Following discussion with the BSA and the industry, Shapps has written to the country’s biggest mortgage lenders to call on them to increase the availability of specialist products for people wanting to build their own home.
He said he wants to see self-built homes become far more commonplace, helping to generate the supply of affordable and sustainable homes.
Shapps highlighted that self builders already provide more homes than any individual housebuilder in the UK.
However, self build in Britain remains a much smaller sector than in other European countries, giving lenders the opportunity to tap into an undeveloped sector, Shapps said.
Shapps said: “There is scope to significantly increase the number of self-built homes in the UK, both for individual households and for community-driven projects.
“I want to create a self-build revolution where building your own home is not just the preserve of the privileged few. As the mortgage market continues its recovery, lenders have ideal opportunity to diversify lending into areas such as this. With expert knowledge from established intermediaries, lenders can make a profit at low risk.
“I think there are real business opportunities for lenders here, as the market grows, and I call on them to help make this important housing sector more mainstream.”
Shapps said that lenders should not avoid self build because of a higher perceived exposure to risk and encouraged the more widespread use of indemnity insurance and build out cover.
He added that the government would support the growth of the sector through its work to reduce the burden of regulation and lack of access to land.
Raymond Connor, chief executive of BuildStore Financial Services, said: “Compared to the wider housing market, demand for self-build finance is continuing to grow, so we would like to see more lenders respond to the self build market, and offer more practical products in order to serve the sector appropriately.
“The self-build market offers high quality lending and presents a great opportunity to provide funding in a growing market, currently worth £2bn annually.”
