Borrowers, under the scheme, will only need a 5% deposit
The UK government has announced the launch of its Help to Build scheme, which aims to support thousands of families in building their own home.
Under the scheme, the maximum land and build costs can be up to £600,000 and borrowers will need just a 5% deposit. The other 95% is via a Help to Build Mortgage, which can only be provided by lenders approved by Homes England, which runs the scheme.
“Through the Help to Build scheme, we will help thousands more people on to the property ladder by giving them the opportunity to build homes that are perfectly tailored to their needs and in the communities they want to live in,” Housing Minister Stuart Andrew said.
Help to Build follows other government schemes, including Help to Buy and Right to Buy, which have helped more than 765,000 people buy their own homes. The new scheme is also part of the government’s plan to boost the UK’s underdeveloped self- and custom-build sector, which will create jobs, increase the number of new homes, and help grow the economy.
“This innovative scheme will build on our work to break down the barriers to homeownership, as well as creating new jobs, supporting the construction industry and kickstarting a self- and custom-build revolution,” Andrew said.
Help to Build will open for applications on Monday, June 27, making self- and custom-designed homes an option for those who don’t have sizable budgets.
BuildLoan, in partnership with Darlington Building Society and Homes England, has launched the first ever Help to Build Mortgage.
The two products in this mortgage range are both three-year discounted rates at either 5.39% or 5.99%.
BuildLoan explained that during the build, borrowers pay on an interest-only basis, so monthly payments are lower. Once the build is complete, the Help to Build Mortgage switches to a standard repayment mortgage which must be in place for the duration of the equity loan.
Raymond Connor, chief executive at BuildLoan, said they waited a long time “to see this scheme come to fruition.”
“It will create a whole swathe of new build housing opportunities. People can build, or have built for them to their specification, the types of home they want to live in,” Connor added.
Andrew Craddock, chief executive at Darlington Building Society, was also delighted that the building society was the first lender to offer mortgages under the government’s Help to Build scheme.
“Self-build isn’t the preserve of the wealthy, and Help to Build makes it more practical and accessible than ever before for people to build their dream home. This scheme also opens up the opportunities to first-time buyers. It is a fantastic example of the market moving with the times, and people’s changing wants and needs,” Craddock said.
“This is an exciting time to be a self- and custom-build lender, and we are thrilled to be the first to launch our Help to Build Mortgage with BuildLoan.”
