How to control self-build costs

Expand all Collapse all

• Michael Holmes

  At the moment a lot of people are looking very closely at their budget and wanting to make sure they extract maximum value for money from every pound, I mean money is a scarce commodity at the moment, even if you are flushed then I think at the moment people are being cautious.  You can control costs.  One of the best ways to do it is to take on the role of contractor yourself, so instead of paying a professional building contractor to co-ordinate labour, materials and the local authority building inspector, you can take on that role yourself.  Typically you’ll save 10-15% of the contract value.  That’s a significant amount of money across the whole house.  Also it’s worth negotiating on prices.  Unlike going to the supermarket, where everything’s labelled and has a fixed price, you can’t go and negotiate at the till at the supermarket, in a builder’s merchant or with any supplier in the building trade it’s not a matter of having a fixed price.  Everything is negotiable.  The harder you negotiate the more you’ll save.  One word of warning I would add though, with labour there’s a limit to how far you can negotiate labour prices, because if you cut them to the bone, you could encourage your sub-contractors to cut corners and that can end up being a false economy.

• David Snell

  Jason Orme
  Going on to actually finally having found a plot, one of the things that I think self builders do tend to worry about is build costs.  Am I going to get ripped off, is this going to go way over budget, am I going to end up bankrupt at the end of this project.  Yet having been through it x amount of times how successful have you been in terms of actually managing to predict what you’re going to spend.

  David Snell
  Fairly successful, but I have made mistakes.  I mean I’d be an idiot if I didn’t make mistakes, but I learnt from those mistakes.  In the magazine we’ve got the average build costs going in there, and the last three houses I’ve built have been smack in the middle of those.  I think the other thing to do, for ordinary self builders, I learnt by experience, is to literally keep up to date with the build costs that other people are paying, and particularly other self builders are paying.  Right now the labour is at least 20% cheaper.  Another reason why this isn’t a bad time to self build.

  Jason Orme
  And that’s your experience that labour is really come down in price over the past six to ten months.

  David Snell
  A builder gave me a price for £165,000 for something the other day, sat down and talked with him stood up and shook hands at £123,000.

  Jason Orme
  Do you feel that’s going to continue in the existing market?

  David Snell
  It will continue for the foreseeable future.  They’ve had a bit of a shock.  I think things are beginning to change.  A few builders I know have started to get work on the books, doing insurance work and things like that.  I hesitate to say green shoots because it’s a much used thing.  I’m beginning to see ‘sold by’ boards now.

  Jason Orme
  What about plot prices.  My experience of plot prices is that they haven’t really come down that much in our local area.  You’ve seen many more plots than I have over your time.  Do you think it’s a really great time to buy a plot or should you be waiting three or four months for prices to fall again?

  David Snell
  As you say, plot prices haven’t come down to the degree that houses have come down, in percentage terms. Why is that?  It’s because most plots sold by private vendors are actually financial windfalls for them.  It’s part of their garden, so they got planning permission on their garden.  There’s actually no compunction to sell in most cases. OK, we’ll have to mow the grass for another year, but actually we can ride this out. So although they’ll pull it down a little bit, they’re not going to pull it down to any great degree; and that’s the main reason.  They have come down.  I wrote about a plot in the issue before last, which I saw in June for £160,000 and the people I was with bought for £120,000, so they have come down but not to the same degree as housing.