Currently, around ten lenders operate in the self-build sector. However, reports suggest five more are looking to enter self build in the next two months.
Speaking at the BuildStore conference in Swindon today, its financial services director, Rachel Pyne, said that lenders must embrace the opportunity self build presents.
She highlighted Datamonitor figures that suggest mortgage borrowing in the sector fell to around £1.6bn in 2010, but will rebound to around £3bn by 2014, rising beyond the peak 2007 levels of between £2bn to £2.4bn.
Pyne highlighted that almost 80% of self-build borrowers are over 40-years-old and on their third or fourth mortgage, making it a mature and low-risk market that behaves as well or better than prime.
She said: “Self build creates homes that families want to live in and mortgage lenders want to lend on; it is compatible with the government’s Localism agenda, and creates jobs in a difficult economic environment.
“Every lender has to make a profit and it is becoming more and more difficult with most mortgages being lent by the top five lenders. Self build provides high margin profits and a mature and low-risk market.”
