Hanley Economic Building Society chief executive David Webster described self-build as “future and current prime property” and a way for lenders to establish relationships with attractive customers.
The self-build lender CEO said: “The intermediary role is pivotal – it still is in the market generally. That will probably manifest itself in due course in the self-build market. It would be nice to think that would bring a degree of professionalism along as well.”
Speaking at the Self Build Lending Workshop at the National Self Build & Renovation Centre, Webster highlighted self-build’s potential as a niche area mutuals could occupy and an opportunity to attract more experienced, wealthier homeowners to establish a relationship of trust.
“The experience they go through in the 12 months building their own home creates enough emotion for them to appreciate who has helped them,” he said.
Jubilee Managing Agency senior class underwriter and deputy head of personal lines David Swan said over two-fifths of the self-build business his firm had supported was under 70% loan-to-cost.
Two-thirds of self-build projects cost under £300,000 and 90% cost under £500,000, Jubilee statistics showed.
Once completed, a building financed with a 70-75% loan-to-cost mortgage had a 61.6% loan-to-value. Even a 90-95% loan-to-cost self-build mortgage had a ratio of 74.4% loan-to-value.
