I prefer custom, or used to. Lately I've become interested in templates, particularly with HTML5. I've just come across a Website with some fantastic designs, refer below:
Custom all the way it helps not looking like everyone else.
There are a variety of new Templates for web design so mostly use templates because designing a site is a long process and demands lot of time.But I prefer doing custom designing as you can make your site according to your own style.Also templates are being used by many designers nowadays so there is no uniqueness in using templates.
When I was a newbie in the business and web designing, I used templates too. But it was never a solution. Custom made designs are more reliable and visitors love to see something different.
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What I do is find a cool template then just do some revisions according to the need of my niche.