Support for the self and custom build sector


If you dream of building your own home, you’re certainly not alone: 53 per cent of British people share that ambition, according to the National Custom and Self-Build Association. But when you first decide to embark on the project, you’ll be navigating some very unfamiliar waters – so let's have a look at what support is out there.

The Tory Government's manifesto in 2015 contained a commitment to double the production of self-build and custom-build homes – custom builds are built by a developer, but designed by the homeowner – by next year. In a report in 2017, the government found self-builders, of whom there are around 11,000 a year, faced two main challenges: obtaining land and obtaining finance.

Under legislation called Right To Build, introduced in 2016, district and borough council planning departments in England are required to keep a register of people who would like to build their own home, and provide land for them. It's called the custom and self-build register, and you can sign up at www.righttobuildportal.org.uk, either as an individual or as a group of people who want to build together. Councils are allowed to charge you to register, to make sure people who sign up are genuinely interested, but the charge is supposed to be reasonable. Some 33,000 people were on the register in November 2017.

Every October, councils are supposed to see how many people are on the register, and they then have three years to grant permission for a sufficient number of plots for those people. At the time of the report, the Government found that the amount of effort councils put into doing this varied.

As Michael Holmes, chairman of the National Custom and Self-Build Association, which provides support and advice to people thinking of building their own homes, put it at the time: “Where there is a will, there is tremendous progress. There are also lots of local authorities who are doing absolutely nothing. It is a lot more work to deliver sites for small to medium-size housebuilders. It is a lot easier to zone large sites and wait for them to be brought forward by landowners and major housebuilders for hundreds if not thousands of houses at one time.”

The government said in 2017 that it would consider tightening the laws if councils weren't complying with this duty, and the association is doing a lot of campaigning on the issue. Most councils now have a register, but it has this advice for anyone who feels their council is being obstructive: “You have the right to speak to someone in your planning department and ask what progress is being made locally, as well as how many people are on the register. If you feel that your local authority is not acting on their Right to Build duty, you can put pressure on them. Consider writing to both the council and your MP, and ask others who are interested in building their own home to do the same. It may be worth contacting your local paper to see if they’d be interested in reporting on the progress – or lack of it – happening locally.” It also has a template for a letter of complaint you can send if you think the charge for joining the register is too high – and suggests that you copy in your MP and the association as well.

Hopefully, the more people who sign up to the register, the more councils and the Government will see that there is an appetite for self-building, and this will be further reflected in local and national planning policy.

Finance was the other main barrier to people building their own homes. There are measures to help: self-builders and custom builders are exempt from a charge called the community infrastructure levy, effectively a tax on new builds to pay for facilities like schools and hospitals. There is also no stamp duty on self-build homes, and you can reclaim the VAT on the building materials – there is no VAT on the building labour either. (You have to pay VAT on the materials initially, and then reclaim it within three months of the building being completed, so make sure you keep records of everything you've paid and don't miss the deadline).

However, mortgages for self-builds tend to have higher interest rates than standard mortgages – usually between 4 per cent and 6.5 per cent – because the risk to lenders is greater; the lender doesn’t have the safety net of being able to repossess the house if the borrower defaults, because the house doesn't exist. The money is usually given to you in stages as the building progresses, rather than coming all in one go. You can usually move to a standard mortgage once the house is complete.

The government is encouraging financial institutions to lend to self-builders, and there are signs that mainstream lenders are responding – in May 2018, Ipswich Building Society announced it would start considering applications from people wanting to build prefab homes. However, it's definitely worth investigating smaller lenders, as they may well be more willing to lend than larger ones. Ecology Building Society, for example, specialises in lending for ecofriendly, energy-efficient self-builds and is open to more unusual methods of construction and projects that bigger lenders may not be so keen on. Another great resource is BuildStore, a specialist broker for self-builders, which has lots of advice on finance on its website.

Self-build architects Bluelime Home Design can help you with every stage of building your own home, from designing somewhere lovely to making sure it gets planning permission and even overseeing the building work for you. We've been working on self-builds, extensions and renovations across south east London and Kent for 13 years and now have offices in DartfordBromleyErithBexley and Croydon. Call us on 01322 517632 to chat about the architectural services we offer or to arrange a free architect consultation.

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