Godwit House in Northumberland by Mawson Kerr Architects. Photo by Jill Tate.
Building your own home can be one of the most rewarding experiences of your life, particularly in the UK, where opportunities to build new houses are limited.
Whether you're dreaming of a bespoke family home or looking to maximise the value of a plot, one of the first questions on your mind is likely to be: how much will it all cost?
In the guide below, you’ll find everything you need to calculate the cost of building a new house, including acquisition costs, build costs, professional fees, and potential taxes and charges.
To help you plan and budget your project, I’ve set out the main factors that affect build costs, provided tips to manage costs, and given a real-world example for reference.
A new-build house in East Dunbartonshire by McGinlay Bell Architects. Photo by Jack Hobhouse.
This guide provides general cost information on building a new house. Note that building projects are complex, with many factors influencing the final price. Therefore, online guidance should only be used as your starting point before engaging a professional.
As we move into 2025, the average cost to build a house in the UK ranges from £1,750 to £3,200 per square metre, with higher-end projects – such as those involving complex designs or basements – exceeding £4,000 per square metre.
Here's a breakdown based on the number of bedrooms:
These figures serve as a rough guide at the very start of the project. To estimate the actual costs of your project, you’ll need a comprehensive set of plans for builders to price.
With a skilled architect and careful planning, it's possible to build very economically. House Lessans by McGonigle McGrath cost just £335,000, equivalent to £1,425 per square metre.
When budgeting for your house build, you’ll need to factor in expenses beyond basic construction costs for a comprehensive and realistic project budget.
Financial and Legal Expenses
Statutory Costs & Taxes
Protections
Site Preparation
Try to maintain a flexible approach and build in financial contingencies. Construction projects regularly encounter unexpected challenges, and having a robust financial strategy will help you navigate these effectively.
The construction of new build homes is generally exempt from VAT, although VAT is applicable to professional fees and other expenses. Other taxes and charges your project may incur include:
An urban infill house in London by 31/44 Architects. Photo by Anna Stathaki.
To build a new house, you’ll need the following professionals:
Budget around 15% of the build costs to have an architect on board throughout the project and to engage other consultants as needed.
You can save on fees by reducing the architect's scope or not appointing a QS; however, this will mean taking on the work yourself or placing additional responsibilities on the builder.
READ:
Do I Need an Architect?
Architect vs Structural Engineer: What’s the Difference & Which Do I Need?
There are controllable and uncontrollable factors that affect building costs.
Uncontrollable Factors
You should carry out due diligence on these factors before agreeing on a price for the land. Once you take ownership, they cannot be changed, so you will need a strategy to address them effectively.
Controllable Factors
Careful planning during the design stages is essential to mitigate cost risks associated with these items before agreeing a price with a builder and starting work on site.
New-build homes in the UK are now subject to stricter building regulations, particularly regarding thermal performance and heating systems.
In some cases, local planning policies require new homes to exceed building regulation standards. For example, all new homes in London must achieve super high levels of insulation, incorporate sustainable heating systems – typically air source heat pumps – and include on-site renewable energy sources, such as solar panels, to meet local requirements.
These enhanced standards significantly affect construction costs, often driving them towards £3,000 per square metre.
Homes designed to meet Passivhaus standards, which set the most rigorous energy performance benchmarks, can exceed £3,000 per square metre.
However, government grants, such as the BUS grant for heat pumps and biomass boilers, are available to help offset some of these costs.
READ:
How to Insulate Your House
Retrofitting Heat Pumps into Houses (much of this content is applicable to new homes)
Godwit House in Northumberland by Mawson Kerr Architects was built to Passivhaus standards.
Consider this development I designed in south-west London, which consisted of:
Although the two smaller houses were technically refurbishments due to extensive demolition works, they fell into the new-build category and were VAT exempt.
All three homes were highly insulated and built to a good-quality specification. The end house featured a higher interior specification and was fitted with a Mechanical Ventilation Heat Recovery (MVHR) system.
The two four-bedroom houses cost approximately £365,000 each (£2,500 per square metre).
The end house, complete with basement, cost around £620,000 (£3,100 per square metre).
Three new houses in south west London by architect, Aron Coates.
To keep your project on budget and avoid overspending, here are some key tips:
When it comes to financing your self-build project, the most common approach is to take out a specialist self-build mortgage. These typically work on a stage payment basis, where the lender releases funds at key milestones during the build.
Lenders typically require an NHBC warranty, or similar, along with an architect's certificate, as part of their criteria for approval.
The Build Store is an excellent resource for information on home build finance, as well as finding building plots and other self-build project resources.
A new house on a former garage site in Cambridgeshire designed by Mole Architects. Photo by Matthew Smith.
How much does it cost to build a house?
The cost of building a house can vary significantly depending on location, design, and specifications. In most parts of the UK, you might expect to pay around £2,500 per square metre for an architect-designed home. However, for high-end finishes or projects including basements, costs can easily escalate to £4,000 or more per square metre.
Do you pay VAT on a new build house?
No. The construction costs of a new build house are generally exempt from VAT. However, VAT will still apply to consultants' fees and other related expenses.
Can I save money by managing the build myself?
While self-managing a build can potentially save money, it requires significant time, expertise, and careful planning. If you have the skills and time to dedicate to the project, self-building could lead to cost savings. Otherwise, hiring an architect and a main contractor to oversee the project can be worth the additional cost.
How do I finance a self-build house?
Self-build houses are usually financed with specialised self-build mortgages, which release funds in stages as your project progresses. These mortgages typically require an architect’s certificate and may need a warranty like NHBC.
About the Author
Aron Coates is an architect with over two decades of experience, working on projects ranging from historic building restoration to contemporary home design.