The number of energy-efficient and sustainable housing projects is on the rise in the UK, thanks primarily to a change in consumer and home-owner attitudes. Just recently, Mole Architects completed a £1.2 million low-energy housing scheme in Fulmodeston Village, North Norfolk, which translated into labour intensive project that covered a staggering 690m2.
While sustainable building may be decidedly on-trend, however, taking the decision to invest in a self-build property is an altogether different proposition. Rather than purchasing a pre-built energy efficient home that requires a standard mortgage, for example, those who build their own homes are faced with a series of more complicated and unfamiliar challenges.
What Should you Consider before Investing in a Self-build Home?
The latest Robinhood Investors Conference is in the books, and some hedge funds made an appearance at the conference. In a panel on hedge funds moderated by Maverick Capital's Lee Ainslie, Ricky Sandler of Eminence Capital, Gaurav Kapadia of XN and Glen Kacher of Light Street discussed their own hedge funds and various aspects of Read More
Taking this point on board, what are the practical considerations which will determine whether investing in a self-build residential project is right for you?
- The Variations in Procedure and the Importance of Design: When you enter the market for a standard property, you are able to inspect it thoroughly and visualise yourself living there. This is a huge advantage, especially if you are not blessed with an ability to think creatively or innovatively. Building your own house requires a huge amount of creativity and vision, however, which when applied alongside a knowledge of construction can enable you to design a sustainable, functional and aesthetically pleasing home. The processes involved with constructing a self-build home are therefore extremely different to what you may be used to, so it is important to familiarise yourself with the market as soon as possible.
- Applying for a Specialist Mortgage: A self-build mortgage is exactly how you would imagine it to be, as it represents a financial loan which funds the construction of a property. It can be applied to your sustainable, self-build project, whereby the capital is released in instalments after an initial loan is extended to purchase the land. As a general rule, specialist lenders will typically lend no more than 75% of the cost of the land, or an estimated 60% of the labour costs. Established mainstream providers such as Capital Fortune tend to offer greater flexibility to consumers, however, so you need to be completely certain of your fiscal circumstances and goals if you are to make an informed decision.
- The Practicalities of Building a Kit Home: While the theory behind purchasing and constructing a self-build home is sound, the practicalities are decidedly more complex. Depending on the location that you select to invest in and build on, for example, you may not have access to local amenities, schools or alternative building that enable you to live a more convenient lifestyle. In addition to this, you may find it more difficult to repair minor faults that develop with the property, as has not been constructed in the traditional manner and will also include a host of unusual materials. You need to keep these things in mind and give them careful consideration before you invest your hard earned cash.