Tuesday, 15 May 2012 1:21 PM
One in 10 new homes in the UK are self built and the market generates £3 billion annually for the UK economy, says the BSA as it publishes a toolkit to provide information to encourage lenders not yet in this market to offer self-build mortgage finance.
Self build, or 'Custom Build' as the Government has called the sector, takes a number of forms including individuals building their own homes, kit or packaged homes, developer-built one-off houses and independent community collaboration where a group of self-builders buy a larger plot of land. It is estimated that the sector accounted for two of every three one-off homes built in 2010/11*, adding as many new homes annually as any of the major house builders.
Whilst the numbers may sound large, the UK lags well behind other countries. In Austria for example around 80% of all new homes are self built and in France and Germany the equivalent figure is circa 60%**. The UK Government has committed in its housing strategy for England to work with industry to double this sector over the next ten years, adding 100,000 homes to help fill the housing gap and support up to 50,000 jobs directly and indirectly per year - taking self build mainstream.
Mutual lenders are leading the way in providing mortgages for those who want to build their own homes, with 20 plus building societies already providing this kind of mortgage finance.
Housing Minister, Grant Shapps MP said: "Self builders built more homes last year than many of the major developers in this country. But I want to see more of this, see the industry fulfil its potential and double in size to ensure anyone wanting to build their own home has access to the help and information they need.
"And with as many as 100,000 aspiring self-builders looking for suitable plots, this presents an amazing business opportunity, not least for lenders. That's why I'm today backing the Building Societies Association's new toolkit and urging lenders to do what they can to back this growing industry.
"With the numbers of mortgages for self-build set to increase by a massive 141 per cent, I will be watching with interest to see how further support from lending companies can help spur on this self-build revolution whose time has most definitely come."
BSA Head of Mortgage Policy, Paul Broadhead, added: "Many building societies began life by helping local people fund the building of their homes, so self-build fits well with the mutual lending model. We hope that the lender toolkit will help to promote this more innovative area of lending to more providers.
"The consumer demand is there and the need for additional housing is evident. On top of this the Government has committed to maximise access for self-builders to land which is being released as part of its accelerated land-disposals programme and to require local authorities to take positive steps to facilitate this form of building. The barriers to self-build are steadily coming down."
13,800 self-build homes were completed in 2010/11 (DCLG estimate)
400,000 people searched Rightmove in September 2011 alone looking for a building plot.
100,000 people subscribe to one of the main plot-finding websites.
53% of respondents to a YouGov survey said they would be interested in building their own home. (survey carried out 4-6 October 2011 with 2051 UK adults)
Press Office Contacts:
Hilary McVitty, Head of External Affairs, BSA
Tel: 0207 520 5926
Mobile: 07597 837 326
Notes for Editors:
1. * DCLG Estimate
2. ** Government/Industry working group report, July 2011 - An action plan to promote the growth of self-build housing. This report can be down-loaded here http://www.buildstore.co.uk/ActionPlan/Govt-Action-Plan-July-2011.pdf
3. The building societies that will consider self build mortgage finance include:
Bath (via Buildstore), Beverley; Chorley; Cumberland; Darlington; Dudley; Earl Shilton; Ecology; Hanley Economic; Harpenden; Holmesdale; Ipswich; Loughborough; Mansfield; Melton Mowbray; Monmouthshire; National Counties; Newbury; Norwich & Peterborough; Principality; Saffron; Scottish; and the Vernon.
4. The toolkit, Lending Information for Self Build in the UK, provides information on the methods of self build, the mitigation of risk and capital treatment of loans and can be downloaded from: www.bsa.org.uk/docs/mortgages/lending_information_for_self_build.pdf
5. Grant Shapps press release issued 14/5/12 Self-build industry champion and new £30 million fund will boost the self build revolution http://www.communities.gov.uk/news/corporate/2143967
6. A link to the Government's Housing Strategy, Laying the Foundations: A Housing Strategy for England can be found here: http://www.communities.gov.uk/publications/housing/housingstrategy2011
7. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers serve around 25 million customers, have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of nearly £240 billion, 19% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 34% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House