Month: June 2020

why self build

1.3 why self build

1.3.1 pull factors and push factors

when considering whether to self build, or perhaps, whether self build is for you, there are various push factors (motivations for self build) and pull factors (benefits of self build) that you may want to consider.

1.3.2 a lack of good alternatives

in our option (one shared by 75% of home buyers), the majority of new building housing in the UK is not only poor quality but is also generic, uninspiring, and outdated. why is this? well the majority of new build housing is built by large speculative housing developers. in fact, about two-thirds of housing completions are built by only the ten largest housebuilders. numerous government reports have made the assessment that this lack of competition has resulted in poor productivity and a lack of innovation in the industry. you only have to look at the appearance of most of the housing built to see what we mean. they all look the same. on the outskirts of practically every town and city up and down the country there are identikit housing development that are; traditional in style, of brick construction, with uPVC windows, and pitched roofs. the above observations are reflected in buyer attitudes towards new build housing. a report published by the RIBA Future Homes Commission in 2011 reported that 75% of UK home buyers wouldn’t buy a new build home. we rest our case.

1.3.3 value for money

the speculative business model adopted by most housebuilders favours the production of short-term exchange-values (i.e. house prices) rather than long-term use-values (i.e. the quality of those homes as places to live in), as their priorities lie in dividends for their shareholders rather than the quality of life of their customers. what’s worse is that the problem gets worse over time. while house prices (exchange-values) have rocketed over the past decades, use-values have remained virtually the same, and thus value for money has decreased significant over time. the size of the homes built is a good example. with an average floor area of 76m2, we build on average the smallest houses in Europe, and yet they are still sold for absurdly high prices. in contrast, self build is a form of housing procurement that by its very nature prioritised the creation of long-term use values over short-term exchange values because the end users have a stake in the quality of the homes build as places to live in.

1.3.4 unmet needs and wants

we have also made the observation that there is an insufficient variety of homes being built. most speculative housing developments typically consist of three or four bed homes designed with the traditional nuclear family in mind and apartment blocks of one and two bedroom flats for first time buyers. we believe these house types do not cater for large segments of the market which is far more varied that it was decades ago as households compositions have changed. there is now a diversity of households including; single-person households (29%), single parent households (11%), and multi-generational households (7%). perhaps you have found yourself in a house that does not meet your needs. perhaps you have looked on the open market and you are struggling to find anything else that ticks you boxes. perhaps you have a disability or need a home that can accommodate multiple generations of your family.  if this is you, we gently suggest that self build might be for you.

1.3.5 better quality of life

we passionately believe that well-designed buildings can improve our quality of life, and that the quality of our housing, as the most basic of building typologies, has the most direct impact our quality of life – for better or worse.

1.3.6 opportunity to build something unique and bespoke to you

this is the pull factor that is widely promoted by advocates of self build and it is true. you can build whatever you like and we have all enjoyed episodes of Grand Designs where adventurous souls have built all manner of unique and sometime peculiar homes including; a real cave home, a converted water tower, a house boat, and a restored castle. that being said, we actually don’t think that being unique is the most relevant reason to self build and we would probably put this bottom of this list of reasons to self build.

1.3.7 opportunity to build better

we are passionate about the opportunity to better homes and would certainly put this reason close to the top of the list. over the past decades, a number of Modern Methods of Construction (MMC) have been developed that offer superior performance when compared to traditional construction. these typically utilise at least an element of prefabrication to achieve faster more efficient construction, and higher standards of quality management, as well as more sustainable and eco-friendly homes which also boast low energy bills for end-users. in the last few years, there has also been rapid growth of a new tech based sector developing smart home technologies from smart door locks to smart thermostats and security systems. these systems not only change the way we interact with our homes but also enable greater efficiencies such as being able to turn off the house at night. there is also a growing awareness regarding the need to specify healthy homes by paying careful attention to how products that make up a home affect indoor air quality and the health of occupants. there is lots more than can be said here and these opportunities will be discussed in greater depth later.

1.3.8 profitable

self build can be not only a cost effective option but can also be very profitable. With no or low stamp duty, no VAT on the build cost, and no developer profit – the total cost of self builds are typically up to 30% lower than the end market value. You typically have to live in the house for 3 years after completion otherwise you are classed as a developer and need to pay a Community Infrastructure Levy (CIL). further details will be provided in section 1.6.

1.3.9 become part of the largest housebuilder in the UK

self build and custom build represent the democratization of housebuilding. statistic show that in the financial year 2016-2017 the self build and custom housebuilding sector delivered 12,950 new homes, making it the UK’s fourth largest housebuilder at the time behind Barratt (17,319), Persimmon (15,171) and Tayor Wimpey (14,112). The sector has been growing at a rate of 6.25% annually and with the added impetus of the recent self build legislation, the National Custom and Self Build Association (NaCSBA) has forecast that the sector could reach 20,000 new homes by 2021. this could potentially make the sector the largest housebuilder in the UK.

who can self build

1.2 who can self build

1.2.1 available to the many, not just the few

while the TV show Grand Designs has been fantastic in that it has popularised self build, our observation is that it has also proliferated an idea that self build is only for the wealthy and the adventurous. this is a concept that we at protaHOMES want to combat as we strongly believe that self build can be and should be more widely accessible. the chair of the National Custom and Self Build Association (NaCSBA), Michael Holmes, said that self build should be:

“a choice available to the many, and not just the few

1.2.2 wealth

on the wealth point, we are not saying that a wealth imbalance does not exist, because the statistics show that the majority of self builds are funded by savings alone or by significant equity in existing homes. clearly having lots of money helps, but it is possible for those without access to significant capital of their own to self build with financing. if this is your case, you will typical need at least 5% of the build cost for a deposit and a fairly decent household income.

1.2.3 income

statistics show that the average (median) household income for self builders is £50-59,000 (i.e. within the top 20% of the population by household income), however there are ranges of income levels. 30% have household incomes below £40,000 but a many in this income bracket are retirees with fairly significant accumulations of wealth in either savings or housing equity. furthermore, there is some variation when it comes to the type of self builder. the average household income of a DIY self builder is £47,261, while the average household income of a self builder using a main contractor is £102,242.

1.2.4 age

statistics show that the majority of self builders are older. The age band with the most self builders is the late 40s. the age band with the highest proportion of self builders is late 50s to the early 60s.  the average (mean) age is 51 years old. Less than 5% of self builders are in their 20s.

1.2.5 first time buyers

while there are significant barriers to entry, self build is an option for first time buyers. with younger self builders typically being more reliant on borrowing, the size of the deposit required is the first hurdle. deposits for self build projects are typically higher than one would need for the purchase of starter homes, because while the latter are typically flats within apartment buildings, most self builds (91%) are detached houses. having made this observation, this does not mean that this is the way it has to be. there are a number of approaches that first time buyers who want to self build can take and these approached may well make self build a more feasible option that buying a property on the open housing market. consider building smaller, thereby reducing the build cost and in turn the size of the deposit required. consider collective custom build, perhaps banding together with some friends to commission the building of your own apartment building. consider doing some or all of the building work yourself to reduce the costs self building. there are lots of options and first time buyers should not be put off by apparent hurdles.

1.2.6 active third agers

we have also observed that there is a significant market for homes specifically designed for active-third agers, those approaching and/or of retirement age who are still physically and mentally active, and who also often have significant capital as the outright owners of 4 or 5 bedroom family homes that are too large for them now that their children have all left home. while downsizing and perhaps upgrading is an attractive proposition, the speculative housebuilding industry does not sufficiently serve this demographic. this leaves self build as a very compelling option with the scope to create a bespoke home that not only meets your needs in the short term but can also be future proofed to meet your needs in the long-run.

1.2.7 serial self builders

one special category of self builder are those who don’t only undertake the feat once, but perhaps after building the first self build, decide that they so enjoyed the process that they want to do it all over again. Sometime referred to as ‘serial self builders’ some of these do so in order that they can end up mortgage free after 3 or 4 self builds, while others undertake the challenge essentially as small developers – meaning they make a living from self building.

1.2.8 groups

you don’t have to build on your own. instead you can build as part of a group. as defined in 1.1.4, self building in a group is referred to as “collective custom build”. please refer to 1.5.2.6 for further information.

1.2.9 couples

statistics show that 90% of self builders do so as a couple. being in relationship with two decent incomes combined offers greater access to self build mortgages due to the constraints of affordability calculators. in addition to this, the mutual support from build as a couple should not be under-estimated. As the saying goes “one will chase a thousand, two will chase ten thousand”.

what is self build

1.1 what is self build

1.1.1 dictionary definitions of self build from Collins Dictionary

1. the practice of building one’s own home (noun)
2. a house that one has built oneself (noun)
3. built by the occupant or involving building by the occupant (adjective)
4. to build a home for one’s own use (verb)

1.1.2 the legal definition as defined in the self build act 2015

the Self-build and Custom Housebuilding Act 2015 (as amended by the Housing and Planning Act 2016) provides a legal definition of self build and custom housebuilding. The Act does not distinguish between self build and custom housebuilding and provides that both are where:

‘individuals or an association of individuals, or persons working with or for them, build or complete houses to be occupied as homes by those individuals.’

the government goes on to say that in considering whether a home is a self build or custom build home, relevant authorities must be satisfied that the initial owner of the home will have primary input into its final design and layout.

1.1.3 what is custom build?

well during a debate in parliament back in October 2014, the housing minister at the time, Brandon Lewis, said:

‘the definition of self build covers someone who directly organises the design and construction of their new home, while custom build covers someone who commissions a specialist developer to help to deliver their own home.’

while the use of two terms makes a distinction between custom build and self build, the former could be said to be a type of self build, with self build being a broader, more encompassing terms, and custom build being narrower, more specific term.

1.1.4 what is collective custom build?

the government’s definition of self build and custom housebuilding also alludes to another type of self build – that by an association of individuals. this type of self build has referred to as collective custom build, a form of self build where groups of people come together in order to provide their own homes collectively or as part of a multi-unit site. some view this form of self build as the most viable way to scale up self-provided housing as a mainstream procurement route of new build housing in the UK. The term ‘self-provided housing’ is another perhaps more generic and appropriate term that encompasses all forms of self build.

1.1.5 our definition of self build

to self build therefore doesn’t necessarily mean physically building your own home. rather self-build is more broadly understood to mean that you have some involvement in the building of your own home. furthermore, there are different types of self build with varying levels of involvement and also the possible possibility of self building with others.

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