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Call for barriers to self build in UK to be lowered

In January Grant Shapps, the Minister for Housing and Local Government asked the self build industry to look at what needed to be done to help more ordinary people build their own home.
As part of his plan to increase the number of homes built in this country he told them that he wanted to start a self build revolution and an action plan to promote the growth of self build housing was subsequently published in July.

Now a survey amongst 2,000 UK consumers carried out on behalf of the Building Societies Association shows that if the barriers were lowered a remarkably large proportion of the UK population would consider building their own home either directly or using the services of architects and contractors.
The survey found that over half, 53%, of people in the UK would consider building their own home in the UK if they had the opportunity.  The majority were attracted by the ability to have control over the design and layout of their home, 53%, and the ability to build more cheaply than buying on the open market, 43%.
The research shows that self build is a particularly popular concept in Wales at 63%, Northern Ireland 62% and the East of England at 59%, and least popular in London and the Midlands.

Some 40% thought it would be too expensive, 39% were concerned about difficulty in getting planning permission and 38% worried about the availability of suitable land. These were closely followed by 34% not knowing where to start, 33% having concerns over expertise to do the job and 30% mentioning the potential difficulty of getting a mortgage.
Self build was most popular amongst families with three or more children of which 75% said that they would consider building their own home.
‘Ten years ago it was almost impossible to get a self build mortgage, but times have changed and mutual lenders are leading the way. Today there are more than 20 building societies that either offer a specific self build mortgage or will consider financing a self build project. So for people who want to take a dream and make it a reality I'd recommend talking to their local building society,’ said Colette Best, BSA Mortgage Policy Adviser.

Kevin McCloud, presenter of television programme Grand Designs is a champion of self build projects. ‘Times are hard and the looming difficulties of finance, land and the loneliness of the long distance self builder put most people off. Helping people over the hurdles will need a concerted effort by local authority planning departments, developers, housing associations and mortgage companies. But the signs are there that we could see a lot more assisted self build and community self build in the UK,’ he said.

The BSA recommends that people plan before approaching lenders. It says they should research house prices in the area and know as much as you can about their proposed build then shop around for a lender that meets the needs of the self build project.

It says to avoid funding a build on unsecured lending or credit cards as this is very expensive. 
It also recommends finding a building plot before applying for a mortgage as this allows the lender to see the site, assess its value and make an estimate of the loan to value ratio before making a mortgage offer.

Also set a budget for the total build including the cost of the land, how much you expect to spend at each stage, and the cost of warrantees, labour and a contingency fund for unexpected costs.

Most self build mortgages will pay out in around five or six stages. At the end of each stage the lender will send round a valuer to assess the worth of the property prior to releasing the next tranche of funds.

As a ball park figure you could expect in total to get a mortgage of up to 65% of the value of the land and 75% of the value of the completed property. Some lenders will go slightly higher.

It also suggests setting a realistic schedule for the build that you, your family and contractors are happy with and consider employing a project manager as whilst they cost money they can help you keep on time and to budget.

As the build progresses make sure that you obtain warrantees for the work as it is done.  This will help reassure the lender of the long term viability of the build.