Can't find a dream home? Then create your own... ; The self-build property market is booming, says David Prosser

House prices keep on climbing, and more people than ever arefinding themselves priced out of the type of property they reallywant to buy.

This soaring cost is the chief factor behind a boom in the self-build property market, analysts claim. More than 20,000 people builttheir own home last year, in a market that is now estimated to beworth up to [pound]7bn a year. John Hay, of Buildstore, a companyset up specifically to target self-builders, says: "We reckon theaverage person building their own home ends up with a property worth25 to 35 per cent more than its cost." Put another way, buildingyour own home gives you access to a property that would cost up to athird more than you could afford on the open market.

And building your own home does not necessarily require a crashcourse in construction, plumbing and electrics. "Very few self-builders do much of the work themselves," Hay adds. "The most valuethat self-builders bring to the project is in their management timeand skills."

But don't make the mistake of thinking self-build will be easy.Terence Blacker, the novelist, who built his own home in Norfolkfour years ago (see story, right), says it's important to berealistic. "Everyone underestimates the difficulties of self-building and empha-sises the glamour - the idea that this is a greatway of making money is quite wrong," Blacker says.

The best self-build projects are those that have beenmeticulously planned. Even before you've identified a plot of landon which to build, it's worth talking to lenders about how much youmight be able to borrow. You can also take early soundings fromarchitects and builders.

The next stage is to start looking for land. Talk to land agents,scan classified advertising and search the internet - or use word ofmouth. If this doesn't work, Buildstore maintains a service calledPlotsearch, which has details of land available all over the country- search for a fee of [pound]35.

Don't assume that you need an empty piece of land and bear inmind that you will pay more for land with outline planningpermission for a home already granted.

Once you've identified your target plot, you can hold moresubstantive talks with builders and architects about costings. Youwill need budgeting information in order to apply for a mortgage.Since most plots go to auction, the majority of buyers need a firmmortgage offer in place to buy the land.

Two types of mortgage appeal to self-builders. "The traditionalway of financing this is with a mortgage where the funds arereleased at each stage of the process," says David Hollingworth, ofindependent adviser London &Country.

With this sort of loan, pioneered in particular by Norwich &Peterborough Building Society, you ask for the full amount needed tofinance the project. If successful, the money will be released inslices. Typically, the money is paid in arrears, so you need to havecapital in place to pay builders and others until you get each sliceof cash.

The alternative is the accelerator mortgage, promoted byBuildstore. With these loans, the cash for each stage is availablein ad-vance. Bear in mind that you'll still have to make repaymentson the new mortgage, as well as servicing any borrowing you have onyour existing property.

With your finances in place - and the land secured - the easy bitof a self-build project is over. Getting the property built is thenext challenge. Norwich & Peterborough publishes an excellent guideto self-build and there is also help available in magazines, fromsales fairs and from specialists such as Buildstore.

Managing the planning and building processes are separate steps,but the more work you can do yourself, the lower your costs will be.Get as many quotes as possible and remember that you can claim backVAT on all materials used in the build.

Ben and Merry Albright, from Pembridge in Herefordshire, builttheir first home in their early 20s. Two years ago, Ben, a salesmanager, and Merry, a full-time mum, sold the property and beganbuilding another house nearby. The home was featured on Channel 4'sGrand Designs and won the 2006 Eco-Build Award.

"Seven years ago, we were looking to buy our first home andwanted to stay close to my childhood home, but everything was out ofour price range," says Merry, now 30. "We found a plot in the nextvillage where the developer had had planning problems and we boughtit cheap."

In all, their first home cost around [pound]130,000, which theyraised with a self-build mortgage from Norwich & Peterborough, andtwo years ago they were able to sell the house for [pound]300,000.All of that money went on building their new home, a four-bedroomproperty in the same village, which has been valued at[pound]400,000.