With the reduction in new houses from developers, self build has become a mainstream way of getting a new home. While there is doom and gloom in the general mortgage and housing market, self builders and renovators are weathering the storm rather well - and there are many reasons for this:
• Protection against negative equity; the vast majority of self build homes are worth 25% to 35% more upon completion than the cost of the land and the build added together, meaning that self builders are well placed to be protected from negative equity.
• Most self builders pay little or no stamp duty; Stamp duty is only payable on the price of the land, not on the cost of the build or end value of the house, and the majority (over 60%) of plots on the PlotSearch database fall below the recently raised threshold of £175,000.
• More land, at cheaper prices; in line with the rest of the property market, the price of land has fallen. Plots are also more plentiful now than in recent years, as cash-strapped developers are selling off land from their own land banks due to the industry’s slowdown and self builders no longer face competition from developers paying premium prices for plots
In partnership with BuildStore, The Bath Building Society will lend up to 95% of the cost of the land or building to be developed, and 95% of building or renovation costs, providing the final loan to value (LTV) does not exceed 80%. In addition, to make the project run more smoothly, money is released during to project in advance of each stage of construction providing the homebuilder with much needed cashflow to buy materials and pay builders and tradesmen.
Raymond Connor, BuildStore’s chief executive said: “There has never been a better time to self build because as well as having the right type of funding available and land being more plentiful and better value, labour is also cheaper and easier to find, as many tradesmen are no longer employed by the large developers.”
