PART FOUR HOW TO FUND YOUR SELF-BUILD PROJECT

EMMA LUNN Is a freelance personal finance journalist.

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Turning your self-build plans into reality requires getting adequate funding in place to pay for it, but what are the best finance options? Emma Lunn offers advice on the different routes to consider

Building our own home is the ultimate dream for many of us, with one of the main benefits being that it allows us to design a unique property that will completely suit our lifestyle.

But before we start planning the perfect property or digging the foundations, it’s vitally important that we should figure out exactly how to fund that self-build dream. Self-builders have several finance options available to them, and the best one for you will depend on how much your self-build will cost and your personal circumstances.

USE CASH SAVINGS

If you have enough cash in the bank, using this money to fund your self-build project can make sense. A benefit of using cash is speed, as you won’t have to wait for loans or mortgages to come through to start your project. You also won’t be paying interest on any borrowing — so it’s a cheap option, too.

However, using your savings is a big decision and it’s generally unwise to run your cash reserves down to zero. When working out a budget, all self-builders should include a minimum 10% contingency fund for any unforeseen events.