A guide to self build

November 2016
 1. Project planning
Steps to A clear vision of what needs
to be done, when it needs to

Self Build be done, who is going to do it

and what it is going to cost is
essential. You should always

Success include a contingency – at least

10% of your overall budget is
prudent. This money should
only be used for unexpected
As a leading costs during the project,
provider of self build such as additional foundation
and renovation requirements or unavoidable
delays. If you still have the
mortgages, we’ve contingency at the end of
helped many people the build, you can consider
realise their ambition upgrading interior finishes or
landscaping schemes.
to build their own
dream home. We
understand the
entire self build "include a
process from start contingency
to finish, so you can
rely on the Melton to - at least
help. This guide will 10% of your
give you a valuable
insight into the key overall
steps involved. budget"
2. Finding a building In areas of high house prices, it
plot or property may be worthwhile purchasing
a poor quality house and
for renovation/ then demolishing it to create a
conversion building plot.
Finding a suitable building plot For example, some areas have
can take time and patience, poorly built bungalows on
however, online resources such fairly large plots surrounded
as Plotsearch are a good place by larger houses. However it’s
to start. Estate agents can also always worth speaking to the
be helpful, but you will need to local planning office to guage
contact them regularly to keep their attitude to this type of
your name front of mind. development.
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It’s advisable to obtain a survey the day of sale with the balance
of the land. Your solicitor will due within 28 days. Therefore,
be able to report on any issues finance must be in place before
concerning the suitability of the the auction. Not all lenders
land for purchase including: will lend to buy the land so it’s
• Checking what is likely to important to check – some
happen to land that is in the building societies, such as the
vicinity of the plot Melton, do lend to acquire land.
• Finding out if utilities (gas, If the cost of the building plot
water, electricity and phone) does not exceed £125,000
are connected or in existence Stamp Duty is not applicable.
nearby
• Ensuring that the plot is not on
a flood plain or other potentially
damaging watercourse
• Ensuring that brownfield sites
do not present unforeseen
problems that are connected
to its previous use eg chemical
contamination arising from a
historic industrial use
• Checking that the land is not
legally subject to any restrictive
land covenants or ransom
strips (where somebody
retains ownership of a section
of the plot that materially
affects its use or access).
Many development plots are
sold via auction where a 10 per
cent deposit will be required on
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3. Design your home
One of the most exciting stages
“negotiate
of building your own home is
the opportunity to have some
input in the design. We all
a fee at
have our own ideas of how we
would like our home to look
the very
and feel, but only a few of us
will enjoy the chance to actually
participate in the design.
beginning”
Design is one of the most
crucial elements in building The costs of architectural
your home and time should services will vary according to
be taken to learn the various the level of involvement, and you
options that you have in terms should negotiate a fee at the
of style, materials, heating,
very beginning and have the fee
insulation etc. in order that you
and what it covers confirmed in
can incorporate as many of your
writing.
own ideas into the plans as
possible, bearing in mind your Some Architects are members
budget, the feasibility of your of the Royal Institute of British
ideas and the wishes of the Architects (R.I.B.A.), but all
local planning authority. working in the UK must be
Most self builders will want registered with the Architects’
to appoint a qualified and Registration Board (www.arb.
experienced architect to follow org.uk). Qualified Architectural
their brief and design the house. Technologists also provide
An architect can support the services in helping with house
whole project, handling statutory design, contact the Chartered
requirements such as planning Institute of Architectural
permission and building Technologists (www.ciat.org.uk)
regulations. for further details.
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4. Choose a building The Main Self Build
approach Construction Options in
the UK
Many first time self builders
choose to use a package Some lenders may
company to guide them through only consider certain
the design and build process. construction types, so it’s
These companies usually offer important to check with
customisable standard houses your lender.
as well as a bespoke design
option. Other self builders prefer Timber Frame
to use an architect and main Timber frame buildings
contractor or professional project are very popular with self
manager. Many like to project builders and growing
manage the build themselves, in market share among
with a view to saving money by commercial developers
keeping a close eye on labour in England and Wales.
and materials. Oakwrights is one of the
leading providers of oak
frame buildings,
Visit www.oakwrights.co.uk
for further information.

Brick and Block

The most conventional
commercial building
method in the UK, with
an inner skin of concrete
blocks, an outer skin of
facing bricks and a layer of
insulation between the two.
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Steel Frame Environmentally Friendly
This self-build construction Incorporating energy efficient
option is popular in the US features is often a priority for
but rare in the UK. This option self builders. Some mortgage
will almost certainly require providers, such as the Melton,
you to purchase a kit on a
offer a self build mortgage with
supply and fit basis and your
a special discounted rate which
choice of design will be limited
to those offered from the kit recognises investment in energy
manufacturer. efficiency. The Melton’s Eco
Mortgage is available for self
Alternative Building build projects, renovations and
Methods conversions.
These include Beco, Styrostone,
Structured Insulated Panels
(SIPs) and timber clad.
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 5. Planning
Permission
Early contact with the planners
is the best way to establish
whether your project is viable.
Most local authority planning
departments offer ‘pre-
application advice’ (some will
charge for this service). This
can help you get a strong idea
of what your planning officer
will and won’t accept in terms
of general style, size and any
materials stipulations. It’s a great
way to make sure you stand the
best chance of getting planning
permission when you come
to submit your application.
When you locate a suitable
plot of land make sure you
have obtained Outline Planning
Permission (OPP) before
committing to the purchase.
OPP is simply permission for
the principle of development
on a site. This means that the
details of the size, dimensions,
materials and access can be
decided at a later date. If a plot
is granted OPP, you will still
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need to make a supplementary as they will need to send out
application for full planning an inspector to view the plot
permission at a later date to assess the suitability as
and no building work can be well as release details of your
undertaken on OPP alone. application so that objections
OPP status is usually valid can be lodged. The details of
for three years at which point the planning charges and the
re-application will need to be separate building inspection
made. charges can be obtained from
Next you will need to lodge the your local council.
plans with your local authority A fee calculator is available
planning department to obtain
on the Government’s online
detailed planning permission
planning and building
and building regulation
regulation resource,
approvals. Your local authority
will charge for these services www.planningportal.gov.uk.

7
 “early contact with your
planning officer is the best
way to establish whether
your project is viable”
The council should decide on will depend on the impact of
your application within 8 weeks. the development and the type
Detailed Planning Permission/ of area but it will always include
Full Planning Permission local neighbours. This process
(FPP) outlines exactly what normally lasts 3 weeks.
is going to be built including Once the local authority has
dimensions, room layouts and received all the necessary
building materials. As soon as responses, the planning officer
FPP is granted building work will assess the proposal against
may commence. Sometimes the local authority planning
conditions of approval will be policies. The planning officer
attached and these must be will then make a decision
complied with during the project. regarding the application or
Detailed planning permission is a recommendation for the
valid for three years. planning committee.
In most instances a simple If there is a problem with your
planning application never goes application, the Planning Officer
to a planning committee and may contact you to try and
instead is decided at officer resolve it. If it is refused, you will
level. This is followed by a period need to re-submit an amended
of public consultation about the proposal or appeal against the
application. The extent of this decision.
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6. Building
Regulations
Most building projects have
to comply with building
regulations. For example, you
will need to comply if you put
up a new building, extend or
significantly alter an existing
one (eg converting a loft
space into a living space). You
may also need to comply if
you want to install services or
fittings in a building, such as
replacement windows, toilets,
sinks, or hot water cylinders,
or if you change the use of
a building, since the new
use may mean it does not
comply with the appropriate
regulations.
If you are unsure whether the
work you want to do needs to
comply, contact the building
regulations department of your
local council. They will also
be able to advise you about
the requirements that apply
to the work you want to carry
out and what procedures you
need to follow.
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The primary responsibility for Complying with building
complying with the regulations regulations is a separate
belongs to the person carrying matter from getting planning
out the building work. So if permission for your work. In
you are carrying out the work the same way, receiving any
personally the responsibility will planning permission is not
be yours. If you are employing the same as taking action to
a builder the responsibility will ensure that it complies with
usually be that firm’s, but make building regulations.
sure you confirm this position Useful information about
at the very beginning. If you planning and building
are the owner of the building, regulations can be found on
it is ultimately you who may be the Government Planning
served with an enforcement Portal website,
notice if the work does not
comply with the regulations. www.planningportal.gov.uk.

“complying with
building regulations
is a separate
matter from
getting planning
permission”
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7. Arrange finance Most build projects can be
broken down into 6 key stages:
Self build projects require funds
to be made available in stages • Purchasing the land
as the house is being built. The • Initial project costs and laying
Melton is one of a few lenders foundations
who will also lend to purchase • Construction to wall plate
the land with outline planning levels (and timber frame
permission, as well as releasing erected if appropriate)
funds in advance of each build
stage - the Melton Advance Self
• Building made wind and
watertight
Build Mortgage. The Melton
also offers a Standard Self Build • First fix and plastering
Mortgage which provides stage • Second fix through to
payments in arrears. completion.
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TYPICAL EXAMPLE
A typical example of a cashflow budget (for illustrative purposes
only):

Purchase of land £130,000

Initial site clearance costs and laying foundations £35,000
Construction to wall plate (& timber frame) £40,000
Wind & watertight £20,000
First fix and plastering £15,000
Second fix to completion £48,000
Sub total £288,000

In addition, there are also the following costs to take into

consideration:

Architect & project management fees £25,000

Survey, planning, finance and other
associated fees £5,000
Buildings warranty insurance £1,250
Contingency fund £33,000
Total budget (including plot) £352,250

Many self builders use their own savings to help finance their project,
so in this example if the self-builder is using £75,000 of their own
money and the estimated value of the final project once completed is
£500,000, the funding requirement in this example will be £352,250 -
£75,000 = £277,250, representing 55.45% loan to value (LTV against
the final value).
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How does the Melton Melton’s affordability and eligibility
assess a mortgage requirements).
application for a Self builders can have their
mortgage on an interest only
self-build project? basis during the build period –
The Melton Self Build Advance this is particularly helpful if you
Mortgage will provide self-build are living in a rented property
mortgage funding up to: during the build. On completion
of the build the borrower must
• 85% of the purchase price of convert to a repayment mortgage
the land and may transfer existing
• 85% of the build cost (subject borrowing to another mortgage
product with the Society without
to loan to value ratio not
incurring any early repayment
exceeding 75% of final value) charges (subject to eligibility).
Based on the example, a The Melton charges an
Self Build Advance Mortgage application fee of £500 and
application for £277,250 is a completion fee of 0.5% of
acceptable as it represents the loan amount for self build
55.45% of the value of the mortgages. Other terms and
finished property (subject to the conditions apply.
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What do you need?
When submitting a mortgage
application to the Melton,
borrowers will be required to
provide:
• Copy of planning permission
and building regulations
approval for the project
• Copies of architectural
drawings.
• Breakdown of the work to
be undertaken and details of
who will be doing the work
• Details of the projects How does the
costings and cashflow
projections. mortgage drawdown
• An NHBC certificate or process work?
equivalent warranty and this Once a mortgage application
should be applied for before has been approved, the Melton
building work commences will agree a schedule of payment
as the warranty provider will drawdowns with the borrower.
need to undertake their own The Melton’s Self Build Advance
inspections at key stages mortgage releases money
throughout the build process. in advance of each stage,
• The Melton will also require including the cost of purchasing
documentation to support the the land – this can be extremely
application in the same way helpful for cashflow. The Melton
as any regular mortgage eg instructs a local valuer to inspect
payslips, bank statements, the building work at each build
ID, proof of rent/mortgage and payment release stage until
payments, proof of deposit etc. the building is complete.
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8. How can you help you buy your plot of land
qualify for a self (Self Build Advance). Detailed
Planning Permission must have
build mortgage?
been granted and approved by
To qualify for a self build the Society before any stage
mortgage, your project must releases can be made.
meet the following criteria:
Building Regulation Approval
Outline Planning Permission must have been issued and
must have been obtained approved by the Society before
before we can consider your building work starts and before
application and before we any stage releases can be made.
can release the initial funds to Site insurance must be in place.

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9. Other Costs to this valuation is not passed on
Consider to you. You may therefore also
wish to have an independent
As the buyer of the property, you valuation carried out by a
are responsible for completing professional surveyor for
the land transaction return and your own use and purposes.
paying the Stamp Duty Land Mortgage lenders will normally
Tax. Your solicitor or licensed also charge you for each re-
conveyancer will usually handle
inspection and valuation as the
this for you and send it to HMRC
different stage payment points
on your behalf.
are reached. As there can be
Valuation Fees quite large variations between
Mortgage lenders will conduct different lender’s charges,
a survey and valuation of your you should seek information
land for their own records and, about these before deciding
even though they charge you which mortgage may be most
for this you will normally find that suitable.

“It’s important to
arrange adequate
insurance”
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Planning Fees Insurances
You should expect to pay It is important to ensure you are
fees for drawings and plans adequately insured. Self build
prepared by architects or other insurance policies are available
professionals. You will also and can provide cover for:
have to pay the normal council • Public Liability Insurance -
charges for planning permission, This covers legal liability for
and for building regulations claims made by any other
approval and inspections. person or body in respect of
These costs can be obtained on death, injury or loss arising
request from the local council. from your building operations.

Mains Services • Employer’s Liability Insurance

- This is a legal requirement
If you have purchased a plot
if you are employing anyone.
of land that is not already
This can also be a factor if
connected for mains services any sub-contractor working
like electricity, gas and water, for you has an accident
you will need to budget for these on site where your duty to
to be provided. Depending provide a safe working site
on the distance to the nearest could be called into question.
services these charges can
• Contracts Works Insurance
be considerable, and we - Protects against losses
recommend you establish these through theft, vandalism,
early in your project planning by structural damage, fire, flood,
contacting the electricity, water storm damage, damage by
and gas companies. They will delivery vehicles, etc.
have plans of where the nearest
• Other insurance - You may
infrastructures exist and should also require special additional
be able to provide estimates of cover on occasions when any
costs and the length of time to specialist services are being
establish a connection (this can provided on site by third
be considerable in some areas). parties.
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10. Value Added Tax
Self build homes are exempt
“Make sure
from VAT, as are non-domestic
buildings with Planning
Permission for conversion
you keep
receipts
into homes and certain listed
properties. You should be
able to reclaim your VAT if you

for all your

are doing a self build project
or converting a non-residential
property eg a barn or a

purchases”
windmill. Make sure you keep
receipts for all your purchases
as you will need these to make
your claim.

“Don’t 11. And finally…

With building work complete

forget to
and the interiors finished, you’ll
be ready to move in to your
dream home. There are a

obtain the
few important practicalities to
consider – such as obtaining
the Completion certificate from

Completion
building control, ensuring any
small issues are dealt with as
part of the ‘snagging’ process

Certificate”
and making that all-important
VAT reclaim.
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WHY CHOOSE THE MELTON?

Choosing a mortgage provider is one of the biggest financial

decisions most people are likely to make. With so many
mortgages available, how do you choose the right product
and the right lender for you? We’ve put together some tips
to consider:

• Take a look at comparison tables but remember rates

aren’t the whole story, you need to consider factors such
as fees, introductory periods and terms of the loan.

• If you already have a mortgage, find out what your existing

lender can offer, lenders such as the Melton offer rewards
for loyalty.

• Brokers will give you advice on choosing your mortgage

from the whole of the market, most banks and building
societies will only give advice about their own products.

• Most brokers will charge you a fee or earn commission for

the products they sell.

• It’s a good idea to choose a lender which offers a

personal service so that you know exactly who to talk to
when you need help - Building Societies have a good
reputation for this. The Melton, for example, looks at
each case on an individual basis and provides manual
underwriting.

• If you’re looking for a self build mortgage, you need to talk to

a smaller lender that can offer flexibility and ideally a lender
with experience of self build finance such as the Melton.
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Compare the Melton’s Self Build Mortgage Schemes

ADVANCE STANDARD
Can I borrow to
We will lend to purchase the We will lend to purchase the
purchase land
land with only outline planning land with full planning permission
for my Self Build
permission required. required.
project?

How much can I We will lend up to 85% of the land

We will lend up to 75% of the land
borrow for my Self and build costs providing it does
and build costs.
Build project? not exceed 75% of the end value.

Funds released in advance of Funds released after each stage

When can funds be
each stage of the build (Subject to has been completed (Subject to a
released during my
a satisfactory reinspection at each satisfactory reinspection at each
Self Build project?
stage). stage).

How much of my
Lower upfront costs as the funds Sufficient savings required to
own funds will be
will be released to purchase the purchase the land and fund the
required to start my
land. early stages of the build.
Self Build project?

What is the
maximum loan I Maximum loan £350,000. Maximum loan £500,000.
could borrow?

What interest rate Please refer to our Mortgages from Please refer to our Mortgages from
will apply to my Self the Melton booklet or visit www. the Melton booklet or visit www.
Build project? themelton.co.uk for further details. themelton.co.uk for further details

Application fee - £500.00.

Application fee - £500.00.
Completion fee - 0.5% of the loan
amount Completion fee - 0.5% of the loan
amount.
What fees will be Title Insurance Fee - £77.00.
Title Insurance Fee - £77.00.
payable? Valuation fee (subject to scale).
Valuation fee (subject to scale).
£80.00 reinspection fee payable at
each stage £80.00 reinspection fee payable at
each stage.
Higher lending charge payable.

Can I offset savings The mortgage can be linked with The mortgage can be linked with
against my Self an Offset Share Account (terms an Offset Share Account (terms
Build mortgage? and conditions apply). and conditions apply).

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP

REPAYMENTS ON YOUR MORTGAGE
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The Melton Building Society is a modern, national
provider of mortgages and savings, with branches in
Melton Mowbray in Leicestershire, Oakham in Rutland
and Grantham in Lincolnshire. The Society has been
helping people to buy homes and make the most
of their savings since 1875 and regularly features in
national best buy tables.

For further information about our range of mortgages

for self build and renovation, please call the Melton on
01664 414141 or visit www.themelton.co.uk

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Principal Office
Mutual House, Leicester Road, Melton Mowbray, Leicestershire, LE13 0DB.
Tel: 01664 414141 Fax: 01664 414040 E-mail: melton@mmbs.co.uk

Branch Offices
18 Nottingham Street, Melton Mowbray, Leicestershire, LE13 1NW.
Tel: 01664 480214 Fax: 01664 560321 E-mail: meltonbranch@mmbs.co.uk

48 High Street, Grantham, Lincs, NG31 6NE.

Tel: 01476 564528 Fax: 01476 575231 E-mail: grantham@mmbs.co.uk

23 High Street, Oakham, Rutland, LE15 6AH.

Tel: 01572 757911 Fax: 01572 757946 E-mail: oakham@mmbs.co.uk

www.themelton.co.uk
The Melton Mowbray Building Society is authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

MMBS50216