How Much Does it Cost to Build a House in Scotland in 2023?
How much should you set aside to build your dream custom home in Scotland? Our cost guide includes real life examples, £/m² building prices and the factors affecting construction costs in 2023.
‘How much does it cost to build your own house in Scotland?'
This is the number one question the Coldwells Build team are asked, and as you might guess, it’s not easy to give a simple answer.
The truth is, the average cost of a custom home can be almost anything. We build family homes for a few hundred thousand pounds, to larger properties that are in the millions. There are so many variables that impact cost, that it’s impossible to create a blueprint which will apply to every project. Each one has different construction methods, fixtures, fittings and materials.
So, the answer to 'how much does it cost to build a house?' really depends on your available budget. It's why we believe you should always discuss your budget with your builder early, to ensure your home is designed at a price that’s comfortable for you.
Working Out Your Budget
The first step is deciding on your budget and how much you can reasonably afford to spend on your custom home. To work this out, you need to consider the following:
- Your total savings
- Equity from the sale of your home (if required)
- Funding available through self-build mortgages (if required). An advisor will let you know the amount you can borrow.
Add these together and you’ll have your budget. From here, there will be two initial expenses.
Cost of Land
The first expense is finding and buying the right plot of land. You can get an idea of land costs with a bit of research. Talk to local estate agents, builders and architects about what you're looking for. They have their ear to the ground and may hear about suitable land before others.
Hop online and use Google Earth and Streetview to find pockets of unused land and approach the owners. Websites like Rightmove, Zoopla and Plotfinder are also a good resource. You can search by town or postcode and view plots for sale in Scotland.
The cost of your land will largely depend on your location. You'll also need to factor in legal fees and taxes. In some cases, extra costs might arise due to unforeseen conditions on your land. These might include sloping ground, structural or poor ground conditions and contamination, all of which will need to be taken into account.
At this stage, we would also recommend setting aside part of your budget to cover the costs of hiring professionals such as a site surveyor, architect, structural engineer and quantity surveyor.
Once you know your professional and plot costs, subtract these from your overall budget and you’re left with your construction budget, which is the amount you can spend to build your home.
We would also advise leaving some cushion for unexpected costs during the building process. A contingency fund of 10% is a good idea.
What Factors Will Affect My Construction Budget / The Build Cost?
The cost of building a new house in Scotland in 2023 hinges on many factors, from its size, construction type, the complexity of the design and quality of materials used. We've highlighted some of the key factors below.
Finishes and Specification
The quality of materials you finish your home with (the specification) will have the biggest impact on price.
Think of this as you would the star rating of a hotel. A standard-spec finish (3 stars) with off-the-shelf laminate flooring, basic MDF skirting boards and windowsills, and standard lighting fixtures are budget friendly.
High-spec luxurious finishes (5 stars), such as solid wooden flooring, natural stone tiles and custom-built cabinetry will add a unique look to your home, but also increase the cost.
Type of Construction
The construction method of your home will also influence house building cost. A simple timber frame home will be more economical (and faster to build) than a complex steel frame house. Similarly, the type of building materials used in the external cladding and finish (timber, glazing, metal, stonework) will all vary in price.
Windows and Doors
Triple glazed or bi-fold doors will cost you more than standard windows and doors and the type of materials will also affect price. For example, UPVC is more affordable than aluminium or timber.
Site Investigation, Demolition Costs, New Services
Will an existing home or structure need to be demolished before your new house can be built? If so, this is an extra cost to factor into the budget, along with removing waste.
If your plot isn't connected to mains services, set aside some of your budget for connection to water, sewers, bringing electricity to site, telephone and gas. If the site doesn't have access to mains gas, you will need to budget more for renewables (ie - ground and air source heat pumps).
The labour of the tradespeople is often more expensive if the land has challenging conditions such as sloping ground, contaminated soil, or is in a remote location.
Patios, Paths, Driveway, Planting and Landscaping
Besides the main house costs these features will all vary in price and will need to be considered in your budget.
Size is a major factor to consider. Generally, the larger your floorplan, the greater the cost. However, a smaller, high-spec, steel frame house could cost more than a larger economically built home, which is another reason to leverage a professional builder to guide you through the process of matching your dream home with your budget.
If you're undecided about how large your new home should be, it may be helpful to consider estimated costs per square metre.
Real Life Case Study: Cost Guide for a Standard Spec Four-Bedroom House in Scotland
In 2023 Coldwells Build completed a two-storey custom house build project on a greenfield site in rural Aberdeenshire, Scotland. The house was built using a prefabricated timber frame kit. It's exterior was finished with render, timber cladding and sheet metal roofing. The house was finished to a standard spec throughout and included:
- 4 bedrooms
- 4 bathrooms
- Open plan kitchen, dining and living room
- Utility room
- Master bedroom balcony
Dwelling size: 272 m²
Construction cost = £547,981
Cost per m² = £2014
The cost guide above does not include kitchen, sanitaryware, fitted joinery and appliances. These were sourced and supplied by the client. The price does not include external landscaping, garages or driveways.
Our clients also paid additional costs for professionals such as a site surveyor, architect, structural engineer and quantity surveyor.
As principal contractors, Coldwells Build were accountable for the project management, driving and coordinating the entire construction process. This meant our clients benefitted from our established links with trusted suppliers and professional tradespeople.
Do You Pay VAT on New Builds?
For new builds, VAT is zero-rated, which means VAT registered builders or subcontractors must zero-rate their work and not charge VAT.
Although the builder and subcontractors will have to pay VAT when they purchase materials, they can claim that back at the end of each month and they cannot pass it onto the client.
If you're doing a self build project, you will have to pay VAT at full rate for the purchase of any materials. However, this is can be reclaimed at the end of the project under HMRC’s DIY Housebuilder’s Scheme.
What Other Factors Affect the Cost of Building a House in 2023?
The impact of COVID-19, the war in Ukraine and Brexit forced the cost of materials, energy, labour, and lending up in 2022, and some of these costs are predicted to rise again in 2023. It may leave you wondering, 'Is now the right time to build?'
Don’t wait. Now is the time to build your own home and it will put you a step ahead of what’s to come. The benefit to building sooner is that with rising prices, your home will likely be worth more when finished than what you paid, providing immediate equity.
Average house costs for existing properties in Scotland continue to rise and are forecast to be 20% higher by 2024. Buyers are currently spending thousands more than the asking price for existing homes.
Construction labour costs are increasing, driven by a severe skills shortage. The Federation of Master Builders reported 39% of UK builders struggled to hire joiners/carpenters and 35% struggled to hire bricklayers in 2022. This is expected to worsen in the coming years, with reduced immigration and an ageing workforce. 70% of builders have put up their prices for work as a result.
So, looking ahead:
Labour price rises + high material costs + house price rises = the sooner you’re able to decide that a house build project is the right choice for you, the less investment you will have to make.
The design stage can take three to 12 months (sometimes longer) to get the house you want. Trying to time the market for lower prices is a false economy. The sooner you build your new home, the sooner you have built-in equity.
How Can I Avoid Going Over Budget When Building a House?
Once you know your construction budget, it’s crucial your home is designed with that figure in mind.
It’s easy to get carried away with ambitious design concepts, but when the time comes to approach builders for quotes, you may discover the construction costs are beyond what you want to spend or can reasonably afford. After designing your dream home, this can be a devastating emotional, financial and timeline setback.
To avoid this, we recommend you work with an architect who has a track record of collaborating with builders in the design phase to provide cost visibility from the start.
This simple but fundamental difference saves money and time by transforming the relationship between builders and architects into an alliance which fosters not only creative collaboration, but most importantly, budget control.
The architect manages the creative design, and the builder and architect work together on construction science and costs. When construction costs are monitored and tracked in the design phase, the risk of budget blowouts decreases.
It’s also an opportunity to identify any construction related challenges early on. With practical input from the builder, potential issues can be ‘designed out’ before leaving the architect’s desk, saving time on rework at a later (and more costly) stage.
Building your own home could potentially yield significant returns. A well-considered project could potentially net you a profit of 25-30% when (or if) you come to sell in the short term, and of course much more over a longer period of time.
Coldwells Build project manage a limited number of custom home projects each year, so our clients are guaranteed the highest level of quality. If you have a deadline in mind, start the discussion far in advance.
Take advantage of our willingness to share knowledge about the building process and schedule a strategy conversation today.
7 Things To Know Before Building Your Custom Home
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