Tim Doherty, of The National Self Build & Renovation Centre gives his advice on how to keep costs down on your project

Plan properly, and stick it! – It sounds obvious but a few changes and extra pounds here and there can soon add up. Set a realistic and detailed budget – be ruthless, but don’t cut too many corners, as you may end up paying more to put things right in the long run. Allow a 10–20% contingency budget for any unforeseen costs and issues along the way. Try not to deviate from your original plans unless it’s absolutely necessary - it’s easy to get carried away and start changing your designs, but changes will undoubtedly affect your budget.  If you set a reasonable budget and stick to your initial plans, you could save a considerable amount.

Be cash positive – With any building project, cash-flow is king and time is money. If you are unable to buy the materials you need, when you need them, this will hold up your project. Similarly, if you are unable to pay your builder’s invoices, they will quickly move on to another job, leaving you with a half finished project. Your project will run smoother and finish quicker if you have money to pay your bills and buy materials.

If you don’t have a large amount of cash sitting in your bank before you start, then an advance stage payment mortgage will give you the positive cash-flow you need. BuildStore’s Accelerator advance payment mortgage provides 95% of land or project costs in advance, and 95% of your build costs, released in stages, at the start of each build stage, as opposed to the conventional mortgages which release funds in arrears.  It also means that you don’t need to sell your house to release equity to raise funds – so you can live in your home throughout the project, saving you money on temporary accommodation.

Save on stage valuations - Some self build arrears mortgages require a valuation before money is released at each stage of the project. These can cost anywhere between £65 and £100 per valuation, and typically, a self build project will require 4 or 5 valuations. Advance stage payment mortgages, such as the Accelerator, rely on stage certificates from your warranty provider, NHBC registered builder or a professional supervising the project (e.g. an architect) to release funds for the next stage. If you are already employing a professional, these certificates should not cost you anything.

Buy now, save on Stamp Duty – As of 2nd September 2008, the threshold for paying stamp duty was changed to properties and land priced over £175,000.  This will be returned to its usual £125,000 threshold in September 2009, so if you before then, you could save yourself up to £1,750 on plots or renovation projects that are below £175,000. PlotSearch is currently showing that almost 60% of self build plots available and a third of renovation and conversion opportunities are priced below the threshold.

Convert a non-residential building – You can claim back the VAT on any construction services and building materials on the conversion of a non-residential building, e.g. a barn, or any building that has not been lived in for ten years or more.

Renovate an empty property – Recent legislation changes mean that renovation work is charged at a reduced VAT rate of 5% on properties that have been empty for two years or more (up from three years), so make sure you inform your builders and check your invoices. For properties that have been vacant for 10 years or more, no VAT is charged on building work.

Project manage – Project managing your build could save you up to 20%, although it does require a significant investment of your time. Acting as project manager on site will allow you to keep an eye on every step of the building works, so hopefully, you get the results you want and there be fewer costly mistakes. You can also ensure that things are kept to budget and running to schedule – extra labour days will cost you.

Negotiate with contractors – It’s best to get a few quotes from tradesmen for your project, and try to be as specific and give as much detail as possible when dealing with builders. If you do get a high quote, go back to them and negotiate; ask where savings could be made and if they could bring their quote down in line with other quotes you’ve already had.

Use a non-VAT registered builder – When sourcing tradesmen for your home improvement project, seek out smaller firms. Any company which has an annual turnover of more than more than £64,000 is registered for VAT, which will mean you will pick up and extra 17.5% on your invoice. If you are a self builder, VAT should be zero-rated for any construction work by builders.

Do it yourself – If you are a competent DIYer, with some basic practical skills, and if you have the time, it is worth doing as much of the building work and labour as you can. Labour costs are a substantial portion of your budget, so roll up your sleeves and get stuck in. Whilst there are certain jobs that you must employ qualified tradesmen for, such as electric work and plumbing, most people can reduce their labour costs by doing some of the labour themselves.

Use all your space - Older properties in particular can have large areas of space which can be put to good use, rather than spending money on building extensions to create more space.  Converting loft and basement space, or even a garage can help you maximise the space inside, without having to build new space, which can cost much more and take longer.

Go Green - By installing and incorporating energy saving systems, materials and products in to your home, not only will you benefit from the payback in the long-term by reducing your energy bills, but you are also entitled to a reduced VAT rate of 5% if you are self building or renovating.

Get a TradeCard – The cost of materials is a substantial proportion of any self build or renovation budget, but a BuildStore TradeCard can help make the most of that budget. TradeCard is a unique privilege card, available free of charge and is a must for any self builder or renovator. It provides exclusive discounts and special offers on building materials, plant and tool hire, roofing, insulation, white goods, flooring and finishes – everything you’ll need to complete your new home – from leading suppliers and builder’s merchants. This is backed up by a price promise guarantee, a realistic credit limit, and a dedicated support manager to advise your purchases.

Claim back VAT on materials – Self builders should keep all their receipts for building materials, as you are entitled claim back the VAT paid on building materials through HM Revenue & Customs. This must be done within three months of the completion of the house, the forms must be filled in correctly, and all receipts, invoices and supporting documents (e.g. completion certificate) should be provided in order to qualify for a rebate.

Sell your surplus materials – If you at the end of your build you are left with surplus materials which you are unable to return, don’t let them go to waste. There are a number of websites for buying and selling surplus building materials that allow you to list your excess materials for sale.