The government says it wants to make it easier for people to stop dreaming about their ideal property and start building homes.
Housing Minister Kris Hopkins recently told a Custom Build Summit in London “We are determined to help aspiring self-builders up and down the country who want to build the home of their dreams but can’t find a plot to get started”.
One of the first hurdles to overcome is to find a suitable plot. To help with this the Homes and Communities Agency is looking to free up more surplus public-sector land. It is reviewing the large number of available plots to identify those which are not viable for large-scale house building, but are perfect for small housing projects like self-build.
More property asset data will be published online and the Community Right to Reclaim Land enhanced so self-builders can request redundant public sector land is released and sold for self-build projects.
New planning guidance to help self-build projects and reduce costs
The government has said that it will now introduce new planning practice guidance to ensure that councils establish the demand for self-build in their area, as well as take steps to help aspiring self-builders. This will include compiling a local register of people who want to build their own homes so they can be given first priority when new brownfield sites become available.
Many self-builders have been horrified to discover that even if they can get planning permission they are asked to pay tens of thousands of pounds as a ‘Section 106 tariff’ and also the community infrastructure levy.
These are payments intended to give back to the local community some of the added value which will accrue to the land when planning consent is granted. They may be justified in the case of a large-scale development of houses for sale at a profit, but are questionable when someone is planning to build a home which they will occupy themselves on completion.
It is therefore good news that the government has announced that genuine self-builders will be exempted from paying inappropriate Section 106 tariffs and the community infrastructure levy, which will cut the cost of self-build by thousands of pounds.
What you need to check before buying a plot
Before rushing to buy a plot buyers should carry out ‘due diligence’ and get professional advice on the suitability of the land for their intended project. The following points should be considered:
1. Does the seller have proper title to the land including any land over which access is required? This will be something for a Conveyancing Solicitor to check out.
2. It is essential to ensure that the plot has proper access – if it fronts an existing public road there should not be a problem, although consent will be required to make a new vehicular crossing to the road. If access will be by means of a private right of way then legal advice will be required to the make sure that the plot has the benefit of an existing legal right, or that the seller can grant one.
3. If there is an existing right of way it will be necessary to check whether it can legally be used by vehicles or just on foot, and whether there are any other restrictions on use which would affect the proposed development.
4. How easily can services be connected to the plot, and what will be the cost of doing so? If services are not conveniently available in an adjoining road then it would be necessary to make connections through land belonging to adjoining owners. This is usually less of a problem for water, electricity and gas if mains are available nearby, as the supply companies can arrange to lay connections under their statutory powers.
5. If drainage can only be connected to a main sewer through land belonging to someone other than the seller then it will be essential to negotiate a full legal easement with them before the plot can be developed. This would involve further expense and legal costs. For properties in more rural locations alternative forms of drainage such as a septic tank may be considered.
6. Planning – does the plot already have consent for residential development? (In which case it will no doubt be reflected in the asking price. ) Any existing consent will usually only be in outline form. Such a consent will be subject to conditions, which would need to be checked to see how they would affect the planned development.
7. If the plot is not being sold with planning consent the buyer must consider whether there is a realistic prospect of getting consent for residential development, otherwise the plot would not be worth buying. The local council’s planning department may be helpful but planning law is a complex topic and it will often be worth getting professional advice at the outset.
8. Will the local council want payment of a Section 106 tariff? (This refers to S106 of the Town and Country Planning Act 1990, which gives local Planning Authorities powers to require payment in order to offset the costs of the external effects of development. ) While the government has said that genuine self-builders will be exempted from paying inappropriate Section 106 tariffs, some payment may still be required. Again this is an area where getting professional advice can save money.
Sorting out your budget and getting a mortgage
It is important to sort out your budget before embarking on any self-build project. You will need to work out the likely cost (including legal and professional fees) and consider how you can finance the purchase of a plot and the building work. Several mortgage lenders now offer products for the self-builder which allow funds to be advanced in stages as various parts of the building works are completed.
Self-build does not mean that you have to do all or indeed any of the construction work yourself. For example you could decide to employ a qualified RIBA architect who would not only draw up plans but deal with planning matters and oversee the construction work. This would give the benefit of a final completion certificate and the architect’s professional indemnity insurance.
However you could purchase off-the-shelf plans and contract with a reputable builder for all or part of the construction work. Alternatively there are several companies which produce kit homes which can simplify the construction work.
Your solicitor’s work need not end with the conveyancing for the purchase of a plot. Solicitors can also help with advice on planning law and contracts with architects, builders and other contractors if required. Don’t forget that you are likely to be at a disadvantage when dealing with such people so legal advice can save you entering into an unfair contract.
While you will almost certainly encounter problems during the construction period, living in a home which you have built yourself will be a very satisfying experience. You end up with a home which meets your needs and aspirations rather than having to settle for a standard product from a developer.
Further advice and information can be obtained from the National Self Build Association http://www.selfbuildportal.org.uk/