Backed by £150 million of government funding, the Help to Build will enable would-be builders to apply for an equity loan of between 5% and 20% of the total estimated land and build cost (up to 40% in London), interest free for 5 years. This will lower the required deposit and free up capital, making building a home an affordable and realistic option.
The Prospectus is an important staging point in the launch as, it sets out the parameters for people wishing to take up the equity loan scheme, including the terms and eligibility criteria. This will enable people to plan how, and when, they will use the scheme to help them fulfil their self and custom build aspirations.
You can use the Register Your Interest link (in the Prospectus) to find out more about the scheme, and be the first to hear when it’s open for bids – expected early in 2022.
Download the prospectus
The scheme will provide a huge boost for the self and custom build sector by providing a route to work for SME house builders, helping to level up communities across the country. Government believes that the scheme has the potential to deliver up to 40,000 new homes a year.
You can download a pdf of the prospectus here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1035681/Help_to_Build_Prospectus.pdf
About the fund
Lending is only through stakeholders registered with the scheme, and the self build mortgage used to build the house will convert to a standard mortgage on completion of the build. The prospectus sets out the framework for the loan, including the criteria for applying, for example:
- You must have a have a minimum 5% deposit;
- loans can be between 5-20% of the total estimated cost (40% in London);
- people can borrow up to £600,000 for the build and land, or up to £400,000 for build alone;
- the loan will attract interest, payable from year 6;
- the planned house must be your only home;
- you must have outline planning permission to apply; and
- payback amounts are calculated on the value of your home at the point of sale – so if the value rises so does the amount you owe on the loan.
Announced in April 2021, the £150 million scheme will help level the playing field for speculative housing, where the Help to Buy scheme has supported new build activity for years. Housing Minister Christopher Pincher MP said: “People across the country dream of building their own home and through our ground-breaking Help to Build scheme we are making it a realistic and affordable option.
“Help to Build will put them in charge of the house-building process and make sure they get the home they truly want. This scheme will also support small housebuilders and create thousands of local jobs – providing a huge boost to the self and custom build sector and delivering much-needed new homes.”
Andrew Baddeley-Chappell, CEO of the National Custom & Self Build Association (NaCSBA) said: “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. It sends a strong message to both customers and to enablers.
“It will mean that more people can have the new home they actually want including those with smaller deposits, sound plans and big hopes. The greater choice enabled by this scheme will lead to more affordable and better homes that are more wanted and more sustainable.
Harvey Fremlin, Managing Director of the NSBRC, said: “We very much welcome the launch of the Help to Build Prospectus. This scheme has the potential to make self-commissioned homes far more accessible for people interested in building better homes. Our visitors are keen to live in well designed, energy efficient, quality homes so it is great news that self-builders can now benefit from similar financial support to those buying homes from the larger developers”.
