New Government Funding for Self Build Projects

by Mark Johnston

Research shows that the UK has the lowest level of self build homes of any developed nation.

The National Self Build Association has stated that the barriers for self builders include:

–          availability of land

–          availability of finance

–          impact of regulation

However, in 2011 14,000 self build homes were completed, so it seems then that UK self builders are still responsible for more new homes than any single volume builder in the country.

Many experts say that self build is good for the economy and with data showing that over 100,000 people looking for self build plots across the country the self build industry is “riding the crest of a wave”.

With as many as 100,000 aspiring self builders looking for plots it seems the consumer demand is definitely there and the need for additional housing is very evident in today’s growing society.

The National Self Build Association estimated that 1 in 10 new homes in the UK were self built and the market generated £3 billion for the UK economy.

In light of this the housing minister Grant Shapps has recently announced that he will shortly be launching a £30 million fund to provide short term finance for self build projects.

The minister has also appointed Kevin McCloud, presenter of channel 4’s Grand Designs and an architecture specialist, to support the national surge of interest in self build.

The full details of the fund are likely to be announced mid May and it is expected to be aimed at sites where 5 or more self build homes can be built.

It is thought that people will be able to bid for a slice of the cash and the exact percentages that may be given are still not confirmed. To bid however self builders are thought to need at least an outline planning permission for their project.

The money will be able to be used for land purchase, infrastructure costs or build costs and then repaid on completion of the project.

The BuildStore Financial Services, the self build specialist, has welcomed the government’s £30 million fund and Raymond Connor, founder and chief executive, said “we wholeheartedly support Grant Shapps scheme”.

However, some experts feel that lenders will need to embrace the market with their support as only they can unlock the market.

Therefore Grant Shapps has also written to lenders to highlight the strong business case for supporting self builders and offering mortgages to those starting their own projects.

Many feel that this new fund could present an amazing business opportunity especially for lenders.

Paul Broadhead, head of mortgage policy at the Building Societies Association (BSA), said “many building societies began life by helping local people fund the building of their homes, so self build fits well with the mutual lending model”.

On top of all this the government has committed to maximise access for self builders to land being released as part of its land disposal programme.

So it therefore seems that the barriers to self build are steadily coming down.

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