Announced by Housing Secretary Robert Jenrick over the weekend, a major action plan, including over £150 million funding to help more people build their own homes, has been launched by the government.
The Plan, which comprises new initiatives, marks a further step in the Government’s ongoing backing of the self-build and custom housebuilding sector in England:
A new “Help to Build” low deposit mortgage scheme supported by over £150 million, funding for local authorities to develop public land for custom and self-build housing, a review into how delivery of custom and self-build housing can be increased and accelerated, a law review to enable more people to access plots in their local areas, and further support for the National Right to Build Task Force.
Each of the initiatives targets an area of challenge which to date has constrained the growth of the sector and are expected to improve people’s chances of accessing a custom home.
A new “Help to Build” mortgage will be launched to enable people to custom build a new home with only a 5% mortgage deposit. The scheme which is akin to the hugely successful “Help to Buy” product will also feature a Government-backed equity loan. Help to Build is expected to have a fundamental effect on the sector as it will open it up to a segment of the market which has been most affected by rising house prices and under supply of affordable new homes namely, young professionals, first time buyers and those on lower incomes.
This will be transformative for the custom and self-build sector, as it gives access to the market for those who are constrained by a smaller deposit while demonstrating the confidence that Government has that the scheme will deliver more and better homes.
Andrew Baddeley-Chappell, CEO of the National Custom and Self Build Association (NaCSBA) warmly welcomed the launch of the scheme: “The Action Plan represents the single most important announcement for the custom and self-build sector since the establishment of NaCSBA over 10 years ago. For too long England has been out of line with the rest of the world with regards to the lack of consumer choice in our new homes market. The consequences of this have become all too clear, as has the need for change. This Action Plan will ensure an environment exists in England that delivers more and better homes.
“Our focus now is ensuring that the public sees this as a natural approach to getting a new home that meets their aspirations and needs. As a sector, we need to do more to build the business capacity and structures that underpin the choice that exists elsewhere. Finally, we need councils to do their bit to ensure the plots that are needed are permissioned, so that these homes can be built.”
Mario Wolf, Custom Build Homes’ Director of Planning & Strategic Engagement, said: “The Government’s Action Plan marks a significant milestone in the level of support which the Government is offering to anyone who wants to build or commission their own home.
“The Plan shows that the Government is serious about truly diversifying our housing market. By offering low-cost mortgages akin to Help to Buy, targeted funding for public sector land and commissioning the preparation of a report into the scaling up of self-build and custom build housing we can expect demand and supply for this form of housing to rise to new heights in the very near future. At Custom Build Homes we are ready to play our part.”
Raymond Connor, CEO of BuildLoan, comments: “We are extremely supportive of the Help to Build scheme and have been advocating this for a long time. It is similar in nature to the Help to Buy Equity Loan scheme and will be a real boost to the self and growing custom build market.
“This scheme opens up self build to more people as they only need a 5% deposit instead of typically 20%. We know there is pent up demand for people wanting to build their own home as evidenced by 55,000 people signed up to local authority Right to Build registers.
“Volume housebuilders dominate the new build market but this scheme will open up opportunities for SME property developers to expand the custom build sector. This announcement demonstrates the Government’s commitment to the diversification of housing in the UK by supporting self and custom build.
“In anticipation of this announcement, BuildLoan has been developing products to support the Help to Build scheme and we are working with lenders ready and willing to lend.”
Source: Property Reporter