how premium you want your home to be, the costs can vary significantly.

Get a self-build mortgage when building your own home

Unless you have lots of savings or equity in your existing home, it’s likely you’ll need a self-build mortgage.

A self-build mortgage is specifically designed for you if you’re looking to build your own house.

Unlike traditional mortgages, a mortgage to build your own home, UK wide, usually releases the money in stages. This is so you’re able to pay for land, labour and materials as your build progresses.

It’s also common for self-build mortgages to vary the loan to value (LTV) you’re able to borrow to build your own house. For example, you might be offered 75% of the cost of land, but 85% of the projected building cost.

Not all high street banks offer self-build mortgages, talk to a mortgage broker to see what's available for you.

Find the perfect location to build your own house

If you’re wondering how to build a house, then finding a plot of land is usually one of the first and often most crucial decisions to make.

Your choice of land will be limited by your budget and the land available. So you’ll need to extend your search as widely as possible if you want to build your own house.

Speak to local and online estate agents, look at property websites and check land auctions as a starting point.

Have a look to see if any developers, farmers or utility companies have undeveloped land in the area. If so, you could contact them to find out whether they’re open to offers.

It’s also worth contacting your local council and checking the Homes & Communities Agency website. Through these, you can see whether they have any suitable plots for sale.

Consider accessibility

There’s little benefit to having a sizeable plot of land if you can’t access it.

Before buying a plot to build your own house, check that there’s access from public roads. Access will allow you (and construction traffic) to drive onto the site without having to pay for right of access over someone else's land.

What else you should check about the land on which you’ll build your own house?

To get the right plot on which to build your own house, you’ll need to make sure you ask the right questions, such as:

• Is the land on a flood plain?

• Is it under a flight path?

• Is it close to a rail line or large road?

• Are there any planned developments nearby? (property, industrial or otherwise)

• Are there are any public rights of way across the land?

• Is the plot big enough for your plans?

• What are the views like?

• Is your property likely to be overlooked by neighbouring homes?

You should also look at the market value of properties in the surrounding area and see how the cost of land compares.

This’ll give you an idea of whether the land’s worth the asking price. It’ll also help you work out whether you’re likely to make a profit if you sell the home later.

Get planning permission to build your own house

Without planning permission, you don’t have a legal right to start construction, so this is a necessary step. Your council could order the destruction of any work at your own cost if you build without getting planning permission first.

Check planning permission rigorously and don’t buy a plot of land until suitable planning permission has been granted.

There are two levels of planning permission available. There’s outline planning permission and detailed/full planning permission.

For detailed/full planning application fees, it currently costs £578 (12 March, 2025)

For outline planning permission, in site areas under 0.5 hectares, it currently costs £578 per 0.1 hectare to make an outline planning application, and £624 per 0.1 hectare for sites between 0.5 and 2.5 hectares (12 March, 2025)

What's the difference between detailed/full planning permission and outline planning permission?

Detailed or full planning permission is where a full construction proposal has been agreed in detail, for a specific build. This could be for a three-bedroom house or one-bedroom bungalow, for example.

An outline planning permisison works by granting approval of an outline plan. This means that the plot has permission for a certain type of development to be built on it, but that specific construction plans aren’t yet agreed.

Note: Outline planning permission is usually valid for three years, before re-application is needed.

Stamp duty to build your own house

When building your own home, you only need to pay stamp duty on the cost of the plot itself. You don’t pay any stamp duty on the value of the completed property, unlike when you buy an existing property.

The rules are:

• SDLT is payable if the land price exceeds £250,000 (or £425,000 for first-time buyers)

• If you already own the land or inherit it, you won’t pay SDLT on the build itself

• Different rules apply under Land and Buildings Transaction Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales.

What else to consider when building your own house

• Plan thoroughly - you’ll need to be as specific in your requirements as possible when you do your planning to build your own house. However, you’ll also have to be flexible with how your plans are implemented, to keep your costs down and ensure you stick to your budget.

• Find an architect - having the right architect will mean you achieve the right, one-off design for your self-build home. It’ll also help make the self-build process as stress-free as possible. You should also look at examples of their past work and, if possible, get case studies or testimonials from previous clients.

• Choose your team carefully - having quality, reliable tradesmen on board will help you make sure your property’s well finished. It’ll also help the build to stay on track and make everything run as smoothly as possible.

• Source materials yourself to cut costs - try to shop around for the best price instead of sticking to the builder's recommendation as they may be tied to a particular merchant.

• Get insurance - you may need to get insurance to protect anyone working on site, if you’re unsure what you need, speak to an independent financial advisor or insurance broker who can help.

• Reclaim your VAT - the purchase of building materials for a self-build project is exempt from VAT. This means you’ll be able to claim this back at the end of construction. HMRC's website explains how to get your money back.