Loft conversion with large rooflight

Godwit House in Northumberland by Mawson Kerr Architects. Photo by Jill Tate.

How Much Does It Cost to Build a House in the UK in 2025?

As we move into 2025, new-build houses in the UK typically cost around £2,500 per square metre, but there’s much more to consider. Discover the full range of costs, key factors that affect costs, and expert tips to help you budget wisely and avoid overspending on your project.

Aron Coates, Architect, BA (Hons), BArch, ARB | Designs in Detail | 09 December 2024


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.

About this Guide

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.

Average Build Costs per Square Metre

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:

  • 2-bedroom house (80 sqm): £140,000 - £260,000
  • 3-bedroom house (110 sqm): £190,000 - £350,000
  • 4-bedroom house (150 sqm): £260,000 - £480,000
  • 5-bedroom house (200 sqm): £350,000 - £640,000

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.

Additional Costs to Consider

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

  • The cost of the land.
  • Fees and interest payments associated with securing a self-build mortgage.
  • Legal expenses, normally around 2% of land costs, which include solicitors' fees and surveys needed to secure the land.
  • Professional fees, typically around 15% of the project cost, to design, plan, and manage your project.

Statutory Costs & Taxes

  • Statutory consents, including planning permissions and building regulations approvals, ensuring your project meets all legal and safety standards.
  • Stamp Duty Land Tax (SDLT) and planning contributions, where applicable.

Protections

  • Contingency of at least 10% of build costs to manage unexpected challenges, complications, or additional expenses.
  • Insurance to cover potential construction risks, including public liability and contractor insurances.
  • Warranties protecting against potential building defects after completion.

Site Preparation

  • Site preparation, including demolitions, clearing the site, and installing utilities like water, electricity, and sewage connections.

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.

Tax and Charges

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:

  • Stamp Duty Land Tax (SDLT): SDLT is payable in England and Northern Ireland if you buy land over a certain price. In Scotland, you'll pay Land and Buildings Transaction Tax, and in Wales, Land Transaction Tax.
  • Community Infrastructure Levy (CIL): Many local authorities in England and Wales now charge a CIL on new build houses. However, self-builders are exempt if the property is your principal residence for a minimum of 3 years after work is complete.
  • Planning Contributions: These are financial payments set by the local authority to fund affordable housing (affordable housing contributions) or improve local infrastructure (Section 106 Agreements in England and Wales or Section 75 in Scotland). Affordable housing contributions generally apply to developments in London but are being adopted by other councils.
  • Capital Gains Tax (CGT): There is no CGT to pay if you make a profit from any subsequent sale, provided the house is your principal private residence.

An urban infill house in London by 31/44 Architects. Photo by Anna Stathaki.

Professional Services

To build a new house, you’ll need the following professionals:

  • Architect (or others) to design and manage the project, ensuring its compliant.
  • Structural Engineer to ensure the structural elements are safe and meet regulations.
  • Quantity Surveyor, if you require expert cost advise.
  • Heating Engineer, to design the heating and hot water system, especially if you’re installing a heat pump.
  • Mechanical Ventilation Specialist, if installing a Mechanical Ventilation with Heat Recovery system (MVHR).
  • Party Wall Surveyor, if building close to neighbouring boundaries or buildings.

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?

Factors Affecting Build Costs

There are controllable and uncontrollable factors that affect building costs.

Uncontrollable Factors

  • Location: Building costs vary widely across the UK; it’s notably more expensive to build in London and the south east than most other parts of the country.
  • Site Constraints: Features such as sloping sites or protected trees can add complexity and cost.
  • Planning Constraints: If building on designated land like a conservation area or an area of outstanding natural beauty, higher design quality is required, often resulting to higher fees and build costs.
  • Access: Restricted access can complicate logistics for builders, potentially increasing costs.

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

  • Design Complexity: Larger homes require more materials and labour; intricate designs may necessitate specialised skills that drive up costs.
  • Construction Method: Common construction methods like cavity wall systems tend to be more cost-effective than advanced techniques like mass timber systems such as cross laminated timber (CLT).
  • Structural Complexity: Buildings requiring extensive structural steelwork due to large spans or cantilevers will incur higher costs.
  • Glazing: Homes with large glazing areas will be more expensive than those with standard-sized openings.
  • Basements: Including a basement significantly increases complexity and cost.
  • Kitchens: High-end branded kitchens add substantial expense; opting for standard carcasses dressed in quality materials can save money without sacrificing design.
  • Bathrooms: Like kitchens, bathrooms add value but can be expensive to install. They also require detailed planning, which increases design fees.

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.

Low Energy Home Costs

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.

Example Project

Consider this development I designed in south-west London, which consisted of:

  • Two four-bedroom houses built over three floors, each totalling 145 square metres.
  • One four-bedroom end house built over four levels, including a basement, totalling 200 square metres.

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.

Tips to Manage Costs

To keep your project on budget and avoid overspending, here are some key tips:

  • Plan and Budget Thoroughly: Good planning is essential. Work with an experienced architect and quantity surveyor to get accurate cost estimates from builders and make smart choices throughout the project.
  • Get Detailed Plans and Specifications: Spending on professional plans and specifications will give you more accurate quotes from builders and help achieve the quality of design you want.
  • Manage Design Complexity: Simple designs often cost less but can still look great. Consider how your design choices will affect the overall cost.
  • Sign a Building Contract: A clear building contract defines everyone's role – client, architect, and builder – and helps keep the project on track and within budget.
  • Manage the Project Effectively: Good project management can save you money. While doing it yourself might seem cheaper, appointing a main contractor and an architect can help keep everything running smoothly and save time and money in the long term.

Financing Your Build

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.

FAQs

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.

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