With new planning rules supporting self-builders, lawyer Matthew Fearnside highlights some do’s and don’ts when building your own home.
Teignbridge Council has written a policy into its new local plan which forces developers to free up land for people wishing to build their own homes.
Developers building 20 or more homes will have to make 5 per cent of the site available for sale to self-builders. The council estimates that the policy could result in 400 new self-built homes over the next 20 years.
The policy has received backing by Government – planning minister Nick Boles said:
“I’m delighted the policy is in there. It is a first. It is genuinely groundbreaking stuff. And what it is saying is that there are lots of people who, rather than buy a house from one of the big house builders, would just like to be able to get a local builder and maybe a local architect and design their own. That is a demand that is, broadly speaking, unsatisfied currently.”
In order to meet the nation’s housing requirements an additional 290,500 new homes will be needed each year until 2031. Those building their own homes will make a small contribution towards that goal and although there are many incentives available to help, building your own home is no small task and there is a lot to consider.
If you have found your perfect site, it is important to establish whether or not planning permission is needed or if the existing planning permission is adequate. It is advisable to seek the advice of a solicitor as they are able to find out if the land has any restrictive covenants or easements which may have an affect your plans.
As restrictive covenants are very complex, insurance may be the solution if it is an old one and the person benefiting from it cannot be found. Never buy land at auction without first taking legal advice about title to the property.
With regards to funding your project, you can expect to need a deposit of 25-50 per cent if borrowing from a bank. Banks provide special mortgages for self-build projects where money is made available in stages as the property is built.
It is important to discuss with the bank how the stage payments will be made as well as when – the bank may only agree to release funds at the end of each stage, so you will have to think about how you pay contractors and tradesmen in the those periods. Another aspect worth considering is what might happen if there are delays of overspends – would you have contingency funding?
Input from a range of professionals is required for a self-build project; one therefore has to take into consideration the documentation you need as evidence of contractual arrangements. It may be necessary to employ an architect and/or surveyor to design and manage the project for you, and a lending bank will need to see details of plans and estimated costs before they agree to loan you the funds.
It is fundamental that you are up for the challenge– Grand Designs and programmes are filled with people who struggle with the build and other commitments.
If you are juggling work, family and the demands of building your own home, it may be in your best interests to seek extra help. Make sure you and the people helping you fully understand the contract as well as what is required before entering into contractual arrangements with builders and suppliers.
Seek references at all times and if you need your solicitor to explain any section of the contract, or require them to prepare the contract, do so before an appointment is made.
You will more than likely need to hire the services of a builder and other artisans to get the job done and you may do this under a Joint Contracts Tribunal contract. Ensure they are NHBC registered and properly insured and determine your course of action should they go bust part way through the project. If you are paying them in stages keep checks on how your money is being spent, and secure an agreed process to confirm what work has been done and what it cost.
To ensure that the necessary certification can be obtained during and at the end of the project, it is vital to put plans in place at the beginning of the project.
It is very important that the value of the property is not adversely affected as a result of failure to provide the appropriate certification.
You will be required by your lender to provide various documents and certificates during and at the end of the building process – if you cannot produce these, payment may be withheld.
Matthew Fearnside is a member of the commercial property team at Stones Solicitors, Exeter.