THE MIDLANDS PROPERT Y GUIDE MONE YWATCH F INANCE
MONEYWATCH FINANCE
THE GOVERNMENT’S HELP TO BUILD SCHEME: MAKING CUSTOM AND SELF-BUILD HOMES MORE ACCESSIBLE
56
For many people, the idea of building their own home has long been seen as a luxury—complex, expensive, and out of reach for all but the wealthiest. However, the UK government’s Help to Build scheme is seeking to change that, offering financial support to those who want to design and construct their own homes rather than buy on the open market.
Alongside growing interest in custom build mortgages, this initiative is seeking to make self-build and custom-build homes a realistic option for a wider range of buyers—including families looking for more space, downsizers wanting a tailored property, and individuals interested in energy-efficient living.
HOW DOES THE HELP TO BUILD SCHEME WORK? The Help to Build scheme is an equity loan provided by the government to make self and custom-build homes more financially accessible. Similar to the former Help to Buy scheme, it allows borrowers to secure funding with a low deposit while using the government-backed loan to cover a portion of the costs.
KEY DETAILS OF THE SCHEME INCLUDE: • Borrowers can apply for an equity loan between 5% and 20% of the total estimated cost of land and construction (or up to 40% in London).
• The loan is interest-free for the first five years, after which interest is charged at 1.75%, rising annually with CPI plus 2%.
• The maximum eligible project cost is £600,000, including a cap of £400,000 on construction costs.
• A minimum deposit of 5% is required.
• Borrowers must secure a self-build mortgage to cover the remaining costs.
• The property must be used as the applicant’s primary residence and cannot be a second home or buy-to-let investment.
Once the home is built, the self-build mortgage is converted into a standard residential mortgage, and borrowers start repaying the equity loan.
WHY CUSTOM BUILD MORTGAGES ARE
GROWING IN POPULARITY One of the biggest hurdles for those interested in self-build projects is likely to be securing finance. Traditional mortgages are designed for ready-built homes, but custom build mortgages are tailored to those constructing their own property.
Unlike standard mortgages, these loans are released in stages rather than as a lump sum. Lenders typically release funds at
LIVE24-SEVEN.COM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116
