The scheme is still at the planning stage, with lender prospectuses out in May and the money expected to be available in the Autumn, but specialist lender Buildloan said this is likely to be a game-changer for the market.
Raymond Connor (pictured), chief executive of BuildLoan, said: “We are extremely supportive of the Help to Build scheme and have been advocating this for a long time. It is similar in nature to the Help to Buy Equity Loan scheme and will be a real boost to the self and growing custom build market.”
The demand for self and custom build can be evidenced by the 55,000 people signed up to local authority Right to Build registers, he said.
“Volume house builders dominate the new build market but this scheme will open up opportunities for SME property developers to expand the custom build sector,” added Connor.
“In anticipation of this announcement, BuildLoan has been developing products to support the Help to Build scheme and we are working with lenders ready and willing to lend.”
Along similar lines to Help to Buy, the borrower pays a five per cent deposit, the Government provides a loan of 20 per cent and the other 75 per cent of the build cost will be through a self build mortgage.
The scheme is likely to be administered through Homes England and available for a commissioned property, made to order home, or a new design from scratch.
Self and custom build could deliver 30-40,000 new homes a year, said the government.
Housing Secretary Rt Hon Robert Jenrick MP said: “Building your own home shouldn’t be the preserve of a small number of people, but a mainstream, realistic and affordable option for people across the country.”
The Prime Minister has commissioned MP Richard Bacon to lead a review on how to scale up the delivery of self and custom build homes. The review will report its findings and recommendations in the summer.
Andrew Baddeley-Chappell, CEO, National Custom and Self Build Association, said: “The Help to Build scheme is an important step towards greater customer choice for those with ambition, sound plans and smaller deposits.”
The self and custom build action plan has also been published today, which sets out government measures to support the sector.
This includes the next steps in the review of the right to build legislation, to assess whether further reforms are needed and confirmation of further funding for the right to build task force which will help local authorities, community groups and other organisations help deliver self and custom build housing projects across the UK.
