There’s something caveman-like about wanting to build your own home. Perhaps it’s the desire to provide shelter for our families or to make a mark on the landscape which will still be there when we’re gone. Perhaps it’s just the desire to wield power tools with intent. But either way, there’s something fundamentally appealing about wanting to build our own homes which is enough to keep us tuning in to TV programmes about those who have chosen to undertake the more ambitious (and sometimes disastrous) projects.
Those of us who are hooked on self-build TV programmes will know that many borrowers perceive that they will face difficulties in getting a mortgage on a self-build property. This generally takes the form of the ambitious young couple looking glum while telling the viewers that they have been denied mortgage after mortgage before letting slip that their budget includes high end finishes in every room and hasn’t been fully thought through.
However, it is true that lenders view self build with a certain amount of caution, simply because of the nature of lending on a property which doesn’t yet exist, often to borrowers who don’t have any experience of the construction industry.
In recent years, building societies have led the way in offering lending for self build projects. Many building societies started life as a way of lending out money to help people build their home, so it’s a good fit with the modern mutual model.
In order to help those lenders who are put off by the idea of lending on a property being built by its future residents, the BSA has produced a self build toolkit. The toolkit contains statistics on what the self-build market actually looks like, how it might look in the future and information on how to mitigate the risks associated with self build mortgages. I hope that the publication of more information about self build will shed some light on the potential for the self build market to grow and encourage more lenders to get involved with this type of lending.
The self build toolkit can be downloaded here
