How Much Does it Cost to Build a Prefab House

Commod prefab manufacturer production
Image courtesy of: COMMOD HOUSE

Most manufacturers openly display the cost of their prefab models, a value that in Europe and the UK hovers at around 90,000€. However, most advertised numbers are the so-called base price and are usually only a starting price. This price can be established beforehand because it refers to the off-site works of a predesigned model, though the final cost includes additional construction stages. It is essential to identify these non-displayed costs since, in most cases, these can double or even triple the base price [1].

What is included in the Prefab house base price?

The base price usually includes all the necessary materials and labour required to complete the off-site construction of the house as defined by the manufacturer. Manufacturers can establish a base price beforehand because their predesigned models are prefabricated. Being prefabricated guarantees a controlled environment with none of the unexpected situations common in traditional construction.

These are the most common features included in the base price.

  • Structure of the house
  • Any necessary layers such as insulation or waterproof barriers.
  • Plumbing, wiring, and fixtures
  • Heating and/or cooling systems
  • Interior finishes (walls, floors, ceilings)
  • Exterior finishes (siding, roofing)
  • Doors and windows

What’s included in the base price might vary enormously from one company to another. For example, prefab companies like Klein, Commod House, or Ruum Tiny Houses adhere to the previous inclusive list. Other companies, such as Woodville or Tiny Home Romania, allow their customers to decide what is included by default. Offering different starting prices to either purchase an empty home, a furnished house, or even a ready-to-move-in house.

How to estimate the real final cost of a Prefab construction?

To know how much our prefab house will really cost, we can’t simplify the value to a cost per square metre. Instead, we need to analyse every stage of the prefab construction since their cost depends on several variables that can’t be overestimated. Still, prefab construction has a great advantage while calculating the cost: the certainty of the final value.

How Much Does it Cost to Build a Prefab House
Image courtesy of: COMMOD HOUSE – model mohma Standard

All those construction stages that take place off-site rarely experience cost modifications once the price is defined. Therefore, the common out-of-quote costs that traditional construction experience are quite reduced while building a prefab.

1. Buying the land (if necessary) and acquiring advice

Unless you acquire a prefab on wheels, you need a piece of land to install the house. If you don’t own a piece of land, you need to include the cost of a newly acquired land into your budget. The cost of the property will vary enormously depending on its location, size, and topography. However, the selection of the plot shouldn’t be solely based on its cost since the characteristics of the land can directly affect the final construction price.

For example, flat and easily accessible properties are often more expensive to purchase, but opting for a cheaper plot without these characteristics will end up being much more expensive. Prefabs are built mainly off-site, and their delivery and assembly require very specific characteristics. To ensure the cost of the land is well invested, it is recommended to seek advice from the manufacturer beforehand. In most cases, this advice has an additional cost that should be added to the budget.

2. Design and house manufacturing

The most obvious and easy-to-identify cost is the manufacturing of the house. This is the first value we come across while scrolling through the prefab home catalogue. As previously explained, this value is tight to each manufacturer’s specifications, though they are often open for modification. Therefore, while we are usually aware of the base price from the beginning, it isn’t until the design phase is completed that we know for sure the manufacturing cost.

The design stage is the first step we go through, even with predesigned models. In this stage, the customer is encouraged to carefully analyse the house design, materials, and inclusive elements with the intention to ensure these fulfil their expectations. Most manufacturers offer a good selection of customisations, upgrades, and add-ons to the basic design. These often have an additional cost and will increase the initial base price. The more you personalise a house, the higher the manufacturing cost will be.

3. Land preparation

Before the prefab components can be delivered to the plot, the land has to be adequately prepared. This preparation is, in most cases, done by a separate building company that prepares the area according to the prefab manufacturer’s specifications. The most noticeable work in this stage is the construction of the foundations, the cost of which fluctuates depending on the type of foundation and the ground characteristics.

Still, land preparation isn’t complete until the property is connected to the basic services and utilities such as electricity, water, sewage, gas, and telecommunications. It is likely that the plot is already serviced, though if it is not, the total price will rapidly increase since it costs about 6,000€ to 35,000€ in Europe and the UK [2].

4. Transportation and assembly of the house

Once the off-site works are completed, the prefabricated parts are delivered to the property to be assembled. A third party usually handles the logistics of shipment and assembly. However, it is common for the prefab manufacturer to manage these services and include this cost in the quote defined at the closing of the design stage. The cost depends on the distance, the access characteristics, the type of vehicles utilised, and the time required to assemble and finish the house on-site.

5. Building permits and taxes

In the U.K. and most European countries, prefabs, like any other permanent home, require a building permit. The cost and requirements of the building permit can highly vary from place to place. For example, in the U.K, the building permit is defined by a set value. Depending on the characteristics of the construction and can be anywhere from £334[3]. Taxes also vary enormously from one country to another, though the first tax that should be considered all around is the VAT.

Generally, the advertised base price of a house doesn’t include VAT. The amount of VAT varies from country to country: in Spain, for example, the VAT to purchase a house is 10%, but in the Czech Republic, the VAT is 15% [4]. Though other taxes might apply, in France, you are expected to pay a tax to connect the services to the property [5]. To get a clear idea of the taxes and legalisation costs affecting your location, ask your prefab manufacturer and get a consultation with the planning authorities of your area.

Frequently Asked Questions

Do prefab homes need planning permission?

Most prefab homes built in Europe and the UK must obtain planning permission before construction. However, the type of permits and cost vary from one country to another.

Will I need to connect the water and sewage to my home, or will this be done for me?

The service connection is usually done for you by the prefab manufacturer or the contractor in charge of the on-site works.

References
[1]Collinson, P. (2018, November 30) ‘UK housebuilding revolution’: £65,000 prefab homes go into production The Guardian https://www.theguardian.com/society/2018/nov/30/uk-housebuilding-revolution-65000-prefab-homes-go-into-production
[2]How to deliver serviced plots Right to Build https://righttobuildtoolkit.org.uk/briefing-notes/how-to-deliver-serviced-plots/#
[3]Department for Levelling Up, Housing and Communities and Ministry of Housing, Communities & Local Government (2021, August 20) Fees for planning application GOV.UK https://www.gov.uk/guidance/fees-for-planning-applications
[4]JUDr. Mojmír Ježek, Ph.D. Tax framework for real estate acquisition in the Czech Republic ECOVIS JEŽEK, ADVOKÁTNÍ KANCELÁŘ S.R.O. https://www.ecovislegal.cz/en/other-legal-areas/tax-framework-for-real-estate-acquisition-in-the-czech-republic/
[5]Planning Taxes in France – Taxes d’Urbanisme French-property https://www.french-property.com/guides/france/building/planning/planning-taxes

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