A new scheme in England to make it easier for self-build homes to be created will open for applications from Monday, the Government has said.
The Help to Build scheme will enable people to overcome prohibitive mortgage costs to build a home that is tailored to their needs, with just a 5% deposit towards land and building costs, according to the Department for Levelling Up, Housing and Communities.
Backed by £150 million of Government funding, the scheme could help people with specific living requirements, creating homes that are tailored to their needs, including those with disabilities or those who live with large families or elderly relatives.
Many people have previously been priced out of this option because it can require huge sums up-front.
The scheme will allow applicants to borrow between 5% and 20% of their costs across England – and up to 40% in London. Total build costs cannot be over £600,000, or £400,000 if the land is already owned, and applicants must live in the property as a primary home.
Tim Bannister, Rightmove’s director of property science, suggested people aspiring to build their own home may face challenges finding appropriate land to build on and will need to take care not to blow their budget.
He said: “Being able to design your own home is certainly appealing, but the challenge will be finding the land to buy and build on and getting the necessary planning permissions and mortgage.
“There are currently just under 3,500 plots of land available to buy in England on Rightmove and that drops to around 1,000 plots if you budget a maximum of £100,000 for the land, with a number not suitable for building a home on.
“People will also need to be cautious when planning the project so that they don’t overspend on their allocated budget.
“Building your own home can be quite a daunting prospect for many people and they will need experts to help at every step of the way.
“Even a 5% deposit can be a hefty amount to raise, particularly for someone looking to buy on their own – a 5% deposit on a typical first-time buyer type home is 56% higher than it was 10 years ago.
“Those looking to take advantage of the scheme will still need to consider how much they are able to borrow from a lender, and whether it’s enough to build the home that they want or need.”
The Government said measures to boost the sector will include a specialist unit within Homes England to bring forward more self and custom-build plots on regeneration projects across the country.
The use of modular construction will also be promoted to boost custom homebuilding.
Housing Minister Stuart Andrew said: “Through the Help to Build scheme we will help thousands more people onto the property ladder by giving them the opportunity to build homes that are perfectly tailored to their needs and in the communities they want to live in.
“This innovative scheme will build on our work to break down the barriers to home ownership, as well as creating new jobs, supporting the construction industry and kick-starting a self and custom-build revolution.”
Andrew Craddock, chief executive of Darlington Building Society, which will offer mortgages under the scheme, said: “This scheme also opens up the opportunities to first-time buyers. It is a fantastic example of the market moving with the times, and people’s changing wants and needs.”
Andrew Baddeley-Chappell, CEO of the National Custom and Self Build Association (NaCSBA), said: “Greater customer choice should be available to all those seeking a home of their own – not just those with the deepest pockets.”