How Much Does It Cost to Build a House?

Building a house is a complex process with a wide range of potential costs. Based on industry data and completed projects, the average cost of building a house with a normal standard of finish is approximately £1,700 to £4,000 per square metre.

The most economical projects can come close to £1,500 per square metre, with simpler designs, basic solutions, and standard materials, may cost around £2,300 per square metre, while high-end, bespoke houses can exceed £5,500 per square metre.

For a 150 m² house, this means costs could range from around £345,000 for a basic finish to over £500,000 for a high-end finish.

These figures include labour and materials but exclude additional costs such as land purchase, planning fees, and unexpected expenses like structural issues.

Kit-house, modular house or an architect-designed house?

An important choice in terms of project cost is whether you build a home uniquely and personlized for you and your family, or whether you opt for something more standard with a prefabricated home.

You could go for a kit-home “which is where packages of materials are supplied for a specific house size for you to build and finish.” Or you could purchase a modular home, where you can choose among an array of standard designs consisting of factory-made sections that are transported and assembled to your plot. 

Generally, kit and modular homes can be built at a slightly lower cost per m² than a bespoke one-off build, thanks to standardized design, bulk fabrication, and shorter construction time.

Of course, the standard options can’t compete with the personalization and myriad of choices on offer when you design your own home from scratch.

It is for many the only choice to achieve their dream home. Also, some premium modular homes or kit houses may be as expensive as a bespoke home, or even more expensive. 

In some cases, an architect-designed home may also be the only choice - if your land poses any specific limitations or challenges, you may need an architect to overcome this in the house design. 

What Do Other Necessary Services Cost?

When building a house, you must expect costs beyond the actual construction. Below you'll find an overview of some costs you need to include in your calculations:

Architect costs: From £10,000. These costs go to architectural services in the form of work with your planning application. If the house is to be architect-designed, and not based on standard solutions, this budget item will become significantly more expensive. In such cases, this point can come up to £40,000 and more.

Planning application fees:  Planning application fees for a new single dwelling can vary by location, with different fee structures in England, Scotland, Wales, and Northern Ireland. These fees are subject to periodic review, so it's advisable to check the current rates on your local authority's website or the Planning Portal.

Structural Engineer: From £2,000. It will likely be necessary to bring in a structural engineer (or other suitable professional) to carry out the design of concrete or timber structures. The price will be higher with complicated constructions.

Site survey and setting out: Approximately £1,000. Before groundwork begins, it's necessary to have the plot accurately surveyed.

Building Control fees: Varies by local authority and project size.

Utilities: Utility connections, including electricity, water, and gas, typically cost between £5,000 and £25,000, depending on the site’s location and complexity. These additional costs are essential to include in your overall budget.

Project management: Varying. This task will normally be included in offers from main contractors but can become a separate budget item if you contract an architect as project manager or if you hire a designated project manager.

What Drives the Price of New Builds?

Size

This is a given - the larger the house is, the more expensive it will be. A large house requires more materials, work hours, excavation, and more than a smaller house.

On the other hand, it is worth noting that the price per square metre is likely to be lower on a larger project due to the economics of scale.

Another reason is that there are certain expenses that don't depend on the size of the project. These costs will be shared by less square metre in a smaller project, leading to a higher square metre price.

Construction

Construction method will have a lot to say for the price of your new housing project. The most common building method in the UK is with a main structure in timber.

Buildings in concrete or masonry will be more expensive. Yet, brick and concrete structures are also more durable and require less maintenance over time. 

Design and Complexity

How the house is constructed, in terms of layout and features, will also affect the total cost. A simple rectangular house will be cheaper than one with a more complex shape. 

You also need to consider what kind of features and design you want. Will the house have any balconies or roof terraces? How many storeys, and will you add special features to them such as a mezzanine floor?

What shape of roof will you have - will it be a plain gable roof, a flat roof, or something fancy like a mansard roof? Custom features, such as bespoke cabinetry, high ceilings, or unique architectural details, add to the budget

The Plot

The plot will also be decisive for the total cost. For one thing, the price of the plot itself is of course key. Furthermore, the landscape, soil type and condition, site access, the slope of the plot, regulations, and more can create challenges and increase cost.

Take your time in choosing your plot, and be sure to make yourself very familiar with any and all challenges it may pose. 

Number of Bathrooms, Wet rooms, and Kitchens

Another important price driver is the number of bathrooms, wet rooms, and kitchens in the home. These are usually the most expensive rooms to build. It's therefore possible to save a lot of money by reducing the number of such rooms.

If the budget is tight, it pays to carefully assess the need for these types of rooms.

Technical systems 

Technical solutions often constitute a significant budget item. By this, we mean technical systems such as ventilation, heating, and lighting. Of course, you have a lot to say here.

You could go for the bare necessities and standards solutions, or you could install a wider array of solutions, with a corresponding price jump.  

Underfloor heating, heat pumps, smart home technology, and more may increase the price, but offer comfort and better energy utilization. In the long run, it could pay to choose such energy-efficient measures.

For installation of certain types of heat pumps, you can also get grants from the UK government's Boiler Upgrade Scheme.

Material Choices

As a homebuilder, you must choose which materials to use, both externally and internally. This applies to everything from paint, tiles, and cladding, to kitchen and bathroom fixtures. Here you have great opportunities to make savings, but it doesn't necessarily pay to let a lower price compromise quality.

To find quality materials at low prices, it pays to stay updated on campaigns and offers from different manufacturers and outlets.

If you're early with planning, the chance increases that you'll find the materials and products you want at a lower price. This assumes that you have dry and secure storage options until the materials need to be installed.

Custom-built or Standard?

Regarding interiors, you should also remember that solutions bought in stores will generally be significantly cheaper than custom-built special solutions.

This applies to both kitchen fixtures, bathroom furniture, storage, and wardrobes. Some materials are more commonly purchased by the contractor. This usually applies to external cladding, roof tiles or other roof covering, and windows. 

DIY

As a house builder, you can also save on certain budget items by doing parts of the job yourself. Work you can manage yourself without extensive experience includes painting, and possibly floor laying and mounting cladding. However, it's wise not to take on too much DIY work.

Also remember that all DIY work should be cleared with the contractor when you write the contract and progress plan. It's important that DIY work doesn't create delays for the remaining work. Also make sure that your contribution will maintain high enough quality so that the house doesn't decrease in value.

Building a House: An Example of the Costs Involved

To get an understanding of price drivers when building a new house, we have included below an actual quote for building a detached house totalling 205 square metres over 3 floors.

Note that all projects are different, so this is only meant as an example (all figures rounded to the nearest £1,000, prices include materials):

Costs:

Excavation: £42,000

Foundation: £37,000

Carpenter, tiler, and painter: £233,000

Electrician: £26,000

Plumber, including underfloor heating: £76,000

Ventilation: £11,000

Roofer and sheet metal worker: £26,000

Setup and Operations: £37,000

Bathroom fixtures (3 bathrooms): £12,000

Parquet flooring and tiles: £17,000

2 kitchens: £32,000

Total: £549,000

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This project ended up at approximately £2,680 per square metre, labour, and materials.

Note that new builds are usually zero-rated for VAT, and homeowners don’t pay VAT on the build itself.

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In addition came costs for:

Architect: £21,000

Design carpenter and concrete: £11,000

Building Control: £1,000

Various administration, application: £3,500

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Including these costs, the total was £585,000.

Is it More Economical to Buy Used or Build New?

There's no definitive answer to this question. In some cases, you can find affordable used homes with a standard you're satisfied with. Then buying used will be the most economical solution.

However, this changes if you consider the standard too low. In that case, a complete interior renovation may be necessary, which will involve extensive costs and work. Below we compare the choice between buying such a home and building new:

Buying used:

Price for 250 square metre home: £750,000

Costs for a complete interior refurbishment: £1,000* x 250 square metres = £250,00 

Total price for buying used home, plus upgrade to today's standard: £1,000,000

*1,000 is an approximate cost based on comprehensive interior refurbishments

Building new:

Plot price: £250,000

Building costs: £2,300 x 250 square metres = £575,500 (Average price per square metre for building a home with normal standard is £2,300.)

Architect and design: £33,000

Total: £858,000

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In this example, the new build ended up as the cheapest alternative, but this obviously varies by many factors. This example is simply meant to illustrate how you can compare costs and what refurbishment vs. new build may cost in 2025. Building may not always be cheaper but it is often more cost-effective if you already own land or if local property prices are high.

Find The Right Builder

If you've decided to build a house, the next step might be to get in touch with suitable contractors. On such an extensive project, the most common approach is to organize the process as a main contract. This means that you as a homeowner only write a contract with one construction firm.

This firm divides the job themselves, in addition to having subcontractors who cover work in the other fields. The alternative to a main contract is a split contract. Then you write contracts with different contractors for the different fields included in the project. Regardless of how you choose to organize your house building project, we can help you find the right actors

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Below is a checklist of Important considerations when choosing a contractor include:

1. Check their membership in relevant trade bodies (Federation of Master Builders, TrustMark)

2. Verify their experience with similar projects

3. Review their financial stability

4. Check their insurance coverage

5. Ask for and contact references

6. Ensure they're familiar with local building regulations

7. Compare quotes from multiple contractors

8. Review their proposed timeline and payment schedule

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Remember that under UK law, all new builds must comply with current Building Regulations and meet energy efficiency standards. Working with experienced contractors who understand these requirements is crucial for a successful project.