homebuilding.co.uk 151the Build Before you start on site...
drainage and structural design. This could
lead to confusion about what you think
you might have bought. The fact that some
contractors include engineering design as
part of their package complicates matters
still further.
Before making appointments, it’s
important to figure out what you and your
project needs. Make sure you know what
you’re buying and be aware of service gaps
between professionals. It’s a good idea to
draw up a detailed list of services needed
and tick each one off as they’re appointed.
Don’t forget, some contractors and
suppliers offer design for little or no cost
— for example, structural systems and
mechanical and electrical installations are
considered as part of their package. It
therefore may not be necessary to pay for a
specialist to design these elements of work.
Watch out for professionals pricing
services as a percentage of construction cost.
The inclination may be to increase building
costs to inflate fees — this ‘double whammy’
can prove very expensive so it’s best avoided.l Arrange project finance
Speaking from experience, arranging
finance for a self-build project is a tortuous
task. The process is complex, lenders’ rules
seem endless and the scrutiny, at times,
can feel uncomfortable. Don’t be surprised
by the depth of interest in your personal
expenses. Unlike standard mortgages,
where the money is used to buy a house
that already exists, self-build requires a high
degree of money management to build a
home and lenders will want to know you’re
in a position to do this. Lenders will check
bank statements to figure out if you’ve got
expensive habits and hobbies that might get
in the way of keeping the cash flow positive.
It’s therefore a good idea to clean up
spending habits well before embarking on a
self-build project.
Despite the difficulty of navigating the
process, the due diligence employed to
protect the lender is a good thing — and
also serves to protect the self-builder. I’m
sure projects funded through finance ratherRemember, convenience always comes
at a cost and turnkey builders will be more
expensive than self-managing or using a
project manager to oversee the build. This
doesn’t mean builders are expensive for
what they offer but it does mean you should
understand why you need the convenience
they provide before allowing a bigger slice
of your cake to be consumed by taking this
route to build.l Aim for cost certainty
Let’s face it, cost certainty is a utopia
rarely achieved, but it’s worth working
towards. While cost variables have a habit
of swinging both ways, helping to balance
the books, they should never be relied upon
to keep your build solvent. The key to cost
certainty lies with eradicating the likelihood
of the variables in the first place and this
should be done before work starts.
Often, the cause of ‘cost creep’ is closer
to home than you’d think, as the most likely
source of change is probably you, changing
your mind. It’s a good idea to work out a
detailed scope of works and specification
as the process will help you figure out what
you do and don’t want.
A thoroughly prepared scope and spec
will also serve as the basis for contractor
and supplier enquiries. It will provide them
with the information needed to price your
project properly and to do so without the
need for assumption, and for you to build
in contingencies to cover change and
unforeseen costs.
The risk of busting budgets doesn’t lie
solely with the cost of construction either.
Issues can also occur with cost creep
associated with professional services such
as those for architects, engineers and
surveyors. For example, it’s quite common
for architects to be appointed to undertake
the building design but this might only
include the concept design for planning
and not the detailed drawings for Building
Regulations.
It’s a similar story when it comes to
engineering due to the number of different
disciplines involved such as foundations,Cost
certainty
is a utopia
rarely
achieved,
but it’s
worth
working
towardsself-Buildmortgages
self-build mortgages differ
from ‘standard’ mortgages:
for example, funding is
released in stages at key,
identifiable times during the
construction, rather than
on completion of the build.