Mortgage News
Response: Is self build the answer to the housing crisis?
Housing minister Grant Shapps has pledged to tackle the complex bureaucracy and obstacles that surround self-build projects, such as lack of finance, to encourage more people to build their own homes. How realistic are the plans and what are the impediments?
Kim Rebecchi, sales and marketing director at Leeds Building Society
There is no doubt that building your own home can be a dream project for many and having input into the process can be very attractive. Finding the land, a bespoke design that includes all those personal touches and features, and managing the process from start to finish can be exciting and challenging.
It can also be very cost effective.
Clearly, any steps taken to make the process easier and enable more people to build and own their own home, something that I believe most people in the UK aspire to, is a positive move.
We know from our experience of the self-build mortgages that we offer that self-builders face many challenges.
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However, obtaining funding is not as difficult as many people believe. At Leeds Building Society, for example, funds are released in five stages.
It is often very difficult to predict and budget exactly for five stages and purchasing the land will usually be the biggest expense. Stage release allows borrowers to manage their outgoings and cash flow, only repaying the amount they have borrowed. They can access funds when they need them and this gives them flexibility within the project.
Self build can also have a positive effect on the local economy as local contractors are often employed to carry out large parts of the work. Specialists, such as architects and qualified surveyors are required and planning permission can take time, which should be factored into the process.
Self build definitely has a part to play in the UK housing market. Provided that the right support and advice is available to individuals, including guidance on ensuring a project is appropriate for the village or community, these proposals should be welcomed.
Also answering in this week’s Market Watch are:
Jaclyn Thorburn, of BuildStore Financial Services, a founding member of NaSBA