The UK Government has launched the Help to Build Scheme to kickstart a self-build “revolution”. The £150m Scheme is designed to make it easier for people to build their own homes. It comes as property prices increase in the UK and the end of the Help to Buy Scheme.
With 1 in 3 British adults interested in self building their own home, in this blog, we find out how the Scheme works, when you can apply and how the Government aims to help you.
What is the Help to Build Scheme?
The Help to Build Scheme allows self-builders to access mortgages with lower deposits and mortgage rates with the intention that the freed up capital can be used on building costs.
This method is an alternative option to get first-time buyers onto the housing ladder and could contribute to 30,000 – 40,000 self and custom-built homes a year to the UK housing stock.
How does the Scheme work?
The details haven’t fully been fleshed out yet but it’s believed that the Scheme would operate in a similar style to the Help to Buy Scheme. In delivering this Scheme, the UK Government has pledged to work closely with the National Custom & Self-Build Association (NaCSBA).
Taking on NaCSBA’s recommendations as a starting point, the Scheme will be based upon the estimated build cost and not the estimated property price. This means that the funding will be allocated towards the cost of the build for the property.
Under the NaCSBA proposal, self-builders under the Scheme would obtain a mortgage with a 5% deposit, with the mortgage lender providing 95% of the remaining funding. Once the property is physically complete, the Government’s funding would be paid to the lender (which is estimated to be around 20%). This will mean that on physical completion, the lender’s mortgage liability will reduce from 95% to 75%.
How can I apply for the Scheme, and how long does it run for?
Applications for the Scheme will open from late summer and the prospectus detailing information around the Scheme is expected to be published this Spring. The Government has pledged that the £150m funding is to be allocated across four years to support the Scheme.
What are the next steps of the Scheme and what should I be doing?
The government has released the self and custom build action plan which sets out an action plan for self-build custom homes:
- reviewing legislation on the Scheme and assess how it is applied in practice
- allocating funding for the Right to Build Task Force so it can continue to collaborate with local authorities to advise on delivery and policy
- establishing a plan to scale up self and custom build homes
- providing £2.1m funding for local authorities to bring plots of land they own and allow communities to have a greater say in how their local area is developed
Consequently, there are a number of changes that self-builders will encounter that makes the overall process of building your own home easier, irrespective of whether you are participating in the Help to Build Scheme or not.
To stay on top of the developments on the Scheme keep yourself informed of these important releases on the Ministry of Housing, Communities & Local Government website. Be sure to set pencil in the below time periods:
- Spring: Help to Build prospectus published – details more information on the Scheme.
- Summer: The ‘Right to Build’ legislation review concludes – aims to review existing building regulations/rules and conclude with changes in laws and regulations.
Late Summer: Help to Build applications open
For more information about building your own home, check NaCSBA’s Self Build Portal for inspiration and advice.