Taking on a self-build project has been something that many homeowners are unable to achieve due to mortgages and funding. However, the UK Government has just announced a new Help to Build scheme which will make self-builds a more realistic and more affordable option for thousands of homeowners.
Affordable housing is a massive part of Government planning and, with the success of the Help to Buy scheme, which allows first-time buyers to buy a new build home, those who wish to take on a custom build project will now find themselves with similar support at last. Before taking on a self-build project, it’s important to know more about how you can make the most of the scheme.
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Find out more about what the Help to Build scheme is and how it works
Learn more about the benefits of using the Help to Build scheme to complete your self-build project.
Find out more about what you should consider to get the most out of the Help to Build scheme.
What is the Help to Build scheme?
Although it can often be more affordable to build your own home than to buy an existing home, there are barriers to obtaining a suitable mortgage to do so. A typical self-build mortgage works by releasing funds at different building stages, regulated and assessed by surveyor inspections during the building process. A large deposit has always been required for this type of mortgage and that has prevented the vast population of potential self-builders from getting started.
The Help to Build scheme works in a similar way to the Help to Buy scheme, in which buyers are able to pay just a 5% deposit and an equity loan. By providing an equity loan, the scheme allows buyers to free up their capital for the build itself while opening up mortgage options with major lenders who offer the lowest rates.
Although you will initially enter this scheme with a 95% mortgage, the Government is potentially looking to pay 20% back to the lender on completion to reduce the mortgage to 75% and subsequently minimise the interest costs incurred. The scheme looks to address the government’s commitment to the housing shortage in the UK by making a self-build project more accessible and help fulfil the country’s housebuilding ambitions.
To find out more about the Help to Build scheme and how it works, please read our guide.
Why use the Help to Build scheme?
Build a house suited to your needs and design
By using the Help to Build scheme, not only will you end up with more house for your money, but you will also get to design it yourself. This means that any requirements you have can be factored in as you design and build the house. For those with disability or specific space requirements, this can be the perfect solution.
It makes a self-build project affordable
Previous barriers to taking on a custom build project have been addressed by the Government’s scheme, making it a feasible option for both first-time buyers and those looking to expand.
Over £150 million of funding has been injected and it already covers a 4 year plan, with talk of expansion in the future.
It helps provide jobs
Part of the plan is to open up job vacancies nationally, and these projects offer a huge boost in particular to SME builders. Upon the scheme's successful initial launch, expansion is likely and more jobs of this nature will arise.
Factors to consider to ensure you get the most out of the Help to Build scheme
Before applying for the Help to Build scheme and taking on your own self-build project, it’s important to consider a number of factors to make sure you get the most out of it.
Costs
This is one of the biggest factors to consider when taking on a self-build project, and it is worth considering how many separate costs you will need to calculate.
Although the Help to Build scheme helps to reduce the cost of your initial deposit, it will not have an impact on the cost of the actual work.
You will need to consider the following costs:
- Plot of land
- Planning permission
- Planning advice
- Architects
- Insurance
- Warranties
- Materials (including windows and doors)
- Labour
- Alternative accommodation
Some of these costs are dependent on your individual circumstances, such as whether you are planning to undertake the work yourself or hire contractors and incur the subsequent labour costs
If you plan on carrying out the work yourself and forego the cost of labourers, it is necessary to have sufficient experience in doing so, and your mortgage lender will require proof of this before lending. Unfortunately, this means that many of the costs involved are related to paying other people to officially design and build your home. However, this is a necessary and significant cost to consider when weighing up your options and is often still notably cheaper than buying a pre-build house to the same specifications.
It is also essential to consider where you will be living while the build is taking place, as alternative accommodation is a substantial cost to factor in. Many choose to live in temporary accommodation on site for this reason.
Location
Another factor to consider is the availability of a suitable plot of land, something which the government scheme also aims to address. Sometimes, there’s the option to build on your existing property site but, if you require a whole new plot of land, it is up to the local authority to authorise this.
This scheme aims to provide an additional £2.1million of funding to the Neighbourhood Planning budget, in which communities can decide where buildings are built and how they will look. The Right to Build legislation linked to this will see that local authorities have a duty to keep a record of the demand for serviced plots, and you should meet these demands within a 3-year window
Housebuilding data creates a picture of demand, and a legislation review has been incorporated into the scheme to aid with the barrier of limited plot availability. It is a factor to consider when deciding to self-build, and you should access your local authority’s plot plans before planning.
Planning permission
It is worth knowing that you may love the plans for your new home, but local authorities may not. Local authorities often reject planning permission for new builds due to local resident’s objections, which is a hurdle that could require further planning advice at cost.
To get the most from your plans and to reduce the chances of it being rejected, it may save you time and cost in the future to get advice and guidance before applying for planning permission.
Research and planning
When completing a self-build, to make sure you get the most from it, you should put a large amount of work into getting the design, budget and location right for your project, and this can take considerable time, effort and money.
Mortgage
Knowing more about the type of mortgage you need, how the Help to Build scheme works and the terms your chosen lender can offer will help you to get the most from the scheme. Researching and speaking to various lenders and advisors can make sure you get the best mortgage for your needs and your home.
Deposit required
Before you take on any mortgage, you must have the deposit you need. This takes forward planning and consideration into what you can afford compared to the amount necessary to secure the best offer. The Help to Build scheme only requires you to have a 5% deposit on the end value of the property.
Suppliers
Reliable and suitable quality suppliers and contractors will be required to make sure your custom build project follows your timeline and is completed on time and to budget. It’s important to factor in lead times when planning your self-build to make sure everything’s delivered on time and there are no delays with the build or installation.
At Origin, we never let our installation partners miss an install date and we have heavily invested to ensure that we have both the capacity and stock available to deliver on this promise. Working with suppliers who can deliver everything you need for your self-build will help to save on costs and time with fewer suppliers to organise. We can supply your chosen installer with all of the doors and windows for your property, instead of needing to source doors and windows from separate sources
We supply aluminium Bi-Fold Doors, Sliding Doors, French Doors, Front Doors and Single Doors to make sure your home is as secure and thermally efficient as possible. In addition, we supply a range of aluminium window types and styles, so we guarantee to have more than enough to suit your self-build project.
To find out more about Origin doors and windows for your self-build, please contact your local installer today.
