The pilot will aim to remove the barriers of access to land and finance that often prevent individuals in achieving their desired home.
Sustainable developer Zero C will lead the project based at Park Prewett, which is part of a new housing development in Basingstoke. The site will also include 44 plots for affordable housing along with space reserved for entirely self-build homes.
Homes can be customised to buyers’ specifications with various levels of custom build available.
Housing minister Brandon Lewis said: “This government is committed to increasing housing supply and helping more people achieve their aspiration of home ownership – whether that’s buying on the open market through schemes like Help to Buy, or to build.
“We want to see custom and self build grow significantly and believe it can play a role as part of a wider package of measures to help deliver the homes people want.”
The announcement follows the Chancellor’s pledge to set aside £8bn to build more than 400,000 affordable homes as announced in his Autumn Statement and Spending Review.
The government also plans to plug £350m in additional funding to the custom-build sector, while offering a £1bn flexible fund to builders, replacing both the Builder’s Finance Fund and Custom Build Service Plots.