With rocketing house prices apparently a thing of the
past, investors are looking for new ways to profit from
property. One route, for those with the courage, is to
become developers.
A small but determined band of ordinary investors aiming
to pump up retirement funds through property is turning
its attention to serial house building. BuildStore, a
self-build property services specialist, has noticed this
subtle change in the profile of the Do-It-Yourself builder.
Managing director Raymond Connor says: 'Self-build used
to be mostly about people building a home to live in,
but retirement planning is quite an issue now and self-builders
see it as an affordable way of building a decent nest
egg that they can release by downsizing when they want
to retire.'
Making use of huge gardens, undeveloped properties and
spotting potential is a key element to self build. Check
with the local authority regarding planning permission
prior to viewing a plot. Albeit that the vendors would
have probably confirmed this prior to sale. If planning
permission is not available there is nothing to stop re-application
should planning guidelines change.
Skipton building Society offer a special self-build mortgage.
The lender releases the money in stages, as and when the
money is required, including paying for a plot. Self-build
though is not for the faint hearted. Remember that there
are tradesmen to deal with along with balancing the books.
There is so much to organise that you may well find you
have no free time. The only time you may see your friends
and family was when they came round to see how the project
was progressing. Self-builders also need to be organised
and sensible with money.
But the profits that DIY builders earn depend on where
they buy and how careful they are with spending. Plot
prices differ hugely. Values in Surrey average £477,000
while self-builders in Manchester can snap up land for
only £30,000, says PlotSearch, part of BuildStore.
Labour is also in short supply, pushing up costs, but
you can still make big gains. Of three recent self-builds
that used BuildStore's services, all ended up in profit.
A house built in Wales cost its builders £142,240,
including £74,000 for the land. It was valued at
£300,000 on completion, a rise of 111%.
In Colchester, Essex, a house built for £100,000
on land bought for £125,000 was valued when finished
at £300,000, a 33% rise.
In Oxfordshire, a house in Wantage built for £115,000
on land that cost £120,000 was valued on completion
at £415,000, a rise of 77%.
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