Turning your self-build dreams into a reality

When you hear self-build, the first thing that may spring to mind is Grand Designs and the lavish and eccentric properties you see built on your screens. The reality is that most self-build properties are more conventional and built by people striving for a property that meets their needs whilst not breaking the bank. By working with a recognised small or large developer, it’s even possible to enjoy the benefits that come with a custom-build without taking on the project management burden yourself.

So how can you finance your own build? There are a number of options available, but the most traditional would be a self-build mortgage where the lender will give an initial sum of money towards the purchase of the land (outline planning permission is required) or to raise money on land you already own. Further funds are released in pre-agreed stages throughout the build, meaning that you need a clear map of your cash flow from the outset to ensure that you have the right level of funding at the right time. Surprisingly, there are even high street lenders that can offer self-build mortgages, although, as with more specialist lenders, the interest rates are typically higher than a standard residential mortgage.

Launched in 2022, there is also the government’s Help to Build scheme which can run alongside a self-build mortgage. Much like the former Help to Buy scheme, this government backed scheme allows a reduced initial deposit by providing a 5 year 0% interest loan of up to 20% of the land and build costs.

With the number of planning applications for self-build having declined since 2021, could now be the time to seize the moment and make your property-building dreams a reality?

Further information:

https://www.gov.uk/government/publications/help-to-build-making-building-your-own-home-more-affordable/help-to-build-equity-loan-customer-guide-accessible-version#who-provides-the-equity-loan