For those brave enough to take on the challenge, building your own home can be a financial winner.
By cutting out developers and throwing your energy at a building project, there is the prospect of getting a bigger or better home for your money.
Raymond Conner is managing director of Buildstore, which provides support, materials and finance for self-builders and runs the PlotSearch website.
He says: 'As a rule of thumb, one-third of the cost of a new home is the land, one third is the building and one third is the developer's profit.
'If you can squeeze both the land and development costs, you can stretch your money further.'
The average plot price has dipped by 28 per cent since 2008, according to PlotSearch. And more lenders are willing to give mortgages to DIY builders.
Chorley, Furness and Shepshed building societies have all started lending to self-builders this year, joining other mutuals such as Norwich & Peterborough, Hanley and Ipswich.
'If you can squeeze both the land and development costs, you can stretch your money further.'
The average plot price has dipped by 28 per cent since 2008, according to PlotSearch. And more lenders are willing to give mortgages to DIY builders.
Chorley, Furness and Shepshed building societies have all started lending to self-builders this year, joining other mutuals such as Norwich & Peterborough, Hanley and Ipswich.
About 15,000 self-build homes are constructed every year, a number that has been static through the recession and the housing slump.
Richard Barker, who oversees self-build loans at N&P, says: 'The availability of plots has increased, but the tough economic climate has made it very difficult for some borrowers.
'People like the idea of self-build, but then they look at all the work and the commitment that is involved and it does put a lot of them off.'
For some first-time buyers, such as Katie and Darran Macdonald, self-build brings a proper home within their budget. The couple originally started house-hunting in Oxfordshire where they were living at the time.
Katie, 33, a local authority personal assistant, says: 'Prices were astronomical and there was no way we could afford the kind of spacious home we wanted.' Darran, 31, is a carpenter with experience on construction projects and was keen to have a go at building his own place.
Then the couple spotted a building plot in the market town of Wem, Shropshire, close to Katie's family. She says: 'We really liked the plot that came with planning permission to build a three-bedroom bungalow.'
The couple started on site in June 2009 and the project has been a genuine self-build. Apart from using contractors to lay foundations, do internal plastering and some roofing, they have done all the work themselves at weekends and during time off.
Katie says that any project like this is an emotional journey.
'There is an amazing feeling when a bit of wood suddenly transforms into part of your home,' she says. 'But there have been some low points along the way when jobs seemed to take for ever.'
The couple are decorating and hope to move in for Christmas.
Financially, the project should be a winner. The whole construction has been funded by a specialist self-build mortgage with Birmingham Midshires through Buildstore.
These loans release the money in stages as work is completed (see below). The plot cost Katie and Darran £125,000, financed from a self-build loan of £240,000 and some savings. By doing the vast bulk of work themselves, the couple have managed to keep total costs on budget at just under £250,000.
When the house is complete, they should end up with something worth about £330,000 and so have about £80,000 in equity.
But profits from self-build are not guaranteed. DIY developers must research a project carefully, set realistic budgets and stick to them.
Any financial planning must go hand in hand with searching for the perfect plot and choosing what kind of home to build.
You must involve lenders before finalising any self-build. Barker says: 'We like to review the plans to make sure we are comfortable it is a realistic proposition. You need to have a site and design in mind before coming to talk to us.'
Lenders typically release the money for a self-build in five to seven stages, taking a project from foundations to the finished property. They may want to inspect each stage before signing off on the next slice of money.
This protects a lender from throwing good money after bad if a project goes wrong.
The inspections and extra administration make self-build loans more expensive than a conventional mortgage. Most builders will look to remortgage on to a cheaper deal once the house is complete.
For example, N&P charges 5.3 per cent variable on its self-build loan with a fee of £995. For a conventional N&P loan, the same fee buys a three-year discounted rate loan at 3.1 per cent.
Buildstore has a range of self-build loans with rates from 4.99 per cent to 5.99 per cent, depending on how payments are staged, the maximum loan size and the length you are locked into a deal.
Some serial self-builders make a living from creating homes. They build one, live in it for a while and then sell, using the profits to bankroll another new-build.
Barker says: 'There can be a 30 to 40 per cent gain on the sale.' Provided you have lived in the property as your main home, any sale profits should be tax-free.
Self-builders are able to reclaim VAT on the costs of most materials, provided they are building a new home. Similarly, builders and other professionals should not levy VAT on their services for a new-build.
The rules are complex. For example, you can reclaim VAT on wooden flooring or stone floor tiles, but not for carpet. Form VAT431NB, which can be downloaded from hmrc.gov.uk, contains more information. Read it before starting any work to ensure you keep the right records.
You will also need to arrange insurance for the site, both to cover liability against any accidents or injuries to workers or visitors and to guard against the theft of tools or materials.
Andy Reardon, of insurance broker Atkinson Smith in Doncaster which runs the selfbuildonline.co.uk insurance scheme, says: 'Thefts are quite common. Thieves are looking for building materials, copper, tools and anything else left on site. Quite often clients will build their garage first as a secure storage area.'
Insurance also covers the risk of damage to the part-constructed building itself. Storm damage is a common hazard and Reardon says there were several claims last winter where a part-built roof simply caved in under the weight of the heavy snow. Insurance would cost about £600 for a £200,000 project for a typical 18-month build.
Despite building on a tight budget, Tim Hambelton wanted the security of insurance to protect his investment. Tim, 32, converted and extended an old cow shed on the site of his family's bird seed business into a distinctive family home. He and his wife Cassie, 28, a lab technician, are expecting their first baby next month.
The whole project in Morley St Peter, Norfolk, was achieved on a budget of just £40,000. This meant Tim, who works for the seed business, had to think creatively. He scoured eBay for materials at discounted rates. When it came to digging the footings, he bought rather than hired a digger.
'We were quoted hundreds of pounds to hire a JCB and driver,' he says. 'So I bought an old one for £1,500, learnt how to use it and then, when we were done, sold it for £3,000. The profit on that paid for the kitchen.'
Self-build insurance, which cost just over £400 a year through N&P, was a big slice of his budget, but Tim says: 'We're pretty remote here and I couldn't afford to have someone coming in and stealing, say, the boiler or materials from site.'
With Tim doing most of the work himself, the build took three years from planning permission to moving in, including creating a big conservatory.
He says: 'I'll never move. We're set in seven acres here, so what better place to bring up a little one with fields all around us?'
Richard Barker, who oversees self-build loans at N&P, says: 'The availability of plots has increased, but the tough economic climate has made it very difficult for some borrowers.
'People like the idea of self-build, but then they look at all the work and the commitment that is involved and it does put a lot of them off.'
For some first-time buyers, such as Katie and Darran Macdonald, self-build brings a proper home within their budget. The couple originally started house-hunting in Oxfordshire where they were living at the time.
Katie, 33, a local authority personal assistant, says: 'Prices were astronomical and there was no way we could afford the kind of spacious home we wanted.' Darran, 31, is a carpenter with experience on construction projects and was keen to have a go at building his own place.
Then the couple spotted a building plot in the market town of Wem, Shropshire, close to Katie's family. She says: 'We really liked the plot that came with planning permission to build a three-bedroom bungalow.'
The couple started on site in June 2009 and the project has been a genuine self-build. Apart from using contractors to lay foundations, do internal plastering and some roofing, they have done all the work themselves at weekends and during time off.
Katie says that any project like this is an emotional journey.
'There is an amazing feeling when a bit of wood suddenly transforms into part of your home,' she says. 'But there have been some low points along the way when jobs seemed to take for ever.'
The couple are decorating and hope to move in for Christmas.
Financially, the project should be a winner. The whole construction has been funded by a specialist self-build mortgage with Birmingham Midshires through Buildstore.
These loans release the money in stages as work is completed (see below). The plot cost Katie and Darran £125,000, financed from a self-build loan of £240,000 and some savings. By doing the vast bulk of work themselves, the couple have managed to keep total costs on budget at just under £250,000.
When the house is complete, they should end up with something worth about £330,000 and so have about £80,000 in equity.
But profits from self-build are not guaranteed. DIY developers must research a project carefully, set realistic budgets and stick to them.
Any financial planning must go hand in hand with searching for the perfect plot and choosing what kind of home to build.
Mortgages
You must involve lenders before finalising any self-build. Barker says: 'We like to review the plans to make sure we are comfortable it is a realistic proposition. You need to have a site and design in mind before coming to talk to us.'
Lenders typically release the money for a self-build in five to seven stages, taking a project from foundations to the finished property. They may want to inspect each stage before signing off on the next slice of money.
This protects a lender from throwing good money after bad if a project goes wrong.
The inspections and extra administration make self-build loans more expensive than a conventional mortgage. Most builders will look to remortgage on to a cheaper deal once the house is complete.
For example, N&P charges 5.3 per cent variable on its self-build loan with a fee of £995. For a conventional N&P loan, the same fee buys a three-year discounted rate loan at 3.1 per cent.
Buildstore has a range of self-build loans with rates from 4.99 per cent to 5.99 per cent, depending on how payments are staged, the maximum loan size and the length you are locked into a deal.
Tax planning
Some serial self-builders make a living from creating homes. They build one, live in it for a while and then sell, using the profits to bankroll another new-build.
Barker says: 'There can be a 30 to 40 per cent gain on the sale.' Provided you have lived in the property as your main home, any sale profits should be tax-free.
Self-builders are able to reclaim VAT on the costs of most materials, provided they are building a new home. Similarly, builders and other professionals should not levy VAT on their services for a new-build.
The rules are complex. For example, you can reclaim VAT on wooden flooring or stone floor tiles, but not for carpet. Form VAT431NB, which can be downloaded from hmrc.gov.uk, contains more information. Read it before starting any work to ensure you keep the right records.
Insurance
You will also need to arrange insurance for the site, both to cover liability against any accidents or injuries to workers or visitors and to guard against the theft of tools or materials.
Andy Reardon, of insurance broker Atkinson Smith in Doncaster which runs the selfbuildonline.co.uk insurance scheme, says: 'Thefts are quite common. Thieves are looking for building materials, copper, tools and anything else left on site. Quite often clients will build their garage first as a secure storage area.'
Insurance also covers the risk of damage to the part-constructed building itself. Storm damage is a common hazard and Reardon says there were several claims last winter where a part-built roof simply caved in under the weight of the heavy snow. Insurance would cost about £600 for a £200,000 project for a typical 18-month build.
Despite building on a tight budget, Tim Hambelton wanted the security of insurance to protect his investment. Tim, 32, converted and extended an old cow shed on the site of his family's bird seed business into a distinctive family home. He and his wife Cassie, 28, a lab technician, are expecting their first baby next month.
The whole project in Morley St Peter, Norfolk, was achieved on a budget of just £40,000. This meant Tim, who works for the seed business, had to think creatively. He scoured eBay for materials at discounted rates. When it came to digging the footings, he bought rather than hired a digger.
'We were quoted hundreds of pounds to hire a JCB and driver,' he says. 'So I bought an old one for £1,500, learnt how to use it and then, when we were done, sold it for £3,000. The profit on that paid for the kitchen.'
Self-build insurance, which cost just over £400 a year through N&P, was a big slice of his budget, but Tim says: 'We're pretty remote here and I couldn't afford to have someone coming in and stealing, say, the boiler or materials from site.'
With Tim doing most of the work himself, the build took three years from planning permission to moving in, including creating a big conservatory.
He says: 'I'll never move. We're set in seven acres here, so what better place to bring up a little one with fields all around us?'
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