self build or buy from a friend

D

dmac

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I have been looking for a site to self build in my local area but the sites available are overpriced and nothing hectic, a friend off mine has now offered a site to me which was left to him. I have looked at this site and it is a great site, by far the best around. He said we will sell it for the average price of sites in the area but on the condition that I get him to build my house. He is a brickie and the quality of his work is very good so i have no problems with that side of things. He is on holidays at the moment so i said i'd start looking at plans and about to get the archtect to draw them up, when this is done he will apply for the planning permission and take it from there. We haven't talked about money yet as it will depend on the plans, but i'm not sure what way to go about it should i get him to give me a detailed list of the cost of each stage or let him come up with a final figure and pay that when the house is done. Should i get prices myself also. We would be good friends and want everything to work out for both of us.
 
You would have to make sure everything is layed out upfront including pricing. I would also price around. Personally I would be reluctant to go this way as things always go wrong with building whether it is a self build or your buying in a developent and this may cause problems for the friendship.
 
dmac said:
he will apply for the planning permission and take it from there
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Do you mean the architect will apply in your name or your friend will apply in his? If the latter definitely not a good idea as the planning consent should be obtained in your name.

dmac said:
i'm not sure what way to go about it should i get him to give me a detailed list of the cost of each stage or let him come up with a final figure and pay that when the house is done
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A formal agreement detailing the cost of each stage IMHO is the only way to go. It may sound very cold but my option would be to get it done thru your solicitor.

Despite the fact that you are both very good friends it is best to keep the whole matter on a totally professional footing, especially if you want to hold on to the friendship.

Best of luck with the purchase/build.
 
I understand this and i really wanted him to just sell me the site but he couldn't as it was left to him and his parents want him to go this route. I can understand this as he can make more out of it this way with selling the site firstly, then building the house and then selling a built house. I would expect him to add 10 - 20k on but i would be prepared to pay this as it would make my life easy having the house built also my job takes me abroad alot which would make it difficult for organising different tradesmen and keeping an eye on things.
I planning for a two storey roughly 2100 sq ft with concrete floors, hallmark finish and geothermal heating. The price people quote for self builds seem to be on average 100 per sq ft what is a contracters average charge also i take it that they supply the materials in their price.
the average price of a site in the area is 60k and taking the 100 sq foot this would mean a price of 270k plus 10 - 20k for the geothermal. Is 290 - 300 k realistic
 
If he is acting as your contractor, put your friendship to one side and get a solicitor to draw up a contract detailing the duration of the build, agreed price, stage payments (if any) etc.

Building a house can be a stressful time and can strain even the strongest friendships.
 
Yea we said from the beginning we would get a solicitor to draw up an agreement.
The plan is for him to apply for planning in his name and take the project fully on himself. I would leave a deposit with the solicitor to show my commitment. He will finance it himself and when its ready i purchase the property of him for the agreed sum. he says if i'm not interested in the site he would be building to sell anyway, this way i get a house built and he sells to a local person.
I'm looking at it that if i let this site go i will end up paying an extra 20k for a smaller site which wouldn't be in as good a location and would probaly need lots of ground work, this one is totally flat and in an ideal area
 
dmac said:
Yea we said from the beginning we would get a solicitor to draw up an agreement.
The plan is for him to apply for planning in his name and take the project fully on himself. I would leave a deposit with the solicitor to show my commitment. He will finance it himself and when its ready i purchase the property of him for the agreed sum. he says if i'm not interested in the site he would be building to sell anyway, this way i get a house built and he sells to a local person.
I'm looking at it that if i let this site go i will end up paying an extra 20k for a smaller site which wouldn't be in as good a location and would probaly need lots of ground work, this one is totally flat and in an ideal area
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This sounds good. One point that I wonder about with the planning, I take it that as he is a builder you will be the first owner and it won't incur stamp duty?
 
The architect is another local guy which we both know and i have only chatted with him about the idea so far, i am due to meet him at the weekend and get the designs started.

Regarding stamp duty i think first time buyers only pay duty after 317k on the property so i shouldn't need to pay any, i'm not so sure what way it works when inheriting land as he has done
 
dmac said:
Regarding stamp duty i think first time buyers only pay duty after 317k on the property so i shouldn't need to pay any, i'm not so sure what way it works when inheriting land as he has done
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Try using the search option on AAM and you may well be able to read up on it but would also run it by your solicitor to be on the safe side.
 
Be aware that if he gets planning permission in his name, the council may also insert an occupany clause preventing him from selling the house for 5 or 7 years. Even selling to another local may not be enough for them to revoke it.

Check if these clauses are common in your area.
 
polaris said:
Be aware that if he gets planning permission in his name, the council may also insert an occupany clause preventing him from selling the house for 5 or 7 years. Even selling to another local may not be enough for them to revoke it.

Check if these clauses are common in your area.
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Thanks I'll look into it
 
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