Today a survey among 2000 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.
While ten years ago finance for self-build was virtually impossible, today there are more than 20 building societies that either have specific self-build mortgages or will consider self-build projects.
Kevin McCloud, presenter of Channel 4’s Grand Designs programme, calls for a concerted effort by local authority planning departments, developers, housing associations and mortgage companies to help people over the self-build hurdles.
The survey found that:
* Over half (53%) of people in the UK would consider building their own home 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%);
* Self build is a particularly popular concept in Wales (63%), Northern Ireland (62%) and the East of England (59%) and least popular in London (47%) and the Midlands (48%);
* The potential for it to be too expensive (40%), difficulty in getting planning permission (39%) and the availability of suitable land (38%) were the top three barriers. These were closely followed by not knowing where to start (34%), concerns over expertise to do the job (33%) and the potential difficulty of getting a mortgage (30%);
* Self build was most popular among families with three or more children where three-quarters (75%) of those surveyed said that they would consider building their own home. Perhaps surprisingly the aspiration to build was not the preserve of the wealthier in society with an even spread of interest across all socio-economic groups (ABC1: 53% and C2DE: 54%).
Colette Best, BSA Mortgage Policy Adviser, said: "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."
Finance tips for aspiring self builders:
* Plan before you approach lenders. For example, research house prices in the area and know as much as you can about your proposed build;
* Shop around for a lender that meets the needs of your self build project – don’t try to fund your build on unsecured lending or credit cards as this is very expensive. It is mostly building societies that are active in the self build mortgage market: a number offer specific self build mortgages or will consider individual self build projects within their local area;
* Find your building plot before applying for a mortgage. 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;
* Set a budget for the total build. This will include how much you expect to pay for the land plus how much you intend to spend on the build. It should also include how you propose to fund it – ie) will you be selling your current home and if so at what point in the build?
* The budget should also include how much you expect to spend at each stage, include the cost of warranties, 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;
* Set a realistic schedule for your build that you, your family and contractors are happy with;
* Consider employing a project manager. While they cost money they can help you keep on time and to budget.;
* As the build progresses make sure that you obtain warranties for the work as it is done. This will help reassure the lender of the long-term viability of the build.
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