When to knock down and start again

Mark Stevenson, managing director of Potton and Kingspan Timber Solutions and self-build and renovation expert for The London Homebuilding & Renovating Show, on why self-builders should demolish rather than wait for empty land.

Over 53 per cent of UK adults would like to self-build or commission an individually designed custom-build home at some stage in their lives, but there are not enough plots of land to satisfy demand. To make the most of their opportunities, approximately half of British self-builders decided to progress with their projects by demolishing an existing home. However many still hesitate to go down the ‘wrecking ball’ route.

Aside from having more plot options, and an established residential status, plus essential services and established access arrangements already in place, a rebuild done correctly can also offer more space, increased value and fewer taxes.

Assessing viability & getting planning

In order to tell if a plot has potential for redevelopment, you need to make sure it’s worthy of your time and money. ‘Thinking like a developer’ helps, as it implies doing your research to understand the financial implications. My advice is to work backwards from what the plot could support, approximating its end value, and then removing the cost of purchasing and developing it.

Striking a balance between good architectural design and an approved planning permission will help you create a viable project. Due to having established residential status when replacing an old home, you don’t need to worry too much about details such as scale, sitting and access. Most local authorities are also likely to allow a new home to be 30 per cent larger than the previous one.

Design considerations

When developing design ideas, assess the features of the surrounding buildings and think about how your proposal will blend in. Planning policy favours innovative design, but it is likely to reject designs that are overbearing, taller than nearby properties and which result in loss of amenities to neighbours. A planning consultant can shed light on all queries.

Redevelopment costs, project management & other considerations

Demolition needs to take place only after securing permission for the replacement. This is a straightforward process and costs around £8,000 – £12,000 for a single property. The only complications to bear in mind are the disposal of asbestos and other hazardous materials and disconnection of services, which can trigger a lengthy dismantling process.

A word of advice, some builders will wish to retain parts of the existing structure to incorporate them into the new build, but this will increase your costs by approximately 20 per cent. To qualify for zero-rated VAT you have to ensure the entire building, including its foundations, is replaced.

The overall budget is impacted by how many people work on the project. If you don’t have the time or confidence to be hands-on, it’s best to manage a team of tradespeople or employ subcontractors. Alternatively, using a project manager or a turnkey builder might increase your spend, but will reduce stress.

Other considerations include whether a building is listed; if so, it can’t be replaced. Also locations such as conservation areas, national parks or areas of outstanding natural beauty will have tighter planning policy control and additional protection.

Breaching a restricted covenant can be an expensive error, so it’s advisable to take out indemnity insurance. Some contracts might limit the area of redevelopment or claim a percentage of value increase, so when possible try to renegotiate.

If you require a mortgage, this is secured against the value of the building you want to demolish – high street banks might not approve such applications. Also, you can expect to pay upwards of £1,300 per square metre for the rebuild. This means low value areas aren’t likely to offer viable prospects.

Lastly, run-down properties are obvious targets and high demand is likely to increase their selling value above their worth. Look for houses where you can add value by increasing the quality and scale of the building.