Are you looking to fulfil your dream of a self build home?
Over a third of UK adults are currently considering building their own home at some point in the future but if the current status quo remains, the reality is that very few will actually go on to do so.
Whilst hard data on the UK’s self build market is quite difficult to come by, it is estimated that around a tenth of completions are as a result of self build, which puts us woefully behind our European counterparts. For example, in Austria, up to 80 per cent of new homes are as a result of self build projects.
We might expect that not all of the 30 per cent of wannabe self builders will progress the idea, but the gap between those who would like to and those that actually do is still concerningly large.
So why is there a gap and what is being done about it?
If you’ve ever watched an episode of Grand Designs, you’ll know just how stressful a house build can be and that seems to weigh heavily on the minds of potential self builders before they even contemplate construction: two fifths believe financing their build would be the most difficult aspect of the project.
Another challenging issue for self builders is finding the right contractors, with 20 per cent believing this would be the hardest part of the process.
However, as finding the right plot is the first part of any self build dream, and a fifth of people cite that finding that plot is a major concern, it’s hardly surprising that only a very few make it to the starting blocks.
Finding a Plot
All is not lost: the Right to Build legislation, which was spearheaded by NaCSBA (the National Custom and Self Build Association), was put in place four years ago with the aim of putting self build in the grasp of more people.
In fact, 30 October 2020 marks the first anniversary of Right to Build Day – the occasion when all English local authorities have to demonstrate that they have granted sufficient planning permission to meet the self build demand in their area.
The legislation is essentially in two parts – the first being an obligation on behalf of local authorities to keep a register of how many people are interested in building their own home in each area, and the second is a requirement to provide the equivalent number of ‘permissioned’ plots within a three-year time frame.
If for example, 300 people registered their interest in building their own home in Babergh, a district council in Suffolk, then that council would have to demonstrate that they have provided the equivalent number of permissioned plots within a three year period.
Of course, there are also numerous other online registers and lists of self build plots available but this was the first time that UK councils are being held to account on the matter.
Financing a Plot
Research has revealed that more than half (52 per cent) of people who are thinking about undertaking a self build project are unaware that they would need a self build mortgage and not a standard residential mortgage.
Self build mortgages can be a little more expensive than a standard residential mortgage as they are more complex for the lender, so if you’re thinking about going down this route, it’s vital to factor this into the budget.
Some people also don’t realise that self build mortgage lenders tend to release the money in stages as the build progresses. This has two benefits – it means the lender will check on the progress and standard of the build to ensure it is being completed to a sufficient standard to protect the finished value of the property, and secondly it means the self builder won’t have to pay interest on the whole amount from the start of the build – only as they require the funds.
It can be useful to seek the advice of a mortgage intermediary as self build mortgage applications can be complex and someone with experience in this area, and potentially already known to the lender, can make the process more efficient and less stress-inducing. Similarly they may also help source a lender who undertakes what’s known as ‘manual underwriting,’ which means you’ll get a human response to your application.
With a shortage of new homes in the UK, we need to be doing more to encourage wannabe self builders to take the plunge. If you hang on Kevin McCloud’s every word, perhaps you should start living the dream and sign up to a Right to Build Register?