Laker 
According to research from the National Customer & Self Build Association, 1 in 3 adults are interested in building their own homes. In response to this research, the Government is launching a Help to Build scheme that will offer an equity loan to those who want to build their own home. This could be a fantastic way for homeowners to upgrade, or for first time buyers and those on lower incomes to get onto the property ladder, even if they have a small deposit.The Help to Build scheme will utilise a £150 million fund from the government that allows for low-deposit mortgages through equity loans on self and custom build homes — similar to the Help to Buy and is set to run until at least 2024. Whilst not all details have been released yet, it is thought that the scheme will be run in a similar fashion as the Help to Buy scheme and managed by Homes England once launched.
What are the basic requirements?
To qualify you need to have the right to live in England and will be only living in the newly built home, once completed. In addition, you will need to secure a self-build mortgage from a lender registered with the Help to Build scheme.
What are some of the benefits?
The Help to Build is an ideal option for those who want something different from their homes, such as energy efficiency and smart technology. You get to create a home that suits yours and your family’s lifestyle needs with little to no compromise. You may be able to live in an area you wouldn’t have otherwise been able to afford as you can size and scale your home to suit your budget. You can select a smaller plot of land and join those who are living smaller and more efficiently.
What is Help to Build?
The idea is that the Help to Build scheme will offer an equity loan based on the estimated costs to buy a plot of land and build the home. The equity loan amount can be between 5% to 20% and up to 40% in London, of the total estimated cost of the project and is thought to be interest free for five years as per the Help to Buy scheme. If you’re eligible, you can spend up to £600,000 on your new home. This must include the cost of the land if you don’t already own it, and no more than £400,000 on the cost to build it.
How will it work?
According to Jack Woodfield, News Editor for Homebuilding & Renovating magazine in their ‘Help to Build Prospectus Published’ article, the Help to Build scheme requires you “…to have a self-build mortgage to help pay for land and set-up costs, and your lender will release funds to you at various stages of the build.” He goes on to say that you’ll get your equity loan following and start to pay the fees once you’ve your home has been completed. Key takeaways about this loan:
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- Once offered an equity loan, you’ll have 3 years to purchase the land and build your home
- You must use a registered lender for the mortgage, and you will be required to have outline planning permission before a mortgage will be approved
- On completion of the build the government will pay your mortgage lender the equity loan amount offered and the self-build mortgage will switch to a repayment mortgage automatically
- The loan term will be 25 years and you only need to pay back the loan at the end, you can, however, repay the equity loan earlier if you want to
- You will need to repay the loan earlier if you sell it or repay the mortgage
- As the value in your home increases or decreases, so will the repayment amount, so it if increases by 5% you will have to repay an additional 5% on your equity loan
What next? There are many elements to keep in mind if you choose to self-build, including the Help to Build loan will not protect you from overspend, so ensure that all elements are planned for and have contingency. With lots of resources that share ideas to save on budget when it comes to interiors and design, remember that you can also save money and time when it comes to procuring the building materials for your home-build by working with a local independent builders merchant.
 | Once you have your plans, Laker Builders Merchant can provide you with an accurate Estimation of your building materials, this will give you transparency of the materials, labour and plant required for your build, down to the last nail. We can even work with you to procure the materials you need and as an independent if we’re working with you on your build, we’re offering further discounts and phased deliveries. So, if you’re in Sussex, Surrey, South London, Hamps or Kent, we can support your dream build and save you money, give us a call on 0800 684 8702 to talk through how we can help you turn your dream into a reality. Join us on Twitter and Facebook to keep up with Laker news. |
