When to insure your self build project

Protecting your self-build

Approximately 13,000 people build their own homes in the UK each year. Inspired by hit TV shows such as Grand Designs, self-build offers the chance to create a house that's constructed around the owner's lifestyle and is likely to deliver a larger profit when sold. Even the most standard self-build homes provide more space for the money and the chance to live in a more environmentally sustainable home.

Self-build: A growing trend

Launched in 2016, Right to Build legislation helps self-builders and custom builders find a plot to build on. The Self-build and Custom Housebuilding Act 2015 requires local authorities to keep a register of individuals and groups and this legislation and ensure that they have enough plots available to meet that demand. They also need to demonstrate that planning permission (or permission in principle) is granted for these plots within three years.

Recent Government figures show a 25% increase in the number of people starting their own self-build housing projects in the last 12 months.

SELF-BUILD – THE FIGURES

58,813 individuals were on the register in total, an increase of 25% from a year earlier

759 groups were on the register in total, an increase of 14% from 2019-2020

8,309 planning permissions were granted for serviced plots suitable for self and custom build, an increase of seven per cent from the same period a year earlier

Go to SelfBuild Insurance for more information or to get a quote for your project.

Self-build: An accessible option?

Most self-builds are simple three and four-bedroom family homes rather than 'statement houses'. The latest series Grand Designs: The Streets profiles Graven Hill in Oxfordshire, the first self-build village in the UK. The show explores how self-build is far more accessible than most people realise. Graven Hill helps make self-build possible across a broad range of budgets and simplifies planning permission. Every plot has a 'plot passport', which sets out essential features such as the plot size, maximum floor area, maximum ridge height, and the number of bedrooms. It also guides the self-builder through the overall building standards of the homes, which are higher than standard Building Regulations. While the traditional planning permission route typically takes 8-13 weeks, Graven Hill takes just 28 days from submitting the planning application. The village also states that planning permission is not required for custom-built homes, simplifying the process further.

Protecting your investment from day one

Building sites can be risky places. Accidents, theft, and unforeseen events can add significant costs to the budget. Despite this, it's surprising how many people do not have self-build insurance in place from the start of the project, especially given that a new home is likely to be their largest investment. A self-build insurance policy covers the owner, their builders, and the entire building site during the construction process.

What does self-build insurance cover?

Self-build insurance typically protects against:

Contractors All Risk: Covers things such as fire, theft, vandalism, flood, and storm damage.

Employers' Liability: Anybody working on site is an 'employee,' and the self-builder is the main contractor, which means they are liable for their welfare and any injury, loss, or death while working on the build.

Public Liability: Protects against damage, injury, or loss suffered by third parties or the public. Public liability also covers damage to the property or injury to individuals outside the site if directly caused by the activities on site.

Legal Expenses: Legal expenses is for action taken against the self-builder by others or for the need to act against third parties.

Contract Works: This covers the potential cost of repairing or replacing any damaged part of the build.

Self-build insurance vs builder’s insurance

There's no guarantee that a self-build contractor will have enough insurance to cover a self-build development, it’s vital to check this in advance. When using subcontractors, the self-builder becomes the main contractor and employer of everyone working on site. While subcontractors may carry business insurance, they are more likely to claim on the owner's insurance if they suffer an accident during the build.

Before releasing funds, lenders may also require proof of a specific self-build insurance policy. Self-build insurance policies for new builds are calculated on rebuilding costs, and a home of around 140m² could cost between £600 and £1200.

Buying the right type of insurance

Use a dedicated self-build insurance expert to ensure you’re not given contractor’s insurance by mistake. Self-build insurance is less expensive and is designed to specifically cover the self-build process as opposed to a general contractor’s insurance.

Self-build build insurance covers the construction phase, so owners will need a standard home insurance policy when the home is finished (most self-build insurers can arrange this).

A self-build warranty is an additional option that provides a structural warranty of an architect's certificate and should cover any structural issues that occur in the years following the completion.

Self-build policies do not cover personal possessions and furniture policy, so it’s important to wait until the project is completed before storing any furnishings in your home. Home contents insurance will cover the contents of the home once it’s finished.

No one wants to think about the possibility of death or an incapacitating illness delaying the completion of a self-build home, so it’s sensible to arrange life and personal injury cover. Ideally, this cover will protect both the owners and potentially their beneficiaries.

SelfBuild Insurance is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent broker providing a wide range of policies to tradesmen and construction workers.

This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note, we have relied on information sourced from third parties, and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to the fullest extent permitted by law.