Expensive quotes for new build?

Hi Jane,

Out of interest can I ask what the total costs to build might be including the value of the land if you were to sell it and then the final value if the project is completed?

Good point Neil. Presumably the value of the existing house being built on to will be reduced.

One way is to use a builder who is not VAT registered and then pay for materials and pay his subbies directly so he does not go over the VAT threshold. A lot more paperwork and hassle for you and you will be dealing with a builder for whom your project may be the biggest he has done. In addition, if he has mis-priced the job and later defaults he may not be worth suing and it will likely cost you far more than the £20K saving to complete the job.

Whereabouts in the country are you £1500/m2 would be pricey for some areas but not bad for others.

Biggest single cost saving you are likely to be able to make would probably be to project manage it yourself, but that potentially creates a rather large workload and may the loose you the option of a fixed price deal too.

I think you can claim most of the VAT back from HMRC on a new build, that was the case some years ago, not sure if it is now, perhaps someone else might know.

you should check but I don't believe you should be paying a builder VAT on a new build if he's doing the lot anyway.
If you're using subs it gets more complicated.
There should be no VAT on supply and fix items from subs either although they will tell you different.
£150/ft2 doesn't sound a million miles away for a small house in this climate.
Easy way to get costs down is to manage it all yourself.

Thank you for all your comments and here is a bit more detail
*in South East
*the land was part of a large garden on an existing btl. No real down value in existing house price as garden will be same size as all other houses in area
*if I was to sell house would get £185k approx
*if I was to sell land with pp would be in region of £50k

There is not alot of pounds in this but I am happy to increase my rental stock with a new build.
I understand if I project managed myself and sourced my own materials would save alot but do not want to project manage and am happy to source some materials as long as doesn't hold up build. Met with builder today who I could work with and he is going to revisit his quote, is happy for me to source kitchen. He is also going to give me a price for a timber framed house which will be brick exterior and timber frame inside. Would be interested in your views on this particularly when I sell on whether this would be an issue for mortgage companies.

Thank you

Have a look at the self build magazines. Here is one: http://www.self-build.co.uk

On their calculator an 80 sq/m 2 bed house in the south east will cost £120k if fully done by a builder, or £71k if you do 75% of the work yourself.

I would look into project managing the site and you will save at least £30k.

Timber frame is quicker and mortgage companies are fine with this type of build as it is pretty standard construction in the UK. Brick and block is slower, but builders are used to doing this work, so it often costs the same as a timber frame.

Because it is a new build do look into all the energy saving options as you have the chance to incorporate all those expensive retro fit ideas (solar, ground source heat etc) much cheaper. This will add value to the build, or if for rental you could charge more rent if energy was much cheaper for the tenant.

No VAT payable on new build. You will have to pay it on all purchases, but you should get a cheque from the tax man at the end of the job for all the VAT paid.

A couple of things to bear in mind.

Ensure your builder has current NHBC or equivalent 10 year guarantee or you won't be able to remortgage or sell the property within the first 10 years.

Whoever project manages the build will have to be up to date with all the latest building regs. Strangely often times the individual tradesmen are not. My husband is an experienced builder and has had to pull people up on various issues that would have seen the work having to be redone once the building inspector had examined it. Also have photos taken to show construction methods used and that building regs have been complied with before covering things up to answer any queries by the building inspector.

Best of luck

It seems to me if all the builders have come in at a similar price then that is what the job will cost. It always infuriates me on Grand Designs when the participants say the house will have to be built for £250k as that's all they've got and it's clearly going to cost £300k. Then they are shocked when they run out of money. Wishful thinking will never replace market rates sadly.