Mark Wadsworth

This is a spare 'blog in case my main 'blog at markwadsworth.blogspot.com isn't working

Missing Figures Round

The BBC has been criticised by some for misleading reporting, but this is beyond the pale:

But overall, self-build saves money, supporters argue. The average new build home costs £189,940 compared to a self-build cost of £84,000 if you do the work yourself or £146,000 if you employ tradesmen to do it for you.

The difference between £189,940 and £84,000 is largely the cost of a plot of land with planning permission (minus a bit for builder’s profit margin and the value of your own labour). The difference between £189,940 and £146,000 is because a speculative builder takes risks and has to make a profit margin on top of his actual costs.

In any event, it’s not clear whether the £146,000 figure includes the land cost, as it seems wildly over-stated. My next-door neighbour had himself a massive semi-detached house built (in his side garden) with all mod cons. He told me it cost about £120,000 all-in; a basic house would have been about £80,000 but he got a bit carried away.

Lynda Williams was given a plot of land in mid Wales by her father. She didn’t have the money to hire a project manager so ended up building it herself from a timber frame. It took eight months and meant putting it together in the evening after work. The main motivation was getting value for money. Her mortgage was £110,000 but it is now valued at £260,000.

Let’s assume that the mortgage paid for the construction costs, the balancing figure of £150,000 is the (largely artificial) scarcity value of a plot of land with planning permission.

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