The Bigger Issue


Last month housing minister Grant Shapps an for the self build sector. But is there any substan


Each month Mortgage Introducer takes a look at the bigger issues. This m Self-build is an increasingly important source of new housing stock and it can contribute to the regeneration of, or help to create, diverse communities with a range of properties. In recent times self-build properties have tended to have better green credentials and be more energy efficient than the existing housing stock. It can therefore help Government to meet its carbon reduction targets and assist owners in reducing their energy bills.


Housing Minister Grant Shapps wants to focus attention on self- build so that it is more accessible to people who want to build by increasing the availability of mortgages. Yet it’s not that there is not a shortage of self-build mortgages, it is their structure and a risk averse attitude by lenders which makes them less accessible. Take the Halifax; an excellent mainstream lender, but their


Self-build can also be a way for first-time buyers and those who might not be able to get on the housing ladder in the ‘traditional’ way to own their first home. For those who cannot afford the house of their dreams, building it themselves can be a more cost effective way of getting the home they want in the location they desire. Broadly then, self-build is a good thing, so what’s stopping everyone from doing it? Self-build has long been seen as the stuff of TV programmes and the preserve of the wealthy, many people see the process as too complicated and bureaucratic. Enter Housing Minister Grant Shapps with his plan to


simplify matters. Well, perhaps ‘plan’ is slightly overstating the Government’s work on this issue to date, but I genuinely look forward to seeing more detailed proposals on how they will go about removing hurdles and making self-build more accessible. Regulation, lack of finance, the thought of complicated discussions with architects and a bureaucratic planning system has certainly deterred numerous would be self-builders in the past and so the removal of red tape is a positive step forward for consumers, industry and government alike. Many building societies are already active, providing mortgages in this area, playing their part in helping aspirant self-builders to realise their dreams. It is true though, that much of the lending market has been unwilling or unable to lend on what is often viewed as a risky area. So to conclude I think the scheme could have legs and I am certainly keen to engage with government and industry to design a process which cannot only stand on its own two feet but can begin to move forward steadily.


Paul Broadhead, head of


mortgage policy, BSA


self-build mortgage is only for those with the deepest pockets. A self-build client has to have already built to the footings before the Halifax will part with the cash. In the South East, where a building plot will easily cost £150,000, this means forking out the best part of £200,000 before getting any mortgage funding. Such stringency is the norm amongst lenders. The result is a


market for the well heeled middle aged baby-boomer and few else. Yet the mortgage element is only part of a much wider issue. Mr Shapps said recently that self-build “aspirations are being thwarted by barriers and red tape”, which hints that he also recognises that other factors need to be addressed. I think that less bureaucratic intervention in self-build planning


is necessary and a more positive attitude to architectural individuality encouraged. Even more radical ideas might be considered, such as making it easier to divide a single deed into multiple ownership. But finance, planning and legislation are truly small beer when it comes to the fundamental issue facing the self-build market. Here is the crunch: constructible land in the UK is in acutely


short supply and an enormous price ticket follows automatically. Any coordinated strategy should free up land for self-build construction, including backfill, reclaimed land and even green belt. I believe this would be more acceptable on the landscape than many mass build aberrations of the last couple of decades and would inject more creative individuality into the housing stock.Mortgage reform in isolation will not reshape self-build in the UK. There also needs to be more constructible land made available, an easing of planning restriction, less prescriptive control and legislative reform to come anywhere near the flexibility in self-build construction presently enjoyed by our European neighbours. Bring it on Shapps!


Martin Tapper, director, Tapper Financial Services


Our experts have had their say, now it’s your turn to have yours. Visit www.mortgageintroducer.com and vote for the expert you think makes most 20 mortGaGe introducer FEBRUARY 2011


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