Building your own home starts with acquiring a plot of land.
Once you’ve perused the many plot finder websites, consulted with land agents, auction houses, and scoured the neighbourhood for potential sites to build on, it is only a matter of time until you happen across a piece of land that appears to fit the bill. Here’s what you need to do next.
Inspection and survey
Finding the perfect building plot can seem like looking for the proverbial needle in a haystack, so when you think you’ve found it, make sure you do your due diligence before you crack open the champagne.
This is where an independent surveyor can be worth their weight in gold. A professional plot assessment will give you the best chance of understanding what you are about to invest in, whether you’re paying the right price for it and what literally lies below the surface.
Professional reports, measured land surveys, and topographical surveys provide a map of the land and the key features on it, such as buildings and trees, walls and walkways, underground utilities, watercourses, overhead cables, boundary and access issues and much more.
Also consider a soil test to inform your foundation design and spot any possible signs of contamination, as well as a desktop analysis of environmental matters.
Planning permission is vital if you are going to be able to build on the land, meaning any site that has valid planning consent is going to be much more valuable than one that has either no consent, expired consent, or less than 6 months to go.
Planning permission usually has conditions attached, and it is crucial that you understand their implications before you proceed with the purchase.
Make sure you are absolutely clear about what is and isn’t permitted, and bear in mind that any existing building you are thinking of replacing must be in a habitable state in order to retain its planning status.
Where planning is uncertain or untested, it may be wise buying the plot subject to obtaining new planning consent. In any event, the professional services of a planning consultant and/or specialist property lawyer may be a worthwhile investment.
Financing the purchase
Obtaining finance for a building plot is not as straightforward as getting a mortgage for a standard house. Since the value of the land is tied to its planning status (which is temporary), a lender may agree to 60-80% of the plot’s value, to be redeemed when planning consent expires or with a guaranteed date for the start of the build.
You may also need to provide a personal guarantee, a guarantor or other collateral.
Mortgage applications for self-build homes must be accompanied by detailed information about the build and build route, including proposed materials and costings, valid planning approval with drawings, and robust evidence of affordability by the applicant.
It is highly recommended that you work with a dedicated broker for self-build mortgages who will know the lenders in this specialist market segment, can guide you towards the most appropriate product, and help prepare a successful application.
Agreeing the price
Valuing a building plot is not an exact science. It usually involves working back from the likely market value of the finished build, subtracting design and build costs to arrive at a maximum guide price for the land.
You should use your due diligence to determine your maximum offer price before you start negotiating with the seller, a process that can take many weeks.
If there is a lot of competition for the purchase of the land, it may be difficult to reach a successful conclusion quickly, especially if you need a mortgage in order to proceed.
In some cases, sealed bids may be invited, meaning you get one shot at putting your best offer forward, leaving the seller to make his final choice based on price and purchaser profile.
The legal process
The conveyancing process is carried out by a property lawyer who will follow the Conveyancing Protocol guidelines. They will conduct a series of standard searches on your behalf including environmental, utilities, and drainage searches. Your solicitor will also check the Land Registry title, if there is one.
Given the history of any building plot, the title plans and deed narrative are often hard to make sense of. It goes without saying that you should check the accuracy of the boundary positions and plot dimensions, and that it matches the planning consent.
The title deed may go back many centuries, detailing transfers of ownership through the ages and any legal covenants pertaining to the land. Your legal adviser should alert you to any problems for your intended build arising from this document. Once both parties are ready, contracts of sale will be exchanged and completed, as with any property transaction.