FACTORS AFFECTING THE BUILDING COST OF HOUSES

INTRODUCTION
Own your House – or Rent…
Your wealth starts to grow by owning a personal residence. A home is essentially a "forced" savings account, building valuable equity each time a mortgage instalment payment is made. The more a home's mortgage is paid down as compared to the market value of the home, the greater that particular home owner's net worth is. Net worth is the term used to describe the amount by which an individual assets exceed their liabilities. It is calculated by subtracting the total dollar amount of all liabilities from the total value of all assets. For example, if an individual owns a home worth $200,000, has furniture worth $20,000 and owns a $20,000 car, the total value of these assets is $240,000. However, this individual has a $120,000 home loan, owes the furniture store $10,000 and owes nothing on the car; therefore the debts (liabilities) owed on these assets is $130,000. By subtracting the value of this person's liabilities ($130,000) from their assets ($240,000) we have arrived at this person's net worth of $110,000.
The average home owner has a net worth that is exponentially greater than a non homeowner. Look at the data in the following chart. The average net worth of homeowners versus renters is staggering:
Your Own Home is the Foundation for Wealth
Renters are disadvantaged because they do not develop equity in their dwelling. Also, their monthly rent is usually higher than a mortgage payment because the landlord has to pay their own mortgage payment on that particular property and still make a profit. Renters get no tax breaks at the end of each year for the property they rent; but their landlord does. Renters literally throw money away every month into someone else's dwelling, building their net worth. This helps to explain why a home owner's net worth can be as much as twenty seven times greater than a renter's net worth.

Every new house built, from exclusive penthouse apartment schemes right down to the simplest self built, always involves compromises in terms of design, materials used and the building techniques involved.

For the experienced house owner-builder however, the only aspect that cannot be compromised is the total cost. Once you have settled on a realistic budget, one that allows for cost overruns, delays due to bad weather, shortage of materials, and so on; then the following ideas should help you stick to that budget, no matter what happens during the building in progress.

The basic premise of building on a tight budget is - better a simple house built well, than an elaborate house built badly. Nobody wants to be associated with an large, over-designed house that is built slowly and then, through lack of money or forward planning, abandoned half way through and left as a reminder and an object lesson of how not to build your own house. The cost of a self built house depends on several factors. The location of the building operation.
. How elaborate the house design is.
. The standard of building and the quality of materials.
. How much involvement the owner-builder has in the actual building of the house.

An obvious way to save money is not to build more than you need to, that is to keep the house as small as practical and keep the design as simple as possible. Building a house in a box shape creates the simplest, cheapest roof system and also means that the builders can layout foundations, blocks and I or bricks efficiently and quickly.

Look critically at your house design and see where you save money by, for example opting for cheaper windows whilst still maintaining the look you want. Along with windows, owner-builders can also save money by building porches, extensions and chimneys, etc without unnecessary ornamentation. At the design stage, it may save you money in the long run to employ an Architect or an a Professional Architectural Technologist to oversee your design and ask them to make sure your minimum design is actually possible to build and to suggest any other ways you can keep it simple. Try to fid an Architect or design company that specialise in low budget self building schemes.

A very common error is to assume that every additional feature or costly finishes invested in will, as a matter of course, be recovered with interest when selling the house. This is simply not true. You may have gladly spent the extra money. Your tastes may will not impress a prospective buyer.


Saving money extends from the design of the house right through to the materials you use in the construction of the building.

Three areas that can save you significant money are: Choosing the right bricks to use: standard
bricks can be 30%less expensive than specialist non standard bricks. Choosing a simple house
heating system, Using uPVC or softwood windows rather than hardwood windows, this can reduce
your window costs by up to 40 percent.

This article is only intended as a basic general summary and you should always seek professional advice where necessary.

The aim is to help you estimate the cost of building your own home.

The focus will be on building an affordable home for the middle income family group. We will NOT be using expensive, exotic and/or luxurious finishes.