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Cost Of Building Materials?

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Guest The Relaxation Suite

A colleague of mine has recently decided to buy a house in the SE with some land and possibly build another house on it. This will involve tearing up a nice pear orchard and pouring more concrete over England in his desperate bid to make a fast buck from property speculation - even in this market, nothing seems to deter these people.

In pure nosiness, I would like to know how much this might cost. The land in question is 10 metres by 8 in total (32 feet x 26 feet), and this will have to include any outside space around the property. My points of interest are, to those who might have this speciality knowledge:

1) how much just in materials to build a place on this

2) how much a builder is likely to charge to build it

3) on sale of new build or land with planning permission, any taxes I'm not thinking of besides CGT?

I ask because his wage isn't exactly grand, and I'm wondering how much he is stretching in this already dangerously unstable market to do a bit of property speculation. I will add at the end that he will require the consent of at least five neighbours, including access issues even to start.

Thanks in advance, and finally, is it just me who thinks life can be worth-while without property speculation?

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In pure nosiness, I would like to know how much this might cost. The land in question is 10 metres by 8 in total (32 feet x 26 feet), and this will have to include any outside space around the property. My points of interest are, to those who might have this speciality knowledge:

Are you sure he isn't building a wendy house?

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Guest The Relaxation Suite

Are you sure he isn't building a wendy house?

:lol: I thought this. Just had another look at his plot online and I think he could easily take a chunk out of the main property's garden which could potentially make the plot 23 metres by 8, but this would drastically reduce the land on the main house to almost nothing and then the lower selling price of that has to be considered.

Anyone know what the building costs and tax would be on this? I estimate now that the house could be no more than 6 metres wide and 10 metres long (due to light problems with neighbours), so 60 sqm for the house (per floor) with maybe 5 metres long out the back garden and no front garden just parking, say 6 metres long.

In a nutshell, how much for materials for a 60sqm metre per floor three bed house, and how much for a builder to build it? Also, tax on this would be at 40%? Is that CGT?

Edited by Tecumseh

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:lol: I thought this. Just had another look at his plot online and I think he could easily take a chunk out of the main property's garden which could potentially make the plot 23 metres by 8, but this would drastically reduce the land on the main house to almost nothing and then the lower selling price of that has to be considered.

Anyone know what the building costs and tax would be on this? I estimate now that the house could be no more than 6 metres wide and 10 metres long (due to light problems with neighbours), so 60 sqm for the house (per floor) with maybe 5 metres long out the back garden and no front garden just parking, say 6 metres long.

In a nutshell, how much for materials for a 60sqm metre per floor three bed house, and how much for a builder to build it? Also, tax on this would be at 40%? Is that CGT?

Rough cost is £1000/sqm in total if you do a fair bit yourself, £1500/sqm if builder does everything, higher if you go for fancy materials. The costs are rising rapidly for imported materials and forthcoming changes to building regs in 2013/2016 will only make things even more expensive.

Materials is only part of the cost as you can imagine, lots of money to be spent on connecting services, insurance, finance, groundworks, planning/regs/design fees, even if most of the work is done by the self-builder.

I'm renovating a 60sqm outbuilding at the moment so have been looking into all this. Specifications and smart shopping determine costs, I've been getting trade rates and seconds-materials to keep the costs down.

Have they got planning permission? My understanding is that is is very difficult to get for splitting a plot for a separate dwelling.

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Rough cost is £1000/sqm in total if you do a fair bit yourself, £1500/sqm if builder does everything, higher if you go for fancy materials. The costs are rising rapidly for imported materials and forthcoming changes to building regs in 2013/2016 will only make things even more expensive.

Materials is only part of the cost as you can imagine, lots of money to be spent on connecting services, insurance, finance, groundworks, planning/regs/design fees, even if most of the work is done by the self-builder.

I'm renovating a 60sqm outbuilding at the moment so have been looking into all this. Specifications and smart shopping determine costs, I've been getting trade rates and seconds-materials to keep the costs down.

Have they got planning permission? My understanding is that is is very difficult to get for splitting a plot for a separate dwelling.

About £50m^2 if you build it yourself with local materials.

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About £50m^2 if you build it yourself with local materials.

That's the price for paving a drive

might get it down to £50 a sq.m. if you break up the neighbour's garden wall and have the old corrugated roof

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Guest The Relaxation Suite

Rough cost is £1000/sqm in total if you do a fair bit yourself, £1500/sqm if builder does everything, higher if you go for fancy materials. The costs are rising rapidly for imported materials and forthcoming changes to building regs in 2013/2016 will only make things even more expensive.

Materials is only part of the cost as you can imagine, lots of money to be spent on connecting services, insurance, finance, groundworks, planning/regs/design fees, even if most of the work is done by the self-builder.

I'm renovating a 60sqm outbuilding at the moment so have been looking into all this. Specifications and smart shopping determine costs, I've been getting trade rates and seconds-materials to keep the costs down.

Have they got planning permission? My understanding is that is is very difficult to get for splitting a plot for a separate dwelling.

Thanks VMR - no planning permission yet, but I will let you know if he gets it if you're interested. The plot is (just) large enough for two properties but the new build would be quite small and with a tiny back garden. The average new build is 76 sqm, but this would be 60sqm, as yours is. I can't see how it could be any bigger because this would involve building out behind and in front of the neighbour's existing property by quite a long way and would badly affect their light.

1000 psqm seems right to me because I can't see how you could build a three bed house for less than 60k. Just looking at the costs of basics like bricks and concrete are expensive enough and a set of good double glazing is 3k minimum etc, then there's a kitchen and bathroom, roofing and so on, wiring, plumbing, and the services you mention.

If he builds this for 60k though, it could sell for well over 200k given its location and (even) small size. This seems like quite a large profit and I wonder why everyone isn't doing it. Another thread on a similar subject has debated whether or not he would pay CGT on this (some say yes, others no) but he would certainly be liable for 40% income tax if not CGT, no? 200k - 60k = 140k, less fees etc, subtract 40% tax = 84k profit after tax still seems very large for a small build. Am I forgetting anything?

Edited by Tecumseh

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About £50m^2 if you build it yourself with local materials.

Assume you mean £50sq/f? Even then, I think that is a thing of the past.

TBH, I think the cost of materials rising is a big risk to any further house price falls, at least for large new builds. Here in NI, I've started to see developers trying to sell houses for little more than build cost; including the land costs, it would be hard to build it yourself for cheaper now. In may be different in England, mind.

While prices may undershoot fundamental building and land costs, it demonstrates to me that here in NI we are approaching decent value.

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Thanks VMR - no planning permission yet, but I will let you know if he gets it if you're interested. The plot is (just) large enough for two properties but the new build would be quite small and with a tiny back garden. The average new build is 76 sqm, but this would be 60sqm, as yours is. I can't see how it could be any bigger because this would involve building out behind and in front of the neighbour's existing property by quite a long way and would badly affect their light.

1000 psqm seems right to me because I can't see how you could build a three bed house for less than 60k. Just looking at the costs of basics like bricks and concrete are expensive enough and a set of good double glazing is 3k minimum etc, then there's a kitchen and bathroom, roofing and so on, wiring, plumbing, and the services you mention.

If he builds this for 60k though, it could sell for well over 200k given its location and (even) small size. This seems like quite a large profit and I wonder why everyone isn't doing it. Another thread on a similar subject has debated whether or not he would pay CGT on this (some say yes, others no) but he would certainly be liable for 40% income tax if not CGT, no? 200k - 60k = 140k, less fees etc, subtract 40% tax = 84k profit after tax still seems very large for a small build. Am I forgetting anything?

Didn't Tecumseh say 60 sqm per floor. That is 120 sqm in total, a reasonable size for a three bedroom house. Another thing to bear in mind is utilising the loft space. A lot more space for little added cost. I still think in costs per square foot, my ball park figure is £100 square foot. Although I'm now getting used to multiplying by 10 to get the sqm figure.

My present house has a small back garden. Can be an advantage, depends on how you think about a garden, previous houses I lived in had reasonable size gardens, weekends can be quite relaxing now that there aren't a lot of gardening chores to keep on top of.

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Didn't Tecumseh say 60 sqm per floor. That is 120 sqm in total, a reasonable size for a three bedroom house. Another thing to bear in mind is utilising the loft space. A lot more space for little added cost. I still think in costs per square foot, my ball park figure is £100 square foot. Although I'm now getting used to multiplying by 10 to get the sqm figure.

My present house has a small back garden. Can be an advantage, depends on how you think about a garden, previous houses I lived in had reasonable size gardens, weekends can be quite relaxing now that there aren't a lot of gardening chores to keep on top of.

Yeah 120 sqm across both floors. The house would have less than one metre either side of it and a very small back garden. It is just viable, but local asking prices wouldn't support much more than maybe 225k, and that is today. After 18 months of price drops I would speculate the place would be closer to 185k or maybe less. His main residence where he lives has already lost 15k in the few months since he bought it, for example. I know someone who built his own house nearly 20 years ago and if I recall correctly it cost over 40k back then.

If we go down the middle and say it's 1000 psqm to construct, then it's going to cost 120k to build, not 60k as I say somewhere above. He will have to borrow this in full as he already has a mortgage on his main residence at about 75% LTV. If we knock off 20% for the VAT as someone mentions above, then he has to borrow almost 100k to finish the property.

Edited by Tecumseh

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Just built one and I acted as main contractor - came in at £1000 sq m at a good spec. Don't forget those prices per sqm dont tend to allow for services, building regs, legals, NHBC & 3rd party insurance, section 106 etc. For me those costs came in circa £16k. Also I lost about 9 months of my live doing a job whilst chasing subcontractors...

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Just built one and I acted as main contractor - came in at £1000 sq m at a good spec. Don't forget those prices per sqm dont tend to allow for services, building regs, legals, NHBC & 3rd party insurance, section 106 etc. For me those costs came in circa £16k. Also I lost about 9 months of my live doing a job whilst chasing subcontractors...

It's looking like 1000 pqsm is a common figure. Interesting, and thanks. What if he builds it himself? Similar figure? With a full-time job this would stretch the project out massively which is dangerous in a fallin gmarket, so might not be worth it. What price psqm if he has no labour costs, or are these figures presuming that already?

Also, as you have just built one, when you say 1000 psqm, you mean over both floors, so 60 sqm x 2 = 120 sqm and this means 120k for the build plus your 16k extras? Thanks again.

With all this information it looks to me like he is going to need about 135k to put up a reasonable house, factoring 120k construction costs, 15k extras. A house in this location of this size would today sell for perhaps 215k, and I suspect in a year it would be more like 200k. So he gets his VAT returned - 20% of 135k, or 27k. This puts 227k in his pocket. If he borrows 135k at 5% over a year, he pays back 141k. This leaves 86k. Then tax would be 40% of this, which is 35k. This leaves 51k. Knock of 6k estate agent fees = 45k. How come Traktion's NI developers are selling at cost if any old chump can make 45k on a self-build?

Edited by Tecumseh

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Just built one and I acted as main contractor - came in at £1000 sq m at a good spec. Don't forget those prices per sqm dont tend to allow for services, building regs, legals, NHBC & 3rd party insurance, section 106 etc. For me those costs came in circa £16k. Also I lost about 9 months of my live doing a job whilst chasing subcontractors...

If you don't mind saying, how much were the services, regs, legals etc? I suppose it is a length of string question, depending on location, but it would be interesting to know how much for situations where you at least have relatively close neighbours.

I've been pondering self building, but with recent moves in the market in NI, it's starting to look much better value to go with a recent build instead (if it is suitable).

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IThis seems like quite a large profit and I wonder why everyone isn't doing it.

Building single-storey in your garden is generally allowed, it's only subject to building regs if over 30sqm (internal) but you must meet the distance limits from the existing house, boundaries, roof height etc. (conservation areas and AONBs different rules).

The real problem is that planning permission is required if you want to use that building for a separate dwelling. This appears to be difficult to get, I've read many refusals to grant this, you can find some online. The best chance is if the new plot is divided evenly and the new house is similar size to the old house, good access etc.

If anyone is interested in self build costs, look at the Self Build Bible published by Ovolo.

I found a plot with a 130sqm house with 60sqm outbuilding that can be converted. I'm adding a 40qsm carport to the side (allowed), then wait a year (building regs time limit for enforcement action, just in case), then brick in the other two sides to get a total of 100sqm of rentable space.

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:lol: I thought this. Just had another look at his plot online and I think he could easily take a chunk out of the main property's garden which could potentially make the plot 23 metres by 8, but this would drastically reduce the land on the main house to almost nothing and then the lower selling price of that has to be considered.

Anyone know what the building costs and tax would be on this? I estimate now that the house could be no more than 6 metres wide and 10 metres long (due to light problems with neighbours), so 60 sqm for the house (per floor) with maybe 5 metres long out the back garden and no front garden just parking, say 6 metres long.

In a nutshell, how much for materials for a 60sqm metre per floor three bed house, and how much for a builder to build it? Also, tax on this would be at 40%? Is that CGT?

CGT is 28%, payable on the sale price of the property less the costs associated with building it, including the portion of the main property price attributable to the land it was built on, materials, labour, architect and planning fees, estate agent fees, legal fees, loan interest up to the point the building was completed and so on.

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It's looking like 1000 pqsm is a common figure. Interesting, and thanks. What if he builds it himself? Similar figure? With a full-time job this would stretch the project out massively which is dangerous in a fallin gmarket, so might not be worth it. What price psqm if he has no labour costs, or are these figures presuming that already?

Also, as you have just built one, when you say 1000 psqm, you mean over both floors, so 60 sqm x 2 = 120 sqm and this means 120k for the build plus your 16k extras? Thanks again.

With all this information it looks to me like he is going to need about 135k to put up a reasonable house, factoring 120k construction costs, 15k extras. A house in this location of this size would today sell for perhaps 215k, and I suspect in a year it would be more like 200k. So he gets his VAT returned - 20% of 135k, or 27k. This puts 227k in his pocket. If he borrows 135k at 5% over a year, he pays back 141k. This leaves 86k. Then tax would be 40% of this, which is 35k. This leaves 51k. Knock of 6k estate agent fees = 45k. How come Traktion's NI developers are selling at cost if any old chump can make 45k on a self-build?

The £1000/m^2 is after claiming the VAT back. If you get a contractor to do everything for you, they claim the VAT back and don't charge you VAT on their invoice.

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The £1000/m^2 is after claiming the VAT back. If you get a contractor to do everything for you, they claim the VAT back and don't charge you VAT on their invoice.

Thanks jonb - as is probably obvious I know basically nothing about this, although it has raised my interest in having a house built, and now I am more determined to learn about it for that reason.

Detached houses in the area concerned are 230k asking, and more like 215k sold. I suspect our man would be lucky to get 215k for the finished article, so I'll go with that. Your new information (plus others) means that the construction would cost something like 135k, no VAT refund. He would have to borrow the full 135k. A year's interest makes this about 141k, say. This would leave 74k in his hand after the bank was repaid, and after estate agent fees maybe 70k profit. After 28% CGT he would be left with about 50k, which I think is a very acceptable profit for a development of this size. He will have to consider the value lost to the main house though by halving the land it is currently on, plus all the hassle of a development in your back garden.

Thanks to all for the information. This has got me thinking about development. Am I missing anything else?

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Building single-storey in your garden is generally allowed, it's only subject to building regs if over 30sqm (internal) but you must meet the distance limits from the existing house, boundaries, roof height etc. (conservation areas and AONBs different rules).

The real problem is that planning permission is required if you want to use that building for a separate dwelling. This appears to be difficult to get, I've read many refusals to grant this, you can find some online. The best chance is if the new plot is divided evenly and the new house is similar size to the old house, good access etc.

If anyone is interested in self build costs, look at the Self Build Bible published by Ovolo.

I found a plot with a 130sqm house with 60sqm outbuilding that can be converted. I'm adding a 40qsm carport to the side (allowed), then wait a year (building regs time limit for enforcement action, just in case), then brick in the other two sides to get a total of 100sqm of rentable space.

Hi VMR

It would be a two story house, I imagine, not one storey, and about 60 sqm on each floor, or thereabouts. You raise some very good points that would affect this case. First, the proposed build would be no further than two metres from an existing dwelling, and it would be in a conservation area with most buildings in that area dating from about 1870, although there is precedent for development as an old house next door split the land and built one on it in the 1970s. The proposal would involve about a third of the plot being split off, and the new house would half the size of the main property.

A house down one of my old streets split their garden and built a development 4.5 metres by 7 metres with a triangular garden - thoroughly awful and tiny property but given the go ahead no problem. With this in mind I can't see why he wouldn't get PR for this development. He's one of the luckiest people I know - if he put his hand down the toilet he'd pull out a box of chocolates.

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The recent change to PPS3 takes garden land out of the previously developed land bracket , so obtaining planning on such a site will be more difficult than a few years ago and if neighbours complain then it is more likely to be refused due to local members possibly calling the application in.

If you say the house is 120sqm roughly 1280sqft you will generally get a decent product for £110ppsft this will include a provisional sum of around £6,000 for the supply and fit of a kitchen and around another £5,000 for the supply and fit of bathrooms.

This is of course assuming that the ground conditions are fine.

This gives a build cost of crudely around £140,000.

Then depending on how strict the authority are with renewable energy conditions you could then pay another £10,000 should the authority seek CO2 consumption to meet Code level 4.

The generally the new discharge of conditions leads to around a further £2,000 for a one of house to include walkovers and historic investigations along with things like a landscape plan etc etc .

Gas electric and water equate to around £2,500 per dwelling at present.

The should the authority have structure for charging for things like play space, road improvements etc you then have to pay towards this in a legal agreement.

The cost of this agreement will be around £1500 for your solicitor along with £1500 extra as you will have to pay for the councils legal costs.

If you employ and agent fees for a house will be roughly £2,000 for a planning application with a further £2,000 for building regs then if you only need a few construction detail this will be around £500 per detail.

The engineers drawings are roughly 1.5% of the build so say £2000 here.

So far we are at £162,500 . With one detail which is not a lot and things like SAP calcs the cost of cash are not included.

Then take into account the diminished value of the house with a smaller plot and add this onto the £162,500

So if the house is worth say £50,000 less with the shaved off plot then the house built will owe him up £212,500

I would take these sums as a base case as many authorities now require affordable housing payments on each and every new build.

This shows that house building will not happen in many areas and probs not for your mate.

If you tell me the authority these costs could be more specific

He would be best off selling his pears from his trees by the side of the road as this may make more cash!

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Guest The Relaxation Suite

link

One of the first things the tories did was to try and stop garden grabbing. PP will probably be very hard to come by. I would object if I was a neighbour and it was blockin my light.

Thanks Soton and Papa Serf

Interesting link as well - I had no idea they changed the law on this and I fully support the change because these garden splits are putting population density through the roof and ruining the environment at the same time. It certainly lookes like the person in question is facing more obstacles than I originally thought. First, he has to get it past much stricter planning laws, second, there are at least five neighbours who can complain, one of whom will have serious issues with light, and third, it looks like the cost of construction plus a falling housing market could make the profit so small that this project might easily turn from money spinner to money pit in a heartbeat.

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This song is dedicated to you

Thanks for the compliment :D . Fact is, who wants a world where all the gardens have been turned into over-priced rabbit hutches? I know placesin Britain and Australia that have been totally annihilated by this kind of development. Nice districts turned into shitholes because of irresponsible planning permission being given out like smarties and pop density goes up and up. Nowhere for all the new cars. Nowhere for all the kids to play. I know one street in the UK where someone "grabbed" their garden and turned their detached into a semi by building a 60 sqm (both floors) and selling it for £175,000 and the garden is a triangle. This should never had been given permission to go ahead, and hopefully these news laws will stop this sort of thing happening. You can only ****** this world up once.

I support this Tory policy of redesignating gardens to greenfield sites and making it much harder to trash them for a few quid.

Edited by Tecumseh

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Also , dont forget to use the internal M² , this is the measurement used to price build costs not the external measurement.

The differnce is around 15%

Cheers

D

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The gross external is the area used to price new build for reasons such as external walls.

The gross internal is only used for conversions as external walls exist.

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