A Surge in Self Build….

by Mark Johnston

A Surge in Self Build….

House buyers can spend a lifetime searching for their dream home. So it now seems that Self build homes are becoming a popular choice for people looking to get on the property ladder.

According to the National Self Build Association, there are 6 million people in the UK who want to build their own home and 1 million have already started the planning process.

money house In 2012 to 2013 almost 11,000 new homes were self built, in an industry worth up to £4 billion for the UK economy.

Therefore self build is an important element of the government’s housing strategy.

The government has recently announced a series of measures to ensure the self build market is opened up to those on lower incomes. These measures include; providing new grant funding for community self builders, working with councils to increase land for self build plots and also removing unfair taxes from self builders.

Communities Minister Don Foster said: “For many people the concept of building your own home means one thing: a fantasy mansion built by people with deep pockets and endless spare time. We are determined to end this misconception so anyone with aspirations to build their own home has the opportunity to do so.”

BuildStore Financial Services chief executive Raymond Connor said: “We know there is a lot of pent up demand for people wanting to build their own homes, so these measures will help to meet that demand.”

According to Kevin McCloud, TV presenter and founder of sustainable property developer Hab Housing, ‘The government sees self-build as a solution to the housing crisis. Self-build is greener and empowers people more. It can create communities and makes houses a reflection of their owners.’

This said Self build is still a niche market for lenders and many have exited in recent years citing a lack of demand.

Traditionally, lenders have been reluctant to give self-builders a mortgage before the house is built and valued.

However, the number of mortgage lenders willing to consider self-build in England and Wales has increased from roughly 12 in 2011 to 26 lenders today and gross self-build lending is predicted to increase by almost half between 2012 and 2015 to £1.9 billion a year.

Recent research has revealed that more than 90 per cent of self build lenders are building societies who include  Norwich & Peterborough, Saffron Building Society, BM Solutions, Leeds Building Society, or specialist Buildstore.

Self-build specialist BuildStore has reported a 26 per cent rise in mortgage applications year on year.

Building Societies Association (BSA) head of mortgage policy Paul Broadhead says that “the concept of custom build homes has boosted the sector’s appeal”.

The fact is Self-build mortgages work differently to residential products. Most lender will want to see detailed plans for the property, a projection of costs and planning permission details.

Then once the lender is happy with the information they receive the lender then release funds in stages rather than in a lumps sum as this protects a lender from throwing good money after bad if a project goes wrong.

Story link - A Surge in Self Build….

Related stories to : A Surge in Self Build….