Help to Build
The Help to Build Equity Loan Scheme is coming later this year. Similar to Help to Buy, it will allow more people to build or commision the build of their own living space, across any tenure, with as little as a 5% deposit.
Similar to Help to Buy, the borrower pays just a 5% deposit.
Full details of the Help to Build Equity Loan Scheme are still to be released but it is widely anticipated that the scheme will operate in the same way as Help to Buy.
The borrower pays a 5% deposit, the government provides a loan of 20% and the other 75% of the build cost will be funded by a self build mortgage.
The key difference between the two schemes is that the government loan is paid to the lender on completion of the build, instead of to the developer on sale of the property.
For the first time, Help to Build will create a level playing field for self build, custom build and new build. Help to Build will allow young people and those with smaller budgets access to self build mortgages with as little as a 5% deposit.
RIGHT TO BUILD
Legislation was passed in 2015, giving people the Right to Build their own homes. Since April 2016, all local authorities in England must record demand from those wishing to self or custom build in their area. Local authorities must provide for the demand within an ongoing three-year cycle. Currently, over 55,000 have signed up to the Right to Build Registers, seeking a serviced plot on which to self or custom build their own home.
Help to Build has distinct advantages when compared to Help to Buy because of the typical uplift in value at the end of a self or custom build project.