Knocking down and starting again
Over 53% of UK adults would like to self build or commission an individually designed custom build home at some stage in their lives.
In order to tell if a plot has the potential for redevelopment, you need to make sure you will get your money back. You need to be really cold hearted and think purely of the finances at this stage. Do lots of research to understand all the financial implications and budget for worst case scenarios. Try to calculate what you think the end value would be and then work backwards. A good rule of them is to work in thirds: a third for the plot, a third for the build and a third for profit. You can expect to pay upwards of £1300 per square metre for a rebuild therefore pick your site wisely.
You will then have to negotiate with your local planning authority to get your plans approved which also tie in with your ideas for the new build. If you are knocking down an existing property you don't need to worry too much about getting utility services but make sure you have done your research re conservation areas etc as this could severely restrict what you can actually build. Also, be patient. This part can take years and it's up to you to decide whether it's worth the aggrevation.
Demolition needs to take pace only after securing permission for the replacement. This is a straightforward process and can cost around £12,000 for a single property. Complications can arise if you have asbestos on site so make sure you have factored in any potential additional costs.
To qualify for zero rated VAT you have to ensure the entire building, including the foundations are replaced. If you require a mortgage, this will be secured against the value of the building you want to demolish so you may need to go to a specific lender rather than a high street bank. Again, research is key here.
The more you can do for yourself, the cheaper the build will be however if you don't have the confidence or the knowledge then hire in the professionals. A project manager will definitely reduce the stress especially if you work full time and should bring your project in on time and to budget.
Look for houses where you can add value by increasing the quality and scale of the building. Bungalows are often ripe for this sort of development as they are not particularly attractive to look at, often detached and can have huge gardens.