Cost of Building a House in London

In today’s real estate market, building a house from scratch has become an increasingly popular choice among aspiring homeowners. Greater control over design, customisation options, and the opportunity to create a truly unique living space are just a few benefits over buying a pre-built house. But how much does it cost to build a house in London, UK? Let us delve into the cost considerations of self-building in London, highlighting the various factors that contribute to the overall expenses.

What is the Average Cost of Building a House in London, UK?

One way to get a rough estimate of building a house is to use the cost per square metre (m²) method. On average, you need to invest from £1,800 to £3,000 per m² for building a house in the UK. However, a budget can vary significantly depending on the location. For example, London is the most expensive city to build in, with an average cost per m² of £3,500.

By multiplying the desired floor area by an average cost per m², you can get an idea of how much your future house may cost to build. For example, should you want to construct a 150 m² mid-spec new house in London, you can expect to pay at least £375,000 (£2,500 x 150) for build costs only, so not including consultant fees, VAT, land & Utility costs.  However, this is only a ballpark figure. Below, we review multiple factors that affect construction expenditure.

Factors that Impact the Cost of Constructing a House

Land acquisition, building a structure, connection to utilities, interior work, etc. are typical expenses for any construction project. However, each individual project has a unique value due to the specific amount of materials, their type, quality, as well as the amount of work on their installation. There are three main factors that have an effect on the cost of building a house: design, specifications, and project management.

Land Cost

The cost of acquiring land is a significant factor to consider when estimating your self-build budget. It encompasses not only the price of the plot itself but also expenses like Stamp Duty Land Tax rates and legal fees. Typically, land costs make up approximately one-third of the value of a completed home. However, in areas with high property prices, the land cost can be as high as 50% of the entire project.

Another crucial factor that affects the cost is the planning status of the plot. A plot that already has consent for a house will generally come at a higher cost compared to a similar plot without approval. That being said, purchasing a plot without planning consent carries significant risks. At the same time, it also has the potential for a substantial increase in value.

The amount of work and cost involved in preparing a plot for construction depends on its condition. Plots that are flat, level, and clear will be easier and cheaper to build on than plots that are sloping, uneven or overgrown. Similarly, plots that have good road access and connection to utilities are usually more cost-effective than isolated or off-grid alternatives.

To save money on a plot for construction, you can look for infill plots that occupy a gap in an existing street or village, rather than extending beyond the boundaries of the settlement.

Breaking Down Your Budget

When building your house from scratch, it is crucial to understand how your budget will be allocated. Breaking down the expenses is the first step towards determining the overall cost. A consultant quantity surveyor can provide valuable assistance with the technical aspects of construction cost planning. However, you should realise that different stages of construction entail varying budgets. Usually, the largest budget items arise early on, including plot acquisition, demolition, surveying & design fees, etc. Conversely, later steps such as utility connections and interior decoration usually represent a smaller portion of the budget.

Overall, some of the typical stages of construction and their shares of the total cost are the following:

• Land acquisition and associated costs: 30%
• Structural costs: 20%
• Interior costs: 20%
• Connecting to utilities: 10%
• Project management: 10%
• Building design: 5%
• Specifications: 5%

These plots are more likely to get planning permission and have access to services. You can also consider brownfield plots, which are previously developed land that has been cleared or abandoned, rather than undeveloped greenfield plots featuring environmental or agricultural value. These options are more likely to be cheaper and have less impact on the landscape.

 A. DEMOLITION

Your plot may have an existing building you’d like to bring down. Demolition costs can range from £2k to £40k depending on the size and the scope of the project, and the location of the building. Typically, it is recommended to allocate £30-80 per square metre of work. For example, if you’re refurbishing a 200 m² house, you might expect to pay between £6,000 and £16,000 for demolition and carting away depending on the extent of works required.

B. SUBSTRUCTURE

The foundation and floor structure can be particularly challenging to budget for. The true extent of the job may remain unknown until you start breaking ground. Factors such as ground conditions, existing services and specifications from the local planning authority or inspector will affect the type of foundation required. For example, a simple strip foundation will be cheaper than a piled foundation or a raft foundation.

Basement

A basement is one of the most expensive options for a substructure, as it involves digging below the ground level and creating a waterproof shell. The shell alone can cost between £2,000 and £2,500 per square metre plus Main Contractors Profit. The fit-out costs can add another £1,500 or more per square metre. Therefore, the total cost of a basement will usually reach over £3,500 per square metre once the fit-out costs are included.

Piling

Piling is another costly method that is used when the soil conditions are not suitable for conventional foundations. It involves driving piles the ground to support the structure above. Piling has many associated costs, such as hiring and transporting the piling rig, paying for the crew and machinery, removing the excess soil, testing and certifying the piles, designing the piling layout, and constructing a capping beam to connect the piles.

Strip Foundations

Strip foundations are the most common and cost-effective method for smaller projects, such as residential extensions, as well as single and two-storey new builds. Strip foundations consist of digging trenches and filling them with concrete to create a continuous base for the walls.

Block and Beam

Block and beam is another relatively affordable method of creating a slab and base for the building. It involves laying precast concrete blocks that span across the foundations. The block and beam itself can cost between £70 and £90 per square metre to supply & install. Along with this, there are additional costs for the slab build-up, such as 150 mm rigid insulation (between £45 and £65 per square metre), 75 mm screed (between £27 and £36 per square metre), and damp-proof membrane, Visqueen or Gauge Sheeting (between £2 and £5 per square metre). One of the advantages of the block and beam method over a concrete slab is that it does not require a layer of 150 mm compacted hardcore or 50 mm sand blinding below it, as it sits above the ground level, therefore this is cost-effective.

Concrete Slab

A concrete slab is a solid base that is poured directly onto the ground after preparing it with a layer of hardcore and sand blinding. A concrete slab can cost between £180 and £225 per cubic metre, which translates to £27-£33.75 per square metre for a 150mm thick slab, or between £54 and £67.50 per square metre for a 300mm thick slab. On top of this, there are also costs for insulation, screed, and damp-proof membrane, as mentioned above.

Underpinning

Underpinning is a particularly expensive method that is used to strengthen or stabilise an existing foundation that has been damaged or undermined by subsidence or other factors. Underpinning involves digging under the existing foundation and pouring concrete in sections to create a new deeper stronger foundation. This work can cost between £2,500 and £3,000 per section, each measuring 1m in length and 2.5m to 3m in height. Therefore, underpinning a 20m long wall with 2.5 to 3m high pins will typically cost between £50,000 and £60,000.

C. SUPERSTRUCTURE

External Walls

Estimating the cost of the remaining structural elements is generally more predictable. Load-bearing walls, which are essential for structural integrity, typically account for around £30,000 to £45,000 in an average-sized house. That being said, the chosen construction system will affect the cost of materials and labour.

A standard external wall build-up, which consists of 100mm blockwork, cavity/ insulation, and facing bricks, typically cost between £320 and £380 per square metre. The exact cost depends on the type of insulation and bricks used. For instance, rigid insulation such as Kingspan is more expensive than quilt insulation in the cavity. Similarly, some facing bricks can cost more than others depending on their quality and appearance. For example, you can find bricks that cost £0.50 each, which results in £30 per square metre (for material only), while other brick options may be priced at £2 per piece or £120 per square metre (for material only). Alternative external wall finishes, such as stone or timber cladding, will add even more to your construction budget.

Internal Floor Structures

The cost of internal floor structures, including joists and quilt insulation, is typically between £90 to £130 per square metre.

D. STRUCTURAL STEEL, LINTELS & PADSTONES

When it comes to structural steel (beams and columns), you can expect to pay between £3,200 to £4,500 per tonne. This rate is all-inclusive and includes the cost of design, fabrication, supply, craneage, installation, and fixing. In addition to this, you need to consider items like padstones, which support the ends of beams, costing £80-£125 to supply and install, as well as lintels with a price tag of £30-£65 per linear metre depending on the type and thickness of lintel used.

E. ROOFING

The cost of roofing varies widely depending on the type and quality of the materials used. A typical flat roof with a single-ply membrane can cost from £300 to £370 per square metre, while a slate roof including the full build-up can have a price range of £420 to £480 per square metre.

Please note that these rates do not cover the expenses of rooflights, leadwork, guttering, fascias, and soffits. UPVC guttering and downpipes have a price of around £22 per linear metre, while aluminium alternatives cost around £45 per linear metre. Standard rooflights that are not toughened or walk-on are usually priced at £550 per square metre, while you can expect to pay over £1500 per square metre for toughened and walk-on rooflights models. Finally, if you require leadwork, the price starts from £25 per linear metre.

F. EXTERNAL DOORS & WINDOWS

The costs in this category may widely vary depending on the frame type and glass chosen. For standard UPVC frames and double-glazed glass, the price ranges from £350 to £450 per square metre. If you opt for aluminum frames with standard glass, the cost is going to rise to £550-£675 per square metre. Timber sash windows typically fall within the range of £600 to £800 per square metre.

G. INTERNAL PARTITIONS & CEILINGS

For a standard internal wall with timber or metal studs and quilt insulation, the average cost is approximately £85 to £90 per square metre. This estimate is for single-boarded walls. If the wall is double-boarded, an additional £35 to £40 per square metre should be added.

As for ceilings, including metal track, boarding, and quilt insulation fixed to concrete, the typical price is around £55 per square metre. Additionally, it’s important to consider the cost of plywood used for securing heavy items like kitchens and sanitary fixtures. For instance, using standard 18mm plywood would require an additional £18 to £20 per square metre in the relevant areas.

H. JOINERY & CARPENTRY

For standard internal door sets, including the door, architrave, lining, and ironmongery set, the cost generally falls within the range of £600 to £650 per supply and installation.

Standard skirtings typically cost around £17 per linear metre.

A timber internal staircase, assuming a standard design with a balustrade, would cost approximately £4,000 per flight.

However, for higher-spec projects featuring bespoke products, the costs can be three to five times higher than the mentioned range. In the case of large high-spec houses, the overall expenses for bespoke carpentry may range from £70,000 to £100,000.

I. KITCHEN

The cost of a kitchen can vary significantly depending on its size and specifications. For a standard house or flat, a supplied and installed kitchen usually falls between £3,000 to £5,000. However, for higher-spec houses, particularly in London, it’s not uncommon for people to spend between £20,000 to £100,000 on a highly bespoke kitchen.

J. FINISHES

When it comes to this category, it typically encompasses painting, skimming, floor finishes, and tiling.

Painting

A standard paint, such as Dulux, with a mist coat and two top coats, costs around £15 to £18 per square metre. This concerns wall and ceiling painting alike. Glossing to architraves and skirtings is usually priced per linear metre, ranging from £4 to £8.

Skimming/Plastering

For standard 3mm skimming/plastering internally, the average cost is usually between £17 to £21 per square metre, depending on the specific requirements.

Floor Finishes

Your expenditure on floor finishes can vary greatly based on the materials you prefer. Basic carpet or vinyl can be supplied and installed for approximately £20 to £30 per square metre. Mid-range carpets range from £25 to £35 per square metre, while hardwood timber flooring, depending on the quality, generally costs between £70 to £120 per square metre for supply and installation.

Floor and Wall Tiles

The cost to supply and install tiles, may range from £70 to £150 per square metre depending on their type and location. The final price is heavily influenced by the selected tiles: while you can find affordable options under £10 per square metre, high-quality products are priced between £40 to £70 per square metre for supply only.

K. ELECTRICAL WORKS

The price of an electrical installation in a standard house is typically made up of the following elements: first fix, lighting, switches, sockets, as well as testing and commissioning.

First Fix

The first fix involves such works as cabling, installation of cable trays, back boxes, noggings, as well as fixing drilling and coring. The cost of materials and installation fees for the first fix is typically in the region of £2,000 to £5,000 for an average-sized house, depending on the size of the property.

Lighting

The prices of lights can vary significantly based on your specifications. Standard LED downlights, for instance, typically range from £10 to £15 each for supply. If you add installation and profit, the total cost per downlight may reach £70-£95 per point. For higher-end options like Astro downlights, the supply costs range from £100 to £150 each, resulting in a total cost of £200 to £250 per downlight to supply & install. For high-end properties that have lighting such as Chandeliers, these can cost thousands of pounds each for supply and installation.

Switches and Sockets

The costs associated with switches and sockets follow a similar pattern as lighting. Standard switches and sockets generally range from £10 to £15 each for supply. When factoring in installation and profit, the total cost typically falls between £70 to £95 per point.

Testing and Commissioning

While some electricians may include testing and commissioning within their installation costs, others charge separately for this service. On a house or flat, if charged separately, the cost for testing and commissioning usually ranges from £100 to £300.

L. MECHANICAL WORKS

These works involve the installation and maintenance of mechanical systems and equipment related to first fix, heating, cooling, plumbing, sanitary and ventilation. The cost of mechanical works can vary depending on factors such as the size and location of the property, the complexity of chosen systems, as well as materials. We have already provided some crucial details to consider when selecting your heating system, and how we’d like to focus on other key components of mechanical works and their associated costs.

First Fix

The first fix entails tasks such as drilling, fixing, and copper work. This could require two men for up to a week. As a result, the cost of the first fix typically ranges from £2000 to £5,000 on a house of no more than 200m2.

Copper is the primary material used for heating systems in UK houses, but it can be fairly costly. UPVC is a cheaper alternative, although it is generally seen as substandard for first-fix heating installations in the UK. Therefore, it is less commonly used.

Above Ground Drainage

Typically, the cost of above-ground drainage falls within the range of £1,000 to £4,000, depending on the size of the house. This work involves the installation of soil vent pipes that connect toilets to the below-ground drainage system, which is typically done using UPVC pipes. Waste pipes from handwash basins, baths, showers, and kitchen sinks also use UPVC.

Sanitary

The costs associated with sanitary fixtures can vary significantly from project to project. For more budget-friendly options, expect to pay around £2,000 per bathroom for the supply of sanitary items such as sinks, taps, wastes, baths, showers, mixers, shower screens, and water closets. If you prefer higher-end products, the cost can range from £4,000 to £10,000 per bathroom for the supply of these items.

The cost of installation by a plumber typically falls between £300 to £350 per day plus Main Contractors Profit, with a standard-sized bathroom usually taking around 3 to 4 days to complete.

Heating System

The cost of the heating system for a self-build house is a crucial consideration, as it not only influences the upfront expenses but also long-term energy efficiency and sustainability.

In London residential projects, underfloor heating is the most common heating method. The cost for underfloor heating typically ranges from £80 to £95 per square metre in London. A standard boiler, including supply and installation, usually costs around £2,750. However, higher-end products can increase the cost to somewhere between £3,000-£5,000 for supply and installation. If you prefer radiators, which is typically a cheaper option than underfloor heating, the cost per item is usually £275- £350 to supply and install.

When it comes to heating system options, including some eligible for incentives in the UK, they include the following.

Gas boilers are perhaps the most common and cheapest types of heating systems that rely on natural gas to heat water. The hot water then circulates through radiators or underfloor heating pipes. Gas boilers are easy to install and maintain. However, they produce carbon emissions since they utilise fossil fuels. As part of the government’s plan to reduce greenhouse gas emissions and achieve net zero by 2050, gas boilers will be banned for new builds in the UK from 2025. Hence, it makes sense to seek more eco-friendly alternatives, especially when government schemes and grants encourage the transition to renewable heating systems.

One of such alternatives is a biomass boiler. Water heating is achieved by utilizing organic materials like wood chips, pellets, or logs. This option is cheaper to run than gas boilers. On the other hand, biomass boilers have higher installation and maintenance costs as well as require more space for storage and delivery. Biomass boilers are eligible for the Renewable Heat Incentive (RHI), which is a government scheme that pays homeowners for generating heat from renewable sources.

Heat pumps are one of the most energy-efficient and environmentally friendly types of heating systems in the UK. They use electricity to extract heat from the air, ground, or water and transfer it to your house. While heat pumps are quite expensive to install, they have lower running costs. Besides, they qualify for government incentives such as the Boiler Upgrade Scheme, which provides £5,000 grants to homeowners who wish to switch from traditional boilers to heat pumps.

Cooling

Air conditioning systems in UK properties are considered luxury items due to the temperate climate. As a result, they tend to be expensive, with costs ranging from £3,000 to £5,000 per room for installation. For example, if you’d like to have air conditioning units in five rooms, the total cost can be between £15,000 and £25,000. Considering the relatively short period of use during the hottest months of July or August as well as the associated high costs, air conditioning is primarily requested in high-end residential projects and is not a standard item.

Ventilation

Ventilation is typically required in bathrooms, toilets, and kitchens. The cost of supplying and installing each vent generally falls within the range of £250 to £320 to supply and install. A small flat or house with only one bathroom and kitchen would need at least two vents. Larger properties with multiple bathrooms require more vents, and their cost is calculated by multiplying the number of units by the rate throughout the property.

M. EXTERNAL WORKS

These works include landscaping and garden-related expenses, such as lawns, planting, and paving. On most projects, the cost of external works is usually in the region of 5% to 15% of the total project cost.

N. SCAFFOLDING

Scaffolding is typically charged based on the area covered, ranging from £30 to £55 per square metre. For example, if a project only requires scaffolding for a 30-square-metre area of the front elevation, the estimated cost is approximately £1,500. If scaffolding is needed for all four elevations of a house, the cost rises up to £6,800 based on a 120-square-metre area.

Other factors to consider for scaffolding include a top hat/tin roof, Monarflex, debris netting, and weekly inspections. Monarflex or debris netting will incur an additional charge of £2 to £4 per square metre. If a tin roof is required, the cost will range from £2,000 to £5,000. These additional items, particularly the tin roof/top hat, can significantly increase the overall cost of the scaffold.

O. PRELIMINARIES

Preliminary costs encompass both one-time expenses and weekly costs multiplied by the project duration.

When it comes to weekly costs, they cover services such as site management, project management, and quantity surveying. You will also need to add the cost of plants and tools, site CDM compliance, fuel, and transportation.

The one off costs are things like design costs, site establishment charges, insurance, hoarding & fencing, health & safety, testing for asbestos, air testing sound testing

P. CONTINGENCY

It is a good idea to set aside a contingency fund of 10-15%. It will allow you to cover unexpected variables arising during the self-build process. These may include unforeseen site-specific challenges or fluctuations in the construction supply chain.

Tax Benefits for New Build Houses

When calculating the cost of building a house, you should also consider tax benefits. They are able to lower the expenditure of building a house in comparison to buying one.

• Stamp Duty. When buying a plot for construction, you pay Stamp Duty calculated based on the value of the land alone. In contrast, when purchasing a house, Stamp duty takes into account the cost of the land and existing building.
• Community Infrastructure Levies (CIL). In London, CIL charges can be substantial, but self-builders are generally exempt from these levies. To claim the exemption, you must own the property and occupy it as your principal residence for a minimum of three years after work completion.
• Planning Contributions. Local authorities may require financial contributions towards affordable housing in the borough. The specific costs of planning contributions can vary significantly, with outer areas having fewer or no contributions, while central zones feature higher costs.
• Value Added Tax (VAT). VAT is typically applicable to residential refurbishment projects, with a rate of 20% added to the total cost of the works. On the other hand, construction costs for a genuinely new, self-contained house are usually exempt from VAT. Consequently, many choose to demolish existing buildings and construct new ones to avoid VAT. That being said, VAT still applies to consultants’ fees and other non-construction expenses.
• Capital Gains Tax (CGT). If a self-built house is your primary residence, there is generally no CGT to pay should you make a profit when selling it.

 

Connection to Utilities

Connecting a newly built house to utilities, such as water, gas, electricity, and sewage systems, is an essential aspect of the construction process. The cost of utility connections can vary based on several factors.

One such factor is the distance between the property and the utility connection points. If the property is located far from the existing utility infrastructure, there will be additional expenses for extending utility lines and installing the necessary connections. Typically, the prices start from £2,500 per service to have a new connection. Sometimes, it makes more sense budget-wise to seek alternatives to public utility infrastructure. For instance, if you’re located far away from the sewer main, it may be cheaper to install a private drainage system such as a septic tank.

The overall cost can also be influenced by the intricacy of the installation. Usually, connecting to utilities in urban areas with well-established infrastructure is relatively straightforward, resulting in lower costs. On the other hand, connecting in rural or remote areas where infrastructure is limited or non-existent can be more challenging and costly.

On top of that, there are fees associated with obtaining permits and approvals for utility connections. These fees vary depending on the local regulations and utility providers’ policies.

Building Design

The design of a house sets the foundation for the entire construction process. It encompasses the size, layout, architectural style, and unique features of the building. It is no secret that simple design solutions are cheaper than intricate ones involving unconventional shapes or complex architectural features. Hence, before you make a final decision regarding building design, it’s worth considering a few factors:

These are critical aspects of the building, which remain integral throughout its lifespan. Choices made during the initial stages of the project have the potential to significantly impact homeowners. To navigate these decisions with confidence, you may need guidance from a consultant quantity surveyor. Thanks to their expertise in construction costs, material selection, and project management, you are able to make decisions meeting your budget, vision, and desired outcome.

Specifications

The specifications refer to the level of quality and performance of the materials and systems chosen for your house. Besides influencing the overall cost of construction, they also affect its speed since bespoke solutions require more time to produce and install.

Opting for high-quality materials, premium finishes, and luxury fixtures can significantly increase your expenses. On the other hand, more cost-effective options can help reasonably cut your expenditure while providing good value for your money.

You don’t have to make decisions regarding specifications, especially for interior works, in the early stages of construction. If you have a tight budget, it’s best to focus on the essentials while leaving such items as flooring and landscaping for later.

Project Management

Project management involves a wide scope of work concerning planning, coordination, and supervision of the construction process. In particular, it deals with such aspects as ordering materials, scheduling works, dealing with problems, hiring subcontractors, etc. Project management comes in various forms depending on whether you prefer to do the work yourself, hire professionals, or a combination of both.

Self-management gives you the most control and flexibility over your project, as well as the potential to save money on labour costs. However, it also requires a lot of time, effort and skills to manage a complex project successfully. You need to be confident in dealing with contracts, budgets, regulations, and technical issues.

Hiring a main contractor is a convenient alternative since one company takes care of everything for you. On the other hand, it limits your involvement in your own project, as well as increases the cost of construction. Alternatively, you can act as a main contractor yourself and take on subcontractors for the various construction tasks. This will save you money but require more commitment to the process of building.

You can mix and match different options depending on the stage or aspect of your project. For example, it is possible to hire a professional project manager for the initial planning stage but self-manage the rest of the project. Or you can hire a main contractor for the structural works but self-manage the interior works.

Additional Cost Considerations

Beyond the core expenses of materials and labour, it is important to account for extra costs in your budget.

Is Building a House More Economical than Buying an Existing One?

Yes, building a home on your own is typically cheaper than buying a new house from a developer. However, to effectively estimate the cost of building a house in London, you need to consider a multitude of factors such as land costs, construction expenses, foundation and superstructure investments, utility connections, and others.

Remember that self-build projects entail various complexities and potential surprises. By conducting careful research, seeking professional advice, and incorporating contingencies, you can navigate the journey of self-building with greater confidence. The result is a dream house that meets your budget expectations.