Having been formally announced in April, the Help to Build Equity Loan Scheme has launched.

In a bid to boost the self-build and custom build sector and bring more opportunities for people to create their own home, the scheme has been allocated £150 million over the next four years.  With as little as 5% deposit, the scheme will allow eligible applicants to undertake a self-build or custom build house with the intention of living in it.  Homes England will provide an equity loan of 20% (up to 40% in London), with the remaining balance being sourced through a self-build or custom build mortgage.

There are some limitations to the scheme.  Total project costs cannot exceed £600,000, including land purchase and total build costs cannot exceed £400,000, excluding pre-build costs such as architects fees, planning, engineer’s reports etc…which must be funded separately.

The Government has produced the Help to Build Prospectus which details all aspects of the scheme and also includes a link for people who wish to find out more.

Key Notes for Eligibility – you can apply for a Help to Build if…

  • You are 18 years old or more and have a right to live in the UK
  • Your intention is to live full-time in the home that you build
  • You can secure a self-build mortgage from a lender registered with the Government Help to Build scheme.

Most lenders will need you to have outline planning permission for the land you want to build on before they assess or approve your self-build mortgage. Ask your preferred lender about this before you apply.

The Government hopes that the scheme will result in 30,000 to 40,000 new homes being built a year in the UK.

Andrew Baddeley-Chappell, CEO of the National Custom and Self Build Association (NaCSBA) said of the announcement: “There has been a long-recognised need for greater diversity in our new homes market. The launch of the Help to Build prospectus is another important milestone for custom and self-build homes.

Homebuilding finance specialists, BuildLoan has worked closely with Homes England to help get the scheme launched, offering their experience and expertise in the sector.

Raymond Connor, CEO of BuildLoan, commented: “We have been waiting for Help to Build for a long time and, now that it’s here, we expect it to be extremely popular.

“The fact that people only need to find a 5% deposit by using this scheme, instead of typically 20-25% without it, is an extremely attractive proposition.

“Brokers should familiarise themselves with the Help to Build Equity Loan Scheme, as I can guarantee there will be lots of interest from people wanting to build their own home.

“No one knows the self and custom build sector better than BuildLoan. It’s not just about the mortgage, there are so many other considerations, and we can easily work with brokers to assist them in offering the best advice for their clients.”

“BuildLoan will be working with our lender partners to develop products to support the Help to Build Equity Loan Scheme and make sure we are ready to lend as soon as we get the green light.”

Compariqo can provide a variety of insurance and property finance solutions to Self-Builders. We welcome you to contact us!