Self and custom build mortgage finance
Multi-year funding for ‘Help to Build’ was announced at the 2020 Spending Review. In April the government confirmed an initial £150 million over 4 years to support the scheme to deliver low deposit mortgages and improve affordability of home ownership for self and custom builders similar to Help to Buy.
The housing market is dominated by a small number of volume builders and to reach the ambition of delivering 300,000 additional homes per year we must maximise delivery across new and existing sub-sectors, catalysing new tenures and giving consumers greater choice over housing products.
Self and custom build housing harnesses the power and initiative of individuals to instigate building projects giving them control over the look and feel of their home. Often utilising small sites of little interest to major builders, the sector brings forward housing projects delivered through SMEs and specialist builders, helping to build a more diverse and resilient housebuilding sector, and improving the design and quality of homes as they are built by the people who will live in them.
The self and custom build sector is under-developed in the UK. In Europe and North America, the sector delivers a much higher proportion of housing output. Only 7% of homes in UK are built via self and custom build, delivering an estimated 13,000 units in 2018. Nonetheless, even at this underdeveloped scale, this level of output is enough to make the sector the equivalent of UK’s fourth largest housebuilder. There is capacity to expand and if we increased to levels similar to the Netherlands, we could see 30-40,000 self and custom build homes built annually.
The government is committed to increasing the number of self and custom build homes in this country and to establish it as a mainstream option for people to choose to get on the housing ladder or when moving home. The government has previously brought forward initiatives to tackle the barriers to the growth of the sector, and now we are bringing these initiatives and new ones together under one self and custom build action plan.