Plot / Build prices

Here are two tips worth bearing in mind:

1) When making an offer on a plot, always work out how much you will have to pay for the actual build process – and then add another 10 or 20 per cent. If the price of the completed property is still at least 20 per cent less than a comparable one from a builder, you have a bargain.

2) You don’t have to find an empty plot. Many houses are on land that would be worth much more with a modern – perhaps larger and more attractive – property.

Eg. Cost of comparable house 200k

-20% =160k

Build cost=50k +15%=57.5

So land would be worth 100k (160k - 57.5k)

Eg. Cost of comparable house 300k

-20% =240k

Build cost=150k +15%=172.5

So land would be worth 67.5k (240k - 172.5k)

etc.....

MarketPriceOfHouse *.8 = MaxLandPrice + (buildCost*1.15)

MaxLandPrice = (MarketPriceOfHouse * .8) - (buildCost*1.15)

(.8 is profit/risk [100%-20%], 1.15 is cost + 10-20% risk)

So 140k build, worth 250k on market

MaxLandPrice = (250 * .8) - (140*1.15)

MaxLandPrice = 200 - 161 =~ 40k


So 100k build, worth 250k on market

MaxLandPrice = (250 * .8) - (100*1.15)

MaxLandPrice = 200 - 115 =~ 85k

This is probably what we are after!


So 100k build, worth 300k on market

MaxLandPrice = (300 * .8) - (100*1.15)

MaxLandPrice = 240 - 115 =~ 125k

Estimating build costs

Here are several ways of doing this:

Rule of thumb: base it roughly on an estimated £50 per square foot, or £450 per square metre. This includes walls. For high specification houses (swanky bathrooms and kitchens, lots of hardwood, stone and glass) go up to £650 per square metre. Beware of problems on the site, which can add thousands to the final cost.

Be cheeky: ask a builder to quote for the work and then deduct 15% for doing it yourself. Or split the work into each trade job and ask for quotes for each item of work (harder, but more accurate).

The hard way: go through a builder’s price guide (Spon’s Builder’s & Architect’s Price Book, £69.50), available in all central libraries.

Or you can get it from this site

You can also try Mark Brinkley’s The Housebuilder’s Bible. Having read this book a few years ago, I think it’s superb.

You can either borrow it from a library or buy it here

TIP: most builders won’t be doing as much shopping around for their supplies as you might think: for them TIME is money, not materials.

By sourcing supplies more cheaply yourself, you could shave up to 5% per cent off total build costs.