The scheme has been designed to de-risk the process of securing a mortgage for self-built or custom-built properties and also allowing local authorities who have land develop to attract buyers.
Right to Build will see 11 local authorities, working with local developers and relaxed planning regulations to create new homes.
Cecilie Booth, director at Capita Asset Services, said: “The Custom and Self Build Scheme tackles a number of issues head on. For those wishing to build their own homes, access to mortgages has always been a challenge because lenders, not unreasonably, insist on staged payments. For local authorities, either those leading developments or with land to develop, this scheme reduces risk and guarantees that buyers will have agreed finance in place. Importantly it will help to tackle the need for new homes – according to government estimates, up to 100,000 custom-built and self-built homes could be created over the next decade.”
Under CSB individuals wishing to self-build or custom-build a home in one of the participating local authority areas will apply for a mortgage and, once agreed, the deposit, for as little as 5% will be paid direct to the local authority. The local authority will fund the cost of the build to completion at which point, the mortgage will be provided by the lender, covering the build costs, which will be fully repaid to the local authority. Once the house has been built, homeowners will simply have a mortgage on a custom or self-built property.
Stephen Noakes, Mortgage Director at Lloyds Banking Group, the first lender to take part in the scheme, said: “Lloyds Banking Group is committed to helping Britain prosper and we are extremely pleased to be able to support this new scheme to help people build an affordable home, in their local area, to their own specifications.
Improving the supply of housing across the country is crucial for maintaining a sustainable market, and this scheme will increase the options available for those looking for a new house.”
Eamonn Colman, Affordable Solutions Director for Countrywide plc, commented: “ Countrywide's full range of property services serve as crucial support mechanisms to help facilitate the building of much-needed new build stock. Our national ability to provide land for redevelopment, as well to supply mortgage, conveyancing and surveying services to assist home buyers is an important part in helping more people to achieve their dream of building a new home. Exploring innovations such as the Custom and Self Build Scheme that sustainably help to increase supply into the market are crucial in order to help meet current levels of demand."
