Desire for self-build revolution exists if barriers to entry lowered says Building Societies Association
Monday, 10 October 2011 3:11 PM
In January 2011, Grant Shapps, Minister for Housing and Local Government asked the self-build industry to look at what needed to be done to help more ordinary people build their own home.
As part of his plan to increase the number of homes built in this country he told them that he wanted to "start a self-build revolution". "An action plan to promote the growth of self build housing" was subsequently published in July 2011.
Today a survey amongst 2,000 UK consumers carried out on behalf of the Building Societies Association shows that if the barriers were lowered a remarkably large proportion of the UK population would consider building their own home either directly or using the services of architects and contractors. Whilst ten years ago finance for self-build was virtually impossible, today there are more than 20 building societies that either have specific self-build mortgages or will consider self-build projects.
Kevin McCloud, presenter of Channel 4's Grand Designs programme, calls for a concerted effort by local authority planning departments, developers, housing associations and mortgage companies to help people over the self-build hurdles.
The survey found that:
Over half (53%) of people in the UK would consider building their own home in the UK if they had the opportunity. The majority were attracted by the ability to have control over the design and layout of their home (53%), and the ability to build more cheaply than buying on the open market (43%).
The research shows that self build is a particularly popular concept in Wales (63%), Northern Ireland (62%) and the East of England (59%) and least popular in London (47%) and the Midlands (48%).
The potential for it to be too expensive (40%), difficulty in getting planning permission (39%) and the availability of suitable land (38%) were the top three barriers cited by the 2,051 UK adults surveyed. These were closely followed by not knowing where to start (34%), concerns over expertise to do the job (33%) and the potential difficulty of getting a mortgage (30%).
Self build was most popular amongst families with three or more children where three-quarters (75%) of those surveyed said that they would consider building their own home. Perhaps surprisingly the aspiration to build was not the preserve of the wealthier in society with an even spread of interest across all socio-economic groups (ABC1: 53% and C2DE: 54%).
Quotes:
Speaking to aspiring self builders at Grand Designs Live in Birmingham, Colette Best, BSA Mortgage Policy Adviser, told the audience that it is achievable and offered tips for getting an affordable self build mortgage.
"Ten years ago it was almost impossible to get a self build mortgage, but times have changed and mutual lenders are leading the way. Today there are more than 20 building societies that either offer a specific 'self build mortgage' or will consider financing a self build project. So for people who want to take a dream and make it a reality I'd recommend talking to their local building society."
Sharing the platform, Kevin McCloud, presenter of Channel 4's Grand Designs programme, said:
"Times are hard and the looming difficulties of finance, land and the loneliness of the long-distance self-builder put most people off. Helping people over the hurdles will need a concerted effort by local authority planning departments, developers, housing associations and mortgage companies. But the signs are there that we could see a lot more assisted self-build and community self-build in the UK."
Finance tips for aspiring self builders:
Plan before you approach lenders. For example, research house prices in the area and know as much as you can about your proposed build.
Shop around for a lender that meets the needs of your self build project - don't try to fund your build on unsecured lending or credit cards as this is very expensive. It is mostly building societies that are active in the self build mortgage market: a number offer specific self build mortgages or will consider individual self build projects within their local area.
Find your building plot before applying for a mortgage. This allows the lender to see the site, assess its value and make an estimate of the loan-to-value ratio before making a mortgage offer.
Set a budget for the total build. This will include how much you expect to pay for the land plus how much you intend to spend on the build. It should also include how you propose to fund it - i.e. will you be selling your current home and if so at what point in the build?
The budget should also include how much you expect to spend at each stage, include the cost of warrantees, labour and a contingency fund for unexpected costs.
Most self build mortgages will pay out in around five or six stages. At the end of each stage the
lender will send round a valuer to assess the worth of the property prior to releasing the next tranche of funds.
As a ball-park figure you could expect in total to get a mortgage of up to 65% of the value of the land and 75% of the value of the completed property. Some lenders will go slightly higher.
Set a realistic schedule for your build that you, your family and contractors are happy with.
Consider employing a project manager. Whilst they cost money they can help you keep on time and to budget.
As the build progresses make sure that you obtain warrantees for the work as it is done. This will help reassure the lender of the long-term viability of the build.
~ Ends ~
Press Contacts:
Hilary McVitty and Rachel Wylie Tel: 0207 520 5926/5905
Notes to Editors:
Self build case studies are available - please contact the BSA Press office.
Photographs of Kevin McCloud and Colette Best are available from the BSA press office.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2051 adults. Fieldwork was undertaken between 4th - 6th October 2011. The survey was carried out online.The figures have been weighted and are representative of all UK adults (aged 18+).
Published July 2011 "An action plan to promote the growth of self build housing" was published it can be found at www.nasba.org.uk
Additional Survey data:
Cost was the most common barrier for those living in the North (44%), Midlands (45%) and Northern Ireland (48%). Planning permission deterred most people living in Wales (49%) and finding a plot of land was the barrier chosen most by those living in the East (37%) and Scotland (44%). Londoners said knowing where to start was a big barrier (43%), closely followed by finding a plot (42%). 2% of those surveyed said that they had already built their own home.
The building societies that will consider 'Self Build' finance include:
Bath Building Society, Beverley Building Society, Chorley and District Building Society, Cumberland Building Society, Darlington Building Society, Dudley Building Society, Earl Shilton Building Society, Ecology Building Society, Hanley Economic Building Society, Harpenden Building Society, Holmesdale Building Society, Ipswich Building Society, Loughborough Building Society, Mansfield Building Society, Melton Mowbray Building Society, Monmouthshire Building Society, National Counties Building Society, Newbury Building Society, Norwich & Peterborough Building Society, Principality Building Society, Saffron Building Society, Scottish Building Society, Swansea Building Society and the Vernon Building Society.
The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 48 UK building societies. Mutual lenders and deposit takers have total assets of over £365 billion and, together with their subsidiaries, hold residential mortgages of almost £235 billion, 19% of the total outstanding in the UK. They hold more than £245 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for about 35% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
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