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Self-build ‘compelling option’ despite limited products

by: Heather Greig-Smith
  • 25/11/2016
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Self-build ‘compelling option’ despite limited products
Self-build is becoming a compelling option, with government incentives to local authorities to double numbers, according to developer Searchfield Homes.

However, the pool of lenders offering products in this area is limited (see list, below).

Releasing research on the top 20 self-build commuter locations, Searchfield pointed to the government aim of doubling the number of self-build homes to 20,000 by 2020. It is incentivising local councils to include self and custom build developments in their plans for future housing.

Andrew Searchfield, managing director of Searchfield Homes, said: “When it comes to high value homes, the stamp duty saving also makes self-build compelling, with SDLT charged on the purchase of the plot as opposed to the value of the completed property.”

However, Searchfield said that only a limited number of lenders offer financing for these projects. Most lenders restrict the loan amount to 60% of the final valuation and will stipulate that it does not exceed 90% of the total cost of the build and land.

“Our research identifies the minimum floor space required to make the build viable but generally speaking, building the largest possible house for the plot will give self builders the best return on investment,” said Searchfield.

Harpenden in Hertfordshire topped the list as the best self-build commuter town, followed by Esher and Weybridge, both in Surrey. In all three areas, self-builders looking to knock down an existing property to make way for a new one will require an increase in floor space of less than 30% for the project to be viable.

Locations requiring the smallest increase in floor space for the self builder to break even are the most viable, as they are more likely to get through planning and cheaper to build relative to land cost.

Searchfield said older houses such as 1930s properties that are not listed or in conservation areas are idea candidates because of their large gardens and comparatively low prices per square foot. Self builders need to hire an RICS surveyor to value the price per square foot of the proposed property and calculate the minimum size required for the house to exceed build costs in value. They are then advised to apply for planning for the largest property they can afford that will be permitted.

In Harpenden, self builders purchasing a plot for the typical price of £1.2m, will require consent for a 24.4% increase in floor space to break even, with the new house costing them around £1.8m to build, inclusive of the plot, SDLT and mortgage interest. The most affordable town in the top 20 is Epping in Essex where you can build your home for around £1.3m.

Surrey and Hertfordshire offer the greatest choice for self-builders, with 12 of the top 20 commuter locations falling within the borders of these two counties.

 20 best commuter towns for self-builders

Rank Town Total cost incl. plot, SDLT and mortgage interest


Increase in floorspace


1 Harpenden                      1,765,185 24.35%
2 Esher                      2,039,826 26.80%
3 Weybridge                      2,428,081 28.16%
4 Borehamwood                      1,667,201 29.57%
5 Rickmansworth                      1,678,328 29.82%
6 Reigate                      1,479,557 30.22%
7 Beaconsfield                      2,037,462 30.81%
8 Gerrards Cross                      1,831,942 31.10%
9 Chigwell                      2,012,367 31.13%
10 Maidenhead                      1,310,192 31.59%
11 Walton-on-Thames                      1,814,175 31.63%
12 Amersham                      1,492,595 31.80%
13 St Albans                      1,328,305 31.95%
14 Hertford                      1,408,560 32.08%
15 Ascot                      2,099,812 32.42%
16 Virginia Water                      3,132,197 32.47%
17 Leatherhead                      1,722,949 32.56%
18 Potters Bar                      1,419,044 32.73%
19 Windsor                      1,468,066 32.82%
20 Epping                      1,322,651 33.07%


Self-build mortgage providers



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