Government announce plans for new Help To Build Scheme
Many of us long to build our own homes, but financing a custom build, or self build, isn’t always easy. Thanks to the new government Help to Build scheme though, which launched this week, those dreams could become a reality.
What is the Help to Build scheme?
It’s a government funded equity loan scheme aimed at aspiring self-builders who only have a small deposit and, as such, tend to struggle with the high costs associated with building your own home.
Typically you can buy a standard home with a 10% deposit. With a self build the average deposit requirement is much higher, normally around 25%, making it impossible for many first time buyers. Help to Build aims to open up this market for people who don’t have large amounts of cash available upfront.
Is it available now?
Yes, there’s £150 million currently in the Help to Build pot and applications are open as of this week, from June 26th, through Homes England. The fund is planned to last for four years, but may close earlier if demand is very high.
How much can you borrow?
Help to Build applicants can borrow from 5-20% of the total estimated cost of the build, or up to 40% in London. There are caps on how much the build can cost in total – £600,000 if you are buying the land as well or £400,000 if you already own the land.
Who is eligible for Help to Build?
To be eligible to apply for the new Help to Build equity loan you need to meet a few basic criteria:
- You must be over 18 years of age
- You must have a right to live in England
- The home you’re building must be your only residence once it’s finished
- You must have outline planning permission
- You must get a self build mortgage through a provider registered for the Help to Build scheme
You will not be able to apply to Help to Build if you’ve applied once already in the previous two years or you already owe money on another government home ownership scheme.
How to apply
Before you can apply you’ll need to have a self build mortgage in place through a registered provider. If you’re not sure of which lender to go to, this is a good point to get some expert advice. Your mortgage will still count if it’s arranged via a broker.
You’ll then need to make your application through Homes England. They’ll carry out their own eligibility and affordability checks and if your application is successful you’ll have three years to buy your land, if you need to, and build your home.