Behind the Scenes at the Home Building and Renovating Show
Posted by Mark Hunter - April 08, 2010
Toolstop were on hand with Telesteps at the recent Home Building and Renovating Show, held in Birmingham's NEC. Neil and I travelled up from London, where we'd been on site at the Ideal Home Show, to take in the exhibits and hopefully have a chat with some home building experts.
Thankfully we got lucky. Well, Neil got lucky. He stumbled into the 'back stage' press area to find David Snell and Michael Holmes taking some time out from presenting workshops at the event's media stages and cheekily asked if we could have a chat with them. Both graciously agreed. So, it was down with the tea and sandwiches and on with the video camera.
David Snell, a contributor to Home Building and Renovating Magazine for 14 years, describes himself as a 'serial self-builder' being involved with 12 self-builds of his own and advising on countless others. He oozes passion and knowledge for the whole concept of designing and building your home. His life is steeped in the property market, having spent 10 years as an estate agent before becoming a writer for publications and newspapers including the Telegraph.
Michael Holmes is Editor-in-Chief of the magazine that gives it's name to the Home Building and Renovating Show and is a recognised expert in all areas of home building, design and renovation, looking after several publications dedicated to these fields.
What was interesting about our chat, however, was that each man seemed to draw different joys from home building and renovation. David appeared to be a purist, seeing home building as the ultimate way to live in your dream home, a home that you've conceived of, designed and built according to your unique tastes. Michael, on the other hand, had an eye for the financial benefits of self-building and renovating, talking with enthusiasm and authority on how to make serious money from your projects, something that, in this economic climate, should make all of us sit up and listen.
The property market has changed shape significantly over the past 2 years, with the so-called "Don't Move, Improve" phenomenon seeing the Home Building and Renovating Show increase in size and scope as people look to improve their current property rather than try and negotiate a move. "People are either finding it hard to get a new mortgage or are already on a good deal with their current mortgage, so they just don't want to have to negotiate with the lenders," explains Michael, "But this is the best time to buy a building plot, with plots becoming available on a scale not seen since the mid-90s."
The reality is, as Michael went on to underline for us, builders and developers are finding it harder and harder to get finance. They're not able to snap up new building plots as easily as they once were. David has observed that "ordinary people" are getting more of an opportunity to buy plots. While the prices of the plots hasn't decreased along with the rest of the property market, opportunities to buy have increased.
"The plot you buy is hugely important and ultimately impacts on the design of your home," says David. "You design the house to the plot, not the other way around."
And it appears that getting the money to buy a plot on which to self-build is getting easier. David explains, "Self-build finance is traditionally more available than developing finance. There are still some finance packages available whereby 95% of the cost of the land and 95% of the cost of the build can be borrowed. And once the property is finished the end loan-to-value of the mortgage is probably around 60%."
"And it's estimated that around 40% of self-builders already have cash for their project," adds Michael. We've moved into his territory now, as he takes up the conversation. "Then there's VAT to think about; you don't pay VAT on a self-build, whereas VAT is charged as standard on all renovating costs. And of course there's stamp duty to factor in. If you buy a plot of land for £100,000 you're not going to pay any stamp duty. You could save around £7500 which is the price of a really nice kitchen!"
David, however, feels that most people don't self-build to make or save money. The fact they make money is almost incidental to the fact they get the house they want for the money they've got. If they took £300,000 to an estate agent they'd get someone else's house. If they used that money to self-build they'd get the house that fits all their needs exactly.
Another financial benefit to self-building comes from when you sell the property. All of that equity is yours tax free, you don't pay capital gains tax. Michael states that it's one of the few ways to end up in your dream home short of winning the lottery; self-build and renovate, sell on, use the profit, tax-free, to invest in your next project. And so on.
With both men being involved with self-builds and renovating projects for many years, how hands on are they?
Michael prefers to manage the project rather than be hands on. He feels it's more cost effective to make sure the job is done efficiently by professionals rather than try to save some cash by doing DIY on site. And David believes he's personally too old at 65 to be as hands on as he once was. He built the first home he and his wife lived in after they were married. These days, however, he limits himself to making sure the right power tools are on-site for the job, taking a hand in hiring equipment for the builders he pays to execute the work. "And I just love the crack on the building site," he laughs, "you can't keep me away from it. I'm supposed to be writing articles for Home Building and Renovating, but I type a thousand words then rush back to the site to see what's going on."
What's your experience with self-builds and renovation? Are you finding you're getting more work from people who wish to renovate or improve their current home? What about people self-building; is working coming in from this sector? We'd love to hear from you in the comments below.
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