21 January 2015
A new scheme that will enable more people to build or customise their own homes, while also helping local authorities with land to develop, has been launched.
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The ‘Custom and Self Build Scheme’ (CSB), developed by Capita Asset Services and Lloyds Banking Group with support from Countrywide, is designed to de-risk the process of obtaining mortgages for self build and custom build properties by allowing local authorities with land to develop to both attract buyers and retain control over developments until completed.
Based on the existing local authority mortgage scheme, which has already been successfully used by 100 local authorities, the blueprint will also help local authorities meet the government’s Right to Build agenda.
Cecilie Booth, director at Capita Asset Services, said: “The Custom and Self Build Scheme tackles a number of issues head on. For those wishing to build their own homes, access to mortgages has always been a challenge because lenders, not unreasonably, insist on staged payments. For local authorities, either those leading developments or with land to develop, this scheme reduces risk and guarantees that buyers will have agreed finance in place. Importantly it will help to tackle the need for new homes – according to government estimates, up to 100,000 custom build and self build homes could be created over the next decade.”
Under CSB, individuals wishing to self build or custom build a home in one of the as-yet unspecified participating local authority areas will apply for a mortgage and, once agreed, the deposit, for as little as 5% will be paid direct to the local authority. The local authority will fund the cost of the build to completion at which point, the mortgage will be provided by the lender, covering the build costs, which will be fully repaid to the local authority. Once the house has been built, homeowners will simply have a mortgage on a custom or self build property.
Stephen Noakes, Mortgage Director at Lloyds Banking Group, the first lender to take part in the scheme, said: “Lloyds Banking Group is committed to helping Britain prosper and we are extremely pleased to be able to support this new scheme to help people build an affordable home, in their local area, to their own specifications.
“Improving the supply of housing across the country is crucial for maintaining a sustainable market, and this scheme will increase the options available for those looking for a new house.”
Eamonn Colman, Affordable Solutions Director for Countrywide plc, the UK’s largest property services and estate agency group, commented: “Our national ability to provide land for redevelopment, as well to supply mortgage, conveyancing and surveying services to assist home buyers is an important part in helping more people to achieve their dream of building a new home. Exploring innovations such as the Custom and Self Build Scheme that sustainably help to increase supply into the market are crucial in order to help meet current levels of demand.”
