HELP TO BUILD - A New Scheme for UK for new buyers who want to build.
Updated: Apr 29
Help to Build is a new government scheme providing £150 million fund to make self build more accessible and affordable.
With plans for the Help to Build scheme now formally announced, we’re welcoming further details about this government directive aiming to kickstart the self build revolution.
First announced in a Spending Review in November 2020, Housing Secretary Robert Jenrick has revealed further information about what the Help to Build scheme will look like.
The government believes that with the Help to Build scheme in place, self and custom builds could contribute 30,000-40,000 new homes a year in the UK.
Here’s what we know about the Help to Buy scheme.
What is Help to Build?
The Help to Build scheme is a £150 million fund from the government allowing for low-deposit mortgages through equity loans on self and custom build homes — similar to the Help to Buy scheme.
Help to Buy is unsuitable for self builders because it requires the equity loan to be paid on legal completion to the developer. This approach means that the scheme cannot be readily used for custom and self build which typically have multiple payments to different parties.
The scheme aims to help people build or commission a house that meets their specific needs, with the likes of extra office space for home workers or design customisation for specific family requirements including caring for disabled or older people just a handful of ideas of those who could benefit specifically from self and custom building.
“The Help to Build scheme is an important step towards greater customer choice for those with ambition, sound plans and smaller deposits,” says Andrew Baddeley-Chappell, CEO, National Custom and Self Build Association (NaCSBA).
“Custom and self build is about the homeowner having control over the design and specification of their project — enabling them to create the home they want, rather than the one someone else believes they would like.”
How Does the Help to Build Scheme Work?
Specific details of Help to Build are still to be revealed, however the government has developed the scheme with Homes England using a model proposed by NaCSBA as a starting point, which we can use as an initial reference.
The key difference to Help to Buy, NaCSBA notes, is that the payment made on completion of a build goes to the mortgage lender in the absence of a house builder.
In NaCSBA’s proposal, self builders would secure a self build mortgage with a 5% deposit, with the mortgage lender providing 95% of funding for the project. On completion of the build, the government would provide 20% of the cost of the build to the lender, reducing the outstanding mortgage value to 75%.
It's worth noting that the value of a completed self build is usually more than the cost to build it, whereas when buying a new build property through Help to Buy, the property value is likely to fall.
Other self build schemes may also play into the eventual shape of Help to Build, including Self Build Wales.
How Long Will Help to Build Run?
The government has confirmed that £150 million will be allocated across four years to support the Help to Build scheme.
We expect further details of the scheme’s initial end date to be revealed shortly.
What Does Help to Build Mean for Self Builders?
MP Richard Bacon, an ambassador of the Right to Build Task Force, says the scheme could be transformational in increasing access to the self build market.
Mr Bacon told Homebuilding & Renovating: "I lobbied very hard to get something on Help to Build into the December 2019 Conservative manifesto. We can’t have discrimination against people who want to build their own home, so we need to extend the Help to Buy programme to include self builders."
He added that it "could open up a range of opportunities" and provide financial assistance to a generation of aspiring self builders.
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