Britain’s housing market is shaky: prices are either flat or falling in most of the country. It’s a bad time to sell, and househunters who believe the slowdown will gather momentum may regard it as a bad time to buy, too. So, what constitutes a sound property investment?

Building your own home. Providing you do it well – and in particular, keep control of the budget – self-building, even in a downturn, can mean profit. Even better, there are signs that the government intends to encourage self-building, as part of its effort to achieve its target of 3m new homes by 2020.

Building your own house is commonplace in many other countries: on the Continent, it accounts for as many as 6 in 10 new homes, according to a report by Ama, a market-research company. Here, however, it has been slow to take off, with just 10% of new housing self-built. Why?

For a start, small individual plots are hard to find. Bidwells, a Cambridge-based estate agency with offices throughout East Anglia, says it takes several calls a week from people looking for them. “Good single plots for large family properties are exceptionally rare in the area. We probably get one a year,” says James Thomas, residential development surveyor with Bidwells. He believes the high prices they fetch are a reflection of intense competition. “A combination of planning constraints and government policy has driven more efficient use of land to ensure denser development. The guidelines dictate a minimum of 12 houses to the acre.”

More suitable land, however, may soon become available. The government is considering a recommendation from the Callcutt Review, the independent report into the housebuilding industry that it commissioned, for a nationwide push to ensure local authorities encourage self-building.

Meanwhile, a pioneering partnership has been struck between Swindon council and BuildStore, the company behind the Swindon-based National Self-Build & Renovation Centre (NSBRC). The council will release land; BuildStore will subdivide it, install essential services and sell to self-builders, who will be able to get advice from the firm’s experts.

The details have not been finalised, but Tim Doherty, the NSBRC’s managing director, believes between 12 and 30 houses will be built. Several people have expressed interest. “When we’ve finished it, we hope other local councils will see how successful we’ve been, and want to join in with a similar scheme,” he says.

Building your own home doesn’t necessarily mean rolling up your sleeves and mucking in with the bricklaying – though you can if you want to. You could hire someone to oversee the entire project while you carry on with your day job: they’ll normally charge at least 10% of the budget. Or you could manage the project yourself: you’ll have to oversee the workforce, order supplies and monitor what’s happening on site.

The more work you do, the greater the potential savings, and the more profit you should reap if you sell. Commercial developers, says the Housebuilding Federation, on average achieve a 15% profit margin. Although the margin on a self-build can vary, by doing as much work as possible yourself, you could make at least double that figure, and may, depending on the individual circumstances, make even more. And remember, a new-build means you can reclaims any Vat levied.

If you really want to make money, make sure your house design is of a high standard. Martin Pease, 42, a Bristol-based commercial architect with the design firm Atkins, devised a stunning white-steel and timber-framed home for his family. Though they do not plan to sell the Sneyd Park property, they are sitting on a potential profit of £1m: the house has been valued at £1.75m.

The 3,000 sq ft, four-bedroom contemporary home is known locally as “the sugar cube”. It is on two levels: a light-flooded open-plan living area on the ground floor, and bedrooms on a mezzanine. Sunk within decking at the rear are a swimming pool and a hot tub.

The project cost £775,000 in total. The plot alone was £425,000 in 2006 – steep, but a price Pease considered worth paying because of the location. His wife, Katherine, 39, a former marketing executive, project-managed the £350,000 build while their children Grace, 9, and George, 8, were at school.

The couple say careful planning and budgeting underpinned the success of the build, which took 10 months. A 10% contingency fund covered unexpected problems such as the relocation of an old sewer, which cost £13,000, and most unforeseen expenses were absorbed by savings made elsewhere. Off-site construction of the frames saved two months’ labouring wages, and they constantly fine-tuned spending. “We saved on bathroom fittings by going for mid-range items rather than luxuries,” Pease says. Design values, however, were never sacrificed. A kitchen tap cost £1,000, but for Pease, such fixtures are like “a good set of cuff links on a shirt”.

They also planned everything, down to the last plug socket and light switch. Pease thinks this attention to detail is something many self-builders overlook – to their cost. “It’s just not in everyone’s everyday vocabulary,” he explains. “They don’t think to plan where they want a power point, or whether a wardrobe is going to end up too close to a bed. They take these things for granted, but if these details are not right once the house is built, it will irritate them.”

So, what advice do the couple have? “Be realistic,” Pease says. “Draw every wall, every shape and exactly what you want in it. Then go to the bathroom place of your choice and find exactly what you want. Cost everything precisely.” This approach will minimise, if not eradicate, nasty surprises.

A decade ago, self-builders were regarded almost as eccentrics. Now, thanks to a property boom and a plethora of television programmes extolling the virtues of DIY, Britons are more confident about going it alone. Figures from Advanced Flexible Self Build Mortgage, one of the few specialist lenders in the field, reveal that the value of its loans has risen by 10% in the past two years. BuildStore, which also lends to self-builders, says its mortgages were up by 10.5% last year on 2006, to £450m in total. John Hay, BuildStore’s head of financial services, marketing and product development, says that not enough family houses are being built. “The lack of properties makes people look at self-build or renovation as alternatives.” Regardless of your circumstances, you are never too young or too old to embark on self-building. Take Jean Bowden, 61, an NHS hospital manager who took early retirement. Rather than put her feet up, Bowden, long a fan of modernist architecture, decided to build her dream home on a Norfolk river-bank. It cost £243,000. Two years later, the property is for sale and she is in line for a profit of about £150,000.

Surfing the internet in 2003, she spotted half an acre of natural woodland gardens running down to a river in the Wensum valley. She paid just £73,000, as it came with restrictions: much of it couldn’t be built on, because of the flora and fauna in situ, and planners would allow only a 646 sq ft, single-storey home, to preserve views. For a divorcée whose children had long since left home, such limitations were immaterial.

The design and build took three years. Bowden lived in a caravan on site for the first 12 months, to get a feel for the place. “I wanted to get to know how the plot was, as it’s such a nice area, to see what the river did and to find the best spot for the house.”

She finally opted for a steel-framed glass house, inspired by Mies van der Rohe’s 1951 Farnsworth House, a rural retreat outside Chicago, made an MDF model of what she wanted and took it to an architect. “In the first week, he went off brief, designing a two-storey off-the-peg house. From then on, I felt I’d be safer with a structural engineer.”

Although she had carried out renovations and conversions with her son Neil, a builder, this was her first self-build. Still, she project-managed and did as much work as possible herself, calling in specialists only when necessary. To oversee complex areas, she enlisted Jaki Cocker, a north Norfolk-based building surveyor turned builder.

“It’s been such a stress-free build. I hope those who helped me feel the same,” says Bowden, who attributes the smoothness of the project to flexible working times, an orderly site and prompt payment. There was only one crisis: “It was the first day of the build, when the steel frame went up. One side was not lined up, so nothing would have fitted properly, but the contractors came back and sorted it out.”

The home has an open-plan living room and two bedrooms, and Bowden has just finished the garage. From her patio deck, she enjoys watching the family of otters that live nearby – and, if she fancies a drink at the local pub, a mile away, she goes by canoe. She is selling up because the urge to self-build again is too strong to resist.

Continued on page 12 Continued from page 11 Sadly, self-builds don’t always go so smoothly. Claire Lines, 31, believes the stressful nature of the one she embarked on played a big part in the end of her relationship. Lines and her boyfriend bought a plot in Edenbridge, Kent, in 2004, and began building a four-bedroom home. That was finished last year – but by then, the couple had already called time on their liaison.

“We broke up mid-building work because it was so stressful,” she says. “We initially thought it was a good time to build as we are young, with no kids. We chose to live in a caravan on site.” Perhaps the cold conditions of a poorly insulated caravan were to blame, but the couple grew apart. While Lines became engrossed in the building of their home, her boyfriend concentrated on his City career.

The design and oak frame were supplied by Oakwrights, but it was up to the couple to find the rest of the materials and the workforce: “We found labourers through word of mouth, a mix of recommendations and networking.” Lines did her research thoroughly before starting construction – a part-time mathematics lecturer at Brunel University, she says her years of studying paid off. Although the project took three years, she says she needed that time because she didn’t want to sacrifice quality. “I met so many nice people, which made it pleasurable,” she recalls. “But there were times when I wanted to throw something heavy at the house.”

Including land, build and mortgage repayment costs, the total outlay was £650,000. Last year, it was valued at £880,000, and Lines has sold her share to her former boyfriend.

She has found a new professional sideline – project-managing for other self-builders – and, despite the personal upheavals, has not been put off. “Next time, I’d like to build a Georgian-style home, with high ceilings. Although I still like oak-framed homes, so maybe I’ll do another one of those, too. I could end up doing two more builds.”

Fancy your chances now?

The Riverside Glass House is for sale for £395,000 with Housesimple; 0845 603 9909, www.housesimple.co.uk. Oakwrights; 01432 353353, www.oakwrights.co.uk

How to build your dream home

Get your hands on the land

Given how few individual plots come up, you must be able to move quickly if one becomes available. Make sure your finance is in place, join land search organisations, such as Plotsearch (0870 870 9994, www.plotsearch.co.uk), contact estate agents in your chosen area and spread the word among local building professionals. For specialist mortgage advice, try BuildStore (0870 870 9991, www.buildstore.co.uk) or Advanced Flexible Self Build Mortgage (01259 726650, www.afsbm.co.uk ).

Don’t be blind to potential

By their very nature, plots don’t look good. They are often scruffy pieces of land, full of trees and plants or scrap. Look beyond the superficial and think about whether the plot has the characteristics you want. Is it near schools or secluded? Is access to the road good? Could you fit the house you want on it? So-called problem sites – such as those with a tree carrying a preservation order – are often considered too much trouble by commercial developers, but make great sites for self-builders.

Design essentials

Make sure the design suits its surroundings. There is no point having a high-spec home in the middle of poor-quality housing: it’ll be difficult to attract buyers should you ever want to sell. Similarly, a poorly finished house in an upmarket area won’t sell easily.

Keep costs low

Look for savings everywhere, from land to fittings. Do your research (the internet is a great resource) and double-check that what seems to be a bargain really is. Sourcing materials from abroad can be cheaper, but make sure they are compatible with British building regulations.

Do as much as you can yourself

If you’re good at DIY, now is your chance to show what you can really do. If you are a skilful organiser, try project-managing. But be careful: only attempt work you have an aptitude for, or you could end up having to call in a professional to repair the damage. If you want to get your hands dirty, why not do a course in plastering or bricklaying?

Want to learn more?

The Self Build & Renovation Show runs from Thursday to Sunday at the National Self Build & Renovation Centre, Swindon. Entry costs £10, or £15 for two, but you can go half-price with The Sunday Times’s ticket offer. Visit www.mykindofhome.co.uk/show and enter the promotion code SBMSTH010. Available until Sunday, March 9.

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