Tear the red tape off your ‘grand design’ – Vic discusses VAT

Vic Johnson, of Bridgnorth architects Johnson Design Partnership, today said Housing Minister Grant Shapps had not followed through on his pledge to make home building easier by tearing down the barriers and red tape.

Instead lenders are charging higher fees and deposits and making it increasingly hard for people to build their dream home, particularly first time buyers who haven’t the money or experience of ‘grand designers’.

But, says Vic, there is a silver lining with VAT being reclaimable on construction costs so you can still build your own home, and make a profit, as long as you remain creative and your home is properly designed and managed.

Vic says: “Self builders have to consider a range of costs at the start of a project; it’s not just how much do you pay for a build but how do you get a bank to lend you the money to pay for it?

“Increasingly lenders are charging higher fees, higher deposits and surveyors are undervaluing sites and houses in the first place. One only needs to go through the mortgage process today to see how different it is to only a few years ago.

“But one cost which has not risen is VAT. Yes it has on professional fees but on construction costs, building and even utilities, a lot can still be reclaimed.

“The ability to make profit on your new home has not diminished by the increase in VAT and anyone who has a keen eye for a bargain and is design savvy is still out there making the most of the opportunity.”

Earlier this year Housing Minister Grant Shapps called on the country’s aspiring self-builders to make a house-building revolution their New Year’s resolution. Self-builders are already Britain’s largest house-builder and account for one-fifth of Britain’s new homes each year.

But on introducing the new Community Right to Build Mr Shapps said he hoped to get rid of the barriers that stand in people’s way, including the complex and bureaucratic planning system, regulatory burdens, and lack of access to land.

Mr Johnson says he doesn’t believe the government has followed through on its promise but urged people not to be put off the prospect of building their dream home, but to talk to an architect and do the job properly.

He adds: “Obviously things are never simple. You have to be careful how you build, what you build and it needs to be properly designed and monitored to achieve the lenders requirements. However, the opportunity is still there.”