We’re often asked how much it costs to build a house. This is a difficult question to answer: every new build has its own requirements and new build costs depend on a range of factors. In reality, it is possible to have an accurate estimate of the price when all of the drawings and work schedules have been completed. However, there are a number of variables and issues that you can take into account to gain a sense of price before then. We’ve outlined these below.
Location and design
Construction costs vary depending on the location of the site in the country. Central London will be a lot more expensive than elsewhere. For a new build home designed by an architect in London or the South East, current minimum construction costs tend to be in the region of £1,750 per square metre, with land acquisition and professional fees on top of this. Where other issues apply (and we’ll come to these next), this figure is likely to increase to a minimum of £2,000 per square metre.
The design of the property can also have an impact on the cost. It is important to use an architect who has a track record of designing houses that are within your budget (see examples on our Projects page). Where the highest quality finishes are required, the cost per square metre may rise to £4,000 (and more).
Factors that increase costs
It is likely that several other factors will apply to the project which will lead to higher costs. Examples include: party walls; difficult site access; specialist foundation requirements; non-standard forms of construction (e.g. cross-laminated timber); large areas of glazing rather than walls; and high spec kitchens and bathrooms.
There are a number of fees that will also need to be taken into account:
– Purchase costs (price of the sale, solicitor’s fees, survey, Stamp Duty Land Tax);
– Finance costs (relating to any borrowing and associated interest rates); and
– Consultant costs (these will also vary depending on the size and nature of the project – architect, structural engineer, inspectors, etc.).
Factors that decrease costs
There are a number of tax benefits for new build houses which can offset some of the above costs. Stamp duty is calculated on the value of the land only, which is typically less than the value of the land with an existing home on it. Community Infrastructure Levies can be considerable (especially in London) but new self-build properties are usually exempt from this (in line with certain residency terms). VAT is also not payable on the construction costs of a new build house and, assuming the house will be the principle private residence, Capital Gains Tax is not payable if you make a profit at the point of sale.
If you are interested in exploring the cost of a new build project with RISE Design Studio, please get in touch.