In June 2022 the Help to Build equity loan scheme was launched – backed by government to offer more people access to a custom or self build home.
The scheme is expected to help normalise the route, giving more people the chance to build, especially those with lower deposits.
The loan is based on the estimated costs of buying your plot and the cost of actually building the home. Government is prepared to lend between 5% to 20% of the total estimated cost of the project, which goes up to 40% in London to reflect higher land values.
The cost of the land and the build is capped at £600,000 or a maximum of £400,000 on the cost to build if you already own your land. There are conditions for eligibility, such as you have to be 18 or over, and have a right to live in England if to qualify.
You also have to be able to secure a self build mortgage from a lender registered with Help to Build, and this typically means you’ll need to have a plot in mind to secure this. But as it’s an equity loan, you have to pay the borrowing back (as with Help to Buy) and the amount you return is linked to the value of your home, and not what you borrowed initially.
NaCSBA has lobbied government successfully for Help to Build, to address the imbalance in the construction sector created by the Help to Buy scheme, which custom and self builders are unable to access.
Visit the Government’s Own Your Own Home website for full details.
The first tranche is available for four years – but more lending may be released if uptake is good.
Once you’ve accepted the offer for the Help to Build loan, you have three years to purchase land and build your home.
Yes – but not for the first five years. After this, from year six, you will pay interest – check what rate this is at the enquiry stage.
Help to Buy supported mainstream housebuilders bringing their products to market, but self builders weren’t eligible. Help to Build redresses this imbalance.
No, it is just an English scheme – there is not currently an equivalent for Northern Ireland, Scotland or Wales.
The actual loan is released once your house is completed – with a self build mortage financing this stage. On completion you will swap on to a regular mortgage, with government paying 20% of the equity as part of the loan. This effectively gives you a 5% deposit / 75% mortgage / 20% loan structure.
Ultimately yes – it is a self build scheme so can only be used on the house you intend to live in, and you can only have one property. You have 12 months to sell your original home from completion of the new one.
Help to Build can be used build a self build, custom build or complete a shell home.
Find and sign your local self build register – this is hosted by your local authority and is only available in England. This helps councils know how many people want to build locally – but won’t find you plot necessarily – the onus is still on you. Watch out for charges you don’t agree with – and use our template to complain if you’re not happy.
Research routes to a self or custom build, and find out more about the different elements you will need to discover and consider when building your own home. Find out all about custom build in our FAQs sector.
