In April 2021, former Housing Secretary, Robert Jenrick, announced the Government’s plan to introduce a new Help to Build initiative that would make self-building a viable option for everyone. Self-building statistics in the UK are considerably lower than our European neighbours’, with only around 13,000 houses being self-built each year. By introducing the scheme, the Government predicts that self- and custom-builds will account for 30,000 to 40,000 new homes in the first year alone.
Allocated across four years, an initial £150m of funding will be available from the Government to get self-builders started. Working in a similar manner to the Help to Buy initiative, it will allow purchasers to secure a self-build plot with a 5% deposit, alongside the Government-backed equity loan. Due to the varying costs involved with self-build projects, the loan will be based on the estimated build cost as opposed to the property price. Unlike the Help to Buy process, where the funds are paid on legal completion, the self-build loan will instead be paid on practical completion. As there is no housebuilder involved, it will be paid directly to the mortgage lender.
The scheme will also extend to custom-build homes, which are ideal for buyers looking for a less hands-on approach. Still offering considerable flexibility, custom-build homes give purchasers the opportunity to tailor the internal layouts and finishes of a new-build property, by choosing from a menu of options. The earlier in the construction process that the plot is reserved, the more choice that buyers will have. Those using the scheme for a custom-build home will also have their loan paid on practical completion and directly to the mortgage lender.
As an additional bonus to the economy, the Government self-build scheme is also part of the wider Plan for Jobs, which will benefit smaller building firms. Increasing the number of self- and custom-build homes constructed each year will considerably boost the number of jobs available for SME builders. It is also likely to help the country in its bid to meet the net-zero-by-2050 goal, with research revealing that nearly a third of people said living in a house that was more sustainable was a key benefit of building a home. This may be done through the use of sustainable building materials, such as timber or recycled steel. Alternatively, it could mean installing eco-friendly systems such as double- or triple-glazed windows, mechanical ventilation systems or renewable energy infrastructure such as solar panels.
Introducing the new scheme is an important step towards giving house-hunters greater choice and freedom when it comes to finding a forever home. Without the option of a self-build loan, many people have been unable to take on the challenge of building a home in the past. However, with self-building becoming more affordable, the hope is that more people will feel able to purchase their own self-build plot. At Graven Hill, the UK’s largest self- and custom-build development, self-build plots have been hugely popular, demonstrating that there is a desire to self-build among the general population. People have simply not been given as much support as needed to explore this route until now. The Help to Build scheme will not only make self-building more affordable but also more accessible to the everyday person.
The pandemic has led to our requirements for the home evolving considerably. With many people no longer bound by the geographical location of their offices, due to remote working, there is more opportunity to go to greater lengths to find the perfect home.
Although self-building remains no easy task, there has never been a better time to consider taking on the challenge. Instead of settling for a doer-upper, buyers can have the opportunity to own something that they are proud of. Self-building creates communities filled with personality and will help provide the housing industry with the diversification it needs.
Prospective self-builders can now register their details and receive an email notification when applications for the equity loan are open.