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Stamp Duty changes create a boom in self-build in Kent

Although a boon to the majority, the new Stamp Duty rules have caused a sea change in the housing market for purchasers looking at homes over £1.5 million. Many buyers in Kent are now considering self-build rather than buying an existing home in order to avoid the hefty new levies.

 

Such a figure is easily achieved in commuter towns such as Sevenoaks where the average asking price of a home is now above £800,000*.  

 

The rules brought in by Chancellor George Osborne in late November saw a 12% tax applied to homes over £1.5 million adding another £18,750 to homes at the bottom of this bracket and more than £50K on homes over £2m.

 

In a bid to avoid these high tax rates, many more purchasers are now considering a self-build option instead.

 

Kent developer DBS Homes in Sevenoaks who specialises in assisting home buyers to self-build has seen the direct results of this change in attitude. Managing Director, Denis Minns comments:

 

“We have seen a significant rise in the numbers of people now coming to us who are interested in self-build as a way to save money in view of the new SDLT system. Recent changes to Stamp Duty Land Tax (SDLT) favour those buying a plot and having a home built on it rather than buying an existing home, especially when we are talking about a high-end property. The saving could be around £122,000 in tax on a home with an end value of around £2m, making it far cheaper to self-build than buy an existing home.”

 

“Furthermore, exemption from the Community Infrastructure Levy (CIL) available to self-build can save tens of thousands of pounds, making it easier for private buyers to compete with speculative house builders for building plots. This means that there are many more plots available for those who genuinely wish to have a home built for their own occupation.”

 

“We appreciate that self-build can be a more daunting prospect, which is why companies like our own are here to help buyers navigate the entire process. Finding the right plot is the first hurdle that the self-build buyer has to cross. Specialist home builders also employ a full range of professionals able to handle site acquisition, planning and environmental matters, as well as sourcing land, materials and the construction. They are well placed to advise on planning matters, costs and timescales.”

 

“Today the advantage for home buyers of employing an architect or specialist home builder is to  self-build a luxury home that is distinctive and special, as well as offering a substantial tax saving. With the upcoming Build It live exhibition taking place soon at Bluewater from 28th February to 1st March, we expect to see huge numbers of purchasers there considering self-build as a really viable option.”

 

Denis gives his ten top tips for budding self-builders:

  • Don’t feel you have to do the work yourself. There are experienced architects and professional builders to assist you.
  • Profit is not the be all and end all. You should regard the self-build project as a means of a creating a home that is special for you, not simply for creating revenue, as it could lead to making unnecessary compromises.
  • Give yourself realistic timescales. Planning, designing and building a new home takes time and there are always snags to overcome. 
  • If you see the ideal plot be prepared to wait. Location will always triumph over time.
  • Get advice from other self-builders and learn from their previous mistakes.
  • Don’t choose the best of everything. The most successful homes are a blend of beauty and the ordinary.
  • Abandon your preconceptions. The learning curve for self-building can be steep.
  • Remember to incorporate energy saving measures to save on fuel costs.
  • Consider carefully the type of contract you agree with your builder. This can be fixed price, costs plus or project management.
  • New rules for self-build offer advantages for tax savings. Make sure you take full advantage of these.

*Prices according to Zoopla.com

 

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