26 June 2014
Communities Secretary Eric Pickles has today unveiled more details of how the £150m fund to help supply thousands serviced building plots will operate. Details of the initiative were first mentioned in the Chancellor’s Budget speech earlier this year.
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The fund aims to bring forward up to 10,000 serviced building plots for self and custom build housing. The Government will not be providing grants (just low/modest interest rate loans); so the finance it is offering will primarily help those land owners who don’t have the cash themselves (and can’t get finance from a bank).
The fund will be operated by the Homes and Communities Agency, in a similar way to the existing Custom Build Investment Fund. So it will be available to developers and community groups, either working individually or as part of a joint venture with individual custom builders or a local authority.
Housing associations will also be able to apply for the loans.
The finance can be used to ‘service’ land so that it is ‘oven ready’ for self builders to then acquire and organise their new homes. This means the money can be employed to cover the cost of roads, drainage and other services/utilities. If land isn’t serviced it is often difficult to market to would-be self builders. Typically it costs £10-15,000 per home to take a big site and split it up into serviced plots.
After lobbying from the industry the Government has reduced the lower threshold for the scale of projects that can apply. Initially the Government wanted the loans to only be available for land suitable for ten or more self/custom build homes. Today’s announcement from the Government shows that the threshold will be five or more homes.
The news has been welcomed by self build and small builder organisations who are keen to create more opportunities for people to build their own homes.
Land owners, developers, small builders, community groups and housing associations need to submit their bids to the HCA by 30 September 2014.
The first large-scale pilot project will be undertaken on a section of the Park Prewett development at Basingstoke. An areas known as Trumpet Junction will accommodate up to 120 serviced plots and the HCA is currently lining up a team of consultants to deliver it, with the first plots expected to be available early next year.
The prospectus is available here https://www.gov.uk/government/publications/custom-build-serviced-plots-loan-fund
