Self-Build Luxury Holiday Home: What You Need to Know

We help Maximise Your Rental Income with Eco-homes and Luxury Holiday Homes, provided by RIBA Chartered Architects.

Extended eco-friendly home in Edgbaston, Birmingham Architect using reused materials

Introduction - Self-Build Luxury Holiday Home: What You Need to Know

Before embarking on your eco-home project, it is essential to thoroughly evaluate several key aspects: the selection of suitable materials, appropriate construction techniques, structural systems, and the realistic prospects for obtaining planning approval on sites where permission is achievable in principle.

Building your own holiday home involves the thoughtful integration of natural materials, sustainable construction practices, and passive environmental strategies. The sensitive application of natural materials—creating a natural architecture that authentically responds to its context—is fundamental to successfully delivering a meaningful, sustainable, and site-specific design.

How much will a plot of Land cost for an Eco-Home

To estimate the value of a plot of land, follow a method similar to how an estate agent would appraise a property, with an additional step: locate similar plots in the same area that already have properties on them. Engage with a local real estate agent to determine the market value of these properties. Typically, a plot without a property should be about 45% of the total value of the property and the land combined.

For instance, if a two-bedroom semi-detached home on a half-acre plot in your area is valued at £300,000, the land alone might be approximately worth £135,000 using the same 45% guideline. However, remember that this percentage could vary slightly based on the local market's desirability and geographical differences across the country. Still, this formula provides a general baseline for estimating land value.

Another way of acquiring land is to build in the green belt, under what are known as “Very Special Circumstances” and Paragraph 84. There is also now the Grey Belt, which we will cover in a future post.

How do you acquire a plot of land for your Bespoke Holiday home? 

One piece of advice is to approach the Self-Build and Custom Housebuilding Register with measured expectations. Established on April 1, 2016, this register requires local planning authorities to track individuals and groups seeking serviced plots for self-build or custom housebuilding projects.

While the register appears promising, my experience with the Birmingham Self-build and Custom Housebuilding Register over four years has been underwhelming. Despite Birmingham's status as the largest council in Europe with numerous potential plots, I have yet to receive any viable plot options from the council, not one. 

You could use several alternative methods, such as contacting local estate agents, seeing what is on the market, or getting to know the locals in a particular area. 

However, you should consider more proactive methods of acquiring a site. This would involve searching on Google Maps aerial view for potential sites - perhaps you notice a house with an unusually large back garden that is not being used or a plot of land well connected to amenities and services such as electricity and water. After that, a quick search and purchase from the land registry will give you all you need to contact the landowner. At this point, you may approach the landowner and tell them you are interested in buying the plot of land from them. By buying outside the traditional estate agent route, you may even land a bargain as you are not competing with other potential buyers. 

The obvious downside to this approach is that it is by no means guaranteed to work the first time, if at all—you will most likely need to persist to make it work. 

Sometimes, finding the perfect plot involves boots on the ground and speaking with people

Always purchase Subject to Planning. 

If you've found the perfect plot of your dreams, you might be eager to purchase it and close the deal. However, ensuring you can build what you want on the land is crucial. The best way to do this is to purchase the land 'Subject to Planning.' Essentially, you only buy the land once you have secured planning permission. You agree with the landowner through a contract that the land is yours to purchase at an agreed price, contingent upon obtaining planning permission. This approach protects you from the risk of buying a plot of land and then being unable to secure planning permission.

It’s also important to secure full planning permission rather than, for example, a pre-application recommendation from a planning officer. A pre-application approval recommendation is welcome and a step in the right direction; nevertheless, from a planning perspective, it is fairly arbitrary and has no binding aspects. Therefore, obtaining full planning permission is critical to ensure your ability to proceed with your building plans.

Where do eco-homes source electricity from?

Renewable energy technologies, such as solar panels and heat pumps, are not just additional features in modern eco-homes but integral to the design. These systems provide clean energy solutions that reduce reliance on fossil fuels and lower utility bills. Properly integrating these technologies during the design phase complements the architectural aesthetics while maximising their functional benefits.

Do you require an architect? 

Naturally, you’d anticipate me to advocate for this approach, but allow me to explain. Eco-homes are growing in popularity, with around 13,000 self-build enthusiasts each year creating bespoke, environmentally responsive homes tailored to their lifestyle and values.

Engaging an experienced architect is essential: not only will they expertly manage the complexities of the build by assembling a team of trusted contractors and skilled engineers, but their professional insight can elevate your project beyond mere construction. Having taught architecture across several universities, I’ve witnessed firsthand the significant disparities in the quality of architectural education and the calibre of architects it produces, making the selection of the right professionals even more critical for the success of your eco-home.

Working with a good architect will help to streamline the process and avoid costly mistakes

Obtaining a self-build mortgage 

Most people will require a self-build mortgage to build their home. It’s important to distinguish a self-build mortgage from a regular one, which you may be more familiar with. A regular mortgage involves borrowing against an asset, i.e. the home, whilst a self-build mortgage is for something non-tangible. Some lenders work on a fixed budget cost, while others will release the funds in stages based on what is completed. An example of what can be done with a self-build is the Monocoque Cabin project we completed.

Typically, the better your finances are and the things you can put down as loan contingents, the more likely you are to secure favourable loan terms. For example, if you can put down the Architectural plans and project proposal, this will carry weight with the lender. Moreover, if you have another property, it might be worth looking into having this refinanced. Ultimately, lenders base their rates and loan amounts on risk; how much of a risk are you to them? The lower the risk, e.g. are you putting a good chunk of capital in yourself, are your current debt/outgoings low, are you at the peak of your borrowing capacity already, and ultimately, can you afford any repayments? The better your financial position, the better the lending leverage you will have for getting a great deal on your self-build mortgage.

There are also many things outside of your control, such as interest rates, which will have a big impact on your agreed-upon loan. 

It’s important to note that none of this is financial advice, and we recommend that you speak to a financial advisor before making any decisions.