The government has released more details about its Help to Build loan equity scheme for selfbuilders, with the release of its prospectus. It follows the announcement of the new initiative back in the summer.
The new £150m scheme will make funding for those wishing to build their own home more affordable, enabling building plots to be purchased with just a five per cent deposit. The government will top up deposits with a 20 per cent equity loan, interest free for five years, with the remaining 75 per cent cost of the build funded by a self-build mortgage.
The equity loan must be repaid at the end of the term (normally 25 years), when the house is sold, the mortgage paid off or any time before. The amount repayable at redemption is linked to the value of the home at the time, and not the amount originally borrowed.
The scheme is open to those that meet the eligibility criteria set by approved self-build lenders, not just first-time buyers.
National Custom and Self Build Association CEO Andrew Baddeley-Chappell said: “This scheme will lead to more affordable and better homes that are more wanted and more sustainable.”
Karen Curtin, MD at Graven Hill, the UK’s biggest custom and self-build development, based in Bicester, said: “Our European neighbours have promoted this option for many years, creating communities packed full of personality, and hopefully this is the start of the UK achieving the same. With self-building becoming more affordable, we hope that more people will feel able to purchase their own self-build plot.”
Applications for the scheme are expected to open this winter.
26 November, 2021