Register for our Free Membership Area

Our membership site courses cover everything you need to know to build financial security

 How much does it cost to build a house in UK It seems like a simple enough question. Yet when you look at property forums, you'll see a wide range of prices. I've seen them go as little as £400, per square meter up to multiple thousands of pounds per square meter. 

Why is there such a wide margin of prices? It's very confusing.  In this video, I'm going to give you five principles, which will help you understand your costs in terms of building a house. 

So often I have seen cost overruns that have made it extremely painful and stressful for self builders because they run out of money long before the build is complete. Yet they've done their due diligence, they've consulted with people who you would think would know far better, such as architects. Yet my experience is that architects fall into two categories, ones that over promise in what they have designed in terms of what that will cost and two who knew it's right on the money.

So you need to be very careful in having that initial discussion with your architect. When I talked about the context of this video, I said, this was in the 'plan it' phase and the arrange stage. But the reality is that you actually need to know this before you start looking for land. The reason for that is you need to make sure you don't overpay for your land. 

Now I've covered that in another video. So please have a look at that video to understand that concept. But in this video, we're going to talk about five principles, which will help you determine some of your build costs, because that's fundamentally what we're trying to do in this video. We cover this in much greater detail when we'll launch the app.  If you haven't already registered for that, then I suggest you do that. You'll find the link in the header of this YouTube channel, if you're on desktop, and if you're on other device any other mobile or iPad. You'll find also a link in the description of this video.  So the first thing is what's included in the bill cost and this leads to a lot of confusion because some people will talk about the actual bill costs. 

In other words, from foundations to the completion of the job. And then other people will talk about all the costs associated with the build. And that will include from the initial buying of the land, the solicitor's costs to as a developer selling on, in other words, the estate agent's fees and solicitors selling fees, in other words, every cost involved from hiring scaffolding and cleaning plant. So you can see there straight away that there could be some confusion. So you have to define what your costs are and how you're going to approach it. And that's for you to decide how you're going to do that. But my preference is to have a build cost so that I know roughly how much it's going to cost for me to put it onto any piece of land and then have a separate costing for the additional things, because they will vary site by site. 

And I've got other videos on how to assess land properly. And part of that is to do with the plot checklist, and you can get a copy of the plot checklist. There's a link in the description box below which will detailed for you. Some of the other cost implications that you could encounter in buying the piece of land, which is all part of the whole build process and part of the costing, but they will vary from site to site. And it's very important that you know, those before you determine what the price of that site is and how much it's worth to you so that you don't overpay for that. So the second thing we're going to talk about is the build method. Now I'm not talking about in terms of whether it's a timber frame kit or whether this is a block work kit, or whether it's built with brick or whether it's built with straw, whatever variations that you might want to throw into the mix. 

They are obviously cost implications, but I'm talking about how the process of building that house is going to be managed. Now, one end of the spectrum, you'll have a main contractor that you simply turn the whole project over to, and they simply hand you the keys at the end of the build, whether you're a developer or whether you are a self. And then at the very other end of that spectrum, it will have, you as the project manager of it. And as a self builder, perhaps, maybe even doing some of the work, but they will have implications on your build costs. Now, naturally, if you're a developer, you shouldn't actually be undertaking any of the building, cause that's not the best use of your time. Your best use of time is actually finding land for your next project. So, depending on how much of that responsibility, you're going to take into account. 

Now, if you are a developer, you really should be managing the project yourself. And that is time-consuming, let's be honest about this. It's very time consuming because you are going to be ordering all the materials. You're going to be sourcing all the materials. You're going to be negotiating the prices on the materials, and you're going to be subcontracting the labour and the second way you could do it is that you could have supply and fix. In other words you subcontract the labour and have them supply the materials. That's going to add to your costs because they're having to do that project management responsibility of themselves. So they're having to source the materials they're having to order it, invoice it, pay for it, and then reinvoice you. So they're going to add a mark up on there. Generally, you're going to pay 20 to 25% mark up price on those materials. 

Now you might think that's excessive, but actually if you project manager yourself you'll understand how much work's involved. So I wouldn't want to give you any false ideas about this. This is real hard work, but if you undertake the project management role, then you're going to be paid for doing that work. And then as I said in the next scenario, which simply handing the whole project over to somebody and they then complete it, which is going to be the least profitable, most expensive, but depending on your circumstances, that may be what suits you best. Then the third thing that we come into is design complexity. So if we take a rectangular box, that is the simplest structure to build. And in other words, a two story house with a straight roof on it, and inside you just have straight staircases and partition walls. The thing is we've built those type of houses and there were the council houses we built after the second world war. 

And I think you'll agree. They're not very attractive. So clearly, although that's the cheapest method to build, you are probably going to want to build something more appealing than that and if you're a developer, you are most certainly going to want to build something better than that because most people are not going to want to move into that type of house. and if you are a self builder, then you probably got much grander dreams as that's why yourself building in the first place. And you're dissatisfied. What's churned out by the main large building companies. So any time you turn a corner, so if you say, just simply put a T a porch on there, that's going to add to the cost. Anytime you have something poking through a roof structure. So if we imagine that we have a roof here, let's just say these are tiles. 

I need to get light into that. So let's say you're building perhaps a one and a half story house. Then the most cost-effective way to be have is skyline, but, or like a Velux window, however, be far better to have something like a Dorma, which then pokes out, and this is quite intricate and it's time consuming. And so therefore when it becomes time consuming, your labor costs go up. So in terms of the actual design, this is where you have to really understand what the different costs implications are for the different things that you want to do in terms of just the sheer, basic shape of your house. So the fourth and fifth cost implication are finishes. So first of all, we will loot at external finishes. And when you look at this picture here, you will see the lower part of the house has stone work, which is not only expensive to apply, but also expensive in terms of materials and the costing on this particular house for just the stonework itself. 

And then the copings was an excess of 20,000. And then you look at the large cladding and by the time you've actually finished all of this, you're probably talking of somewhere between £30,000 to £40,000 in additional expenditure you back out of that. The cost of putting just a fairly plain finish on there, which would have cost perhaps, £7,000 to £10,000. So in this example, this would have actually cost an additional £30,000. So really depending on how you want to finish off the house is going to have a cost implication. And then we go into the inside of the house. And again, depending on the design of the house and the finishing's that you have placed there will have further cost implications. So in the kitchen, do you have a designer, kitchen, or do you have a fairly standard kitchen Do you prove a marble countertops on the kitchen, in the bathrooms 

Do you have it tiled from ceiling to wall Do you have expensive bathroom fittings, the internal doors, are they just a simple white woods that's painted or do you have Oak finishes, even small things like that will add to your cost implications. Do you have partial Oak or do you have full Oak all of these are cost implications, which could mean that your staircase goes from a few hundred pounds, up to a few thousand pound. So all of these finishes make quite the difference. 

So what you choose inside your house also has cost implications. Now you're maybe starting to see why it's very difficult to give a definitive figure and why you shouldn't rely on just what other people tell you. You really have to get to down to nail these figures down. So is it, you truly understand what the costs are, as I've said before, we're going to be addressing some of these issues in our membership app, once it launches later this year. So if you haven't already subscribed to that, then please subscribe to that know, by going to the top header, if you're on desktop or going to description below where you'll find a link, I hope you found this video useful. It's probably created more questions for you than answers, but I'm sure you appreciate this is a very, very big subject to tackle and it's one that you really have to nail down at the start of your build process. Of course, as you become a seasoned property developer, you will have a good handle on these figures. And while there'll be variations from site to site, you'll at least know what amount you can expect, but it's also why you can't rely on other people's figures because there's too many variables involved. 

Jim J Davidson
Jim J Davidson

Property Developer, Trainer & Coach, Jim's first property investment was an HMO in the student district of Edinburgh in property in 1973. His company Fyneside Developments Ltd. began developing new build residential properties in 2005.

Leave a Reply

Your email address will not be published.