The long awaited Help To Build scheme is set to launch soon but do you know how it could help you; or indeed if you're eligible to benefit from it? Find out in our low down.
The long awaited Help To Build scheme is set to launch soon but do you know how it could help you; or indeed if you’re eligible to benefit from it? Our Beginner’s Guide to the Help To Build Scheme has you covered. Read on for all you need to know!
The Help To Build scheme is a fund launched to help encourage British citizens to build their own properties. It has been designed to stimulate the construction of between 30,000 and 40,000 new homes every year across the UK.
The Help To Build scheme is a government initiative, fully funded by the British government. £150 million has been committed to help ‘kickstart a self-building revolution’ and was announced in April 2021.
Details still haven’t been finalised for the Help To Build scheme – or at least, at time of writing, they’ve not been publicly announced. What is known is that the scheme is intended to provide low-deposit mortgages through equity loans on self and custom build homes; not dissimilar to those available on the Help To Buy scheme. That scheme, however, is unsuitable for self-builders as it requires the equity loan to be paid upon legal completion directly to the developer. As typical self build projects require multiple payments to be made to multiple parties at different stages of progress, this set lump sum to be paid at the end doesn’t work for most building their own home.
The idea of the scheme is that it will meet the needs of self-builders in a way that the Help To Buy scheme didn’t and that it will allow for the financing of bespoke homes. The specific needs and requirements of the family who will live in the property are to be considered – with the government stating examples such as additional office space for those working from home and design customisation for those with access and disability needs.
The exact details have yet to be revealed publicly, but it is known that the scheme has been developed in collaboration with Homes England using a model created by NaCSBA (The National Custom and Self-Build Association – widely considered to be the experts in the industry). Using this model as a reference from which to draw conclusions, there are some aspects that can be predicted with a high degree of accuracy. This model stipulates that the scheme will be based upon a estimated build cost rather than estimated property price and that the government share of payment would be made on the date of practical completion rather than legal completion. In the absence of a house builder to pay, a mortgage lender is paid instead – and that lender is making the continuing repeat staggered payments to relevant parties along the way.
NaCSBA’s proposed model promises a self-build mortgage with just a 5% deposit; a competitive practice compared to traditional mortgages, which rarely offer such high funding rates. The government’s share will cover 20% of the cost of the build to this mortgage lender – reducing the mortgage value to 75% overall, despite just a 5% deposit made.
It is worth noting, however, that the Help To Build scheme’s closest counterpart is the Help To Buy initiative. This scheme changed on 1st April 2021 and heavily restricted its criteria – from all and any homebuyer with just one property to only first-time buyers, and with a much lower price cap (from £600,000 down to £186,100). While it is certainly hoped by self-builders that the Help To Build scheme will reflect the initial Help To Buy before such changes were enacted, there are definitely no guarantees that this will be the case.
Scotland, Wales and Northern Ireland all have their own self-build funds and initiatives, and if England’s Help To Build proves popular, its influencer may well help shape those schemes too.
Coronavirus has delayed the start of the Help To Build scheme but its launch remains an unknown with no confirmed start date just yet. A prospectus detailing the scheme was expected in spring 2021 but has yet to be released. In August 2021, Richard Bacon; the MP for South Norfolk and a self-build advocate; released a review into the state of self-building across the UK and called for the scheme to be launched by the end of September 2021 at the latest. It has still yet to happen.
One thing that has been confirmed is the length of the scheme! Help To Build is intended to run for four years from its first launch; but there is always the possibility for this to be extended thereafter, particularly if it proves to be a success.
There is genuine frustration from those in the industry around the delay to the Help To Build scheme beginning, but it seems to be favourably received in its proposals and scope. Andrew Baddeley-Chappell, the CEO of NaCSBA said of Help To Build in an interview: “The Help to Build scheme is an important step towards greater customer choice for those with ambition, sound plans and smaller deposits. Custom and self build is about the homeowner having control over the design and specification of their project — enabling them to create the home they want, rather than the one someone else believes they would like”.
This positive sentiment was echoed by Richard Bacon, the aforementioned MP and self-build advocate said: “I lobbied very hard to get something on Help to Build into the December 2019 Conservative manifesto. We can’t have discrimination against people who want to build their own home, so we need to extend the Help to Buy programme to include self-builders”.
Now we await a confirmed start date and from there, further details and application criteria. We look forward to it and hope it inspires a whole new generation of self-builders!
Before you can jump into the building phase, it is essential to design and plan out your project. Refresh’s design specialists work with homeowners to create digital 3D renderings of your ideas before moving on to creating detailed architectural concepts. To receive a no strings attached consultation from one of our design specialists, get in touch.
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