★★★★★

Rated Excellent

UK Property Finance

★★★★★

Rated Excellent

open 7 days

Government Introduces Help to Build in England

by | Jul 6, 2022 | Other Finance News

A new scheme has been unveiled by the UK government, which will supposedly assist “thousands” of first-time buyers looking to get on the property ladder. Though unlike traditional Help to Buy schemes, this new initiative offers support to those who plan on building their own homes from scratch.

Named Help to Build, the programme will reduce the immediate costs of building a home by offering those who take advantage of lower-deposit mortgages with fixed introductory interest rates.

Mortgages Calculator

The scheme was officially announced last week by the Department for Levelling Up, Housing, and Communities, and £150 million has been set aside to help those who qualify.

First-time buyers are finding it increasingly difficult to get on the property ladder, with average house prices having once again surged to record highs in April at £281,000. Over the course of just 12 months, the average price of a UK home has increased by more than £31,000, pricing more prospective buyers than ever before entirely out of the market.

What is help to build?

Help to Build provides those looking to build their own homes with the opportunity to access a special mortgage of up to £600,000, which can be secured with a deposit of just 5% and offers the first five years interest-free. This 95% LTV mortgage will only be available through a selection of approved lenders; the scheme is being managed by Homes England.

Similar to property development finance, Help to Build mortgages will be issued in a series of stages, coinciding with the completion of key phases of the construction project. The maximum loan available will be £600,000 to cover the costs of the land and the home’s construction, or £400,000 on build costs alone where the land is already owned.

“Through the Help to Build scheme, we will help thousands more people onto the property ladder by giving them the opportunity to build homes that are perfectly tailored to their needs and in the communities they want to live in,” said Housing Minister Rt Hon Stuart Andrew.

“This innovative scheme will build on our work to break down the barriers to homeownership, as well as create new jobs, support the construction industry, and kickstart a self- and custom-build revolution.”

Who can apply?

While the scheme is designed to appeal primarily to first-time buyers, it will also be open to anyone interested in building their own home in England. In order to qualify, applicants will need an excellent credit score, a detailed breakdown of the project’s estimated costs, and evidence of full planning permission from the relevant authorities.

Mortgages Calculator

In addition, the newly constructed home must be the sole residence of the mortgage holder; the scheme is not available to those looking to build a second home, or a BTL home.

After the first five interest-free years, interest will apply, starting at 1.75% in the sixth year and rising annually thereafter.

“Self-build isn’t the preserve of the wealthy and Help to Build makes it more practical and accessible than ever before for people to build their dream home,” said Andrew Craddock, Darlington Building Society chief executive.

“This scheme also opens up opportunities for first-time buyers. It is a fantastic example of the market moving with the times and people’s changing wants and needs.”

Recent Posts

Financing Co-Living Spaces: The Next Frontier for UK Property Investors

The UK’s urban landscape is evolving, with young professionals, digital nomads, and transient workers seeking flexible, community-driven living solutions. Co-living, shared accommodation blending private bedrooms with communal spaces like kitchens, coworking areas,...

How Landlords Can Expand Their Portfolios Using Bridging Loans

For landlords looking to grow their property portfolios, bridging loans can be a powerful financial tool. These short-term loans provide quick access to capital, enabling landlords to seize time-sensitive opportunities in the UK property market. This blog post...

Are Bridging Loans Available to Businesses?

For businesses facing cash flow challenges or time-sensitive opportunities, bridging loans can be a game-changer. Property investors and businesses across various industries are increasingly using these short-term, flexible financing options. Can businesses access...

Right-to-Buy Mortgages: Turning Your Council Home Into Your Own

For many council tenants in England, the dream of owning their home is closer than they might think, thanks to the Right-to-Buy scheme. Introduced in the 1980s under the Housing Act, this government initiative allows eligible tenants to purchase their council home at...

Owner-Occupied vs. Investment Properties: Choosing the Right Commercial Finance Option

Are you a business owner looking to purchase commercial property in the UK? Whether you’re planning to occupy the space yourself or invest in a property for rental income, choosing the right financing option is crucial. In this blog post, we’ll explore the key...

Residential vs. Commercial Mortgages: Key Differences Every Borrower Should Know

When it comes to financing property in the UK, whether you’re purchasing your dream home or investing in a business premises, the type of mortgage you get will shape your financial commitments for years to come. In this blog post, we’ll compare residential and...

Using a Secured Loan to Raise a Deposit for Your Next Property Purchase

Purchasing a new property can be an exciting milestone, but one of the biggest hurdles is often coming up with a sufficient deposit. For many, a secured loan offers a viable route to bridge that gap. In this post, we will explore how secured loans work, the benefits...

Understanding Interest Rates and Loan Terms Through Calculators

Navigating the world of loans in the UK can feel overwhelming, especially when faced with various finance options and complex interest calculations. Fortunately, loan calculators are available for different options such as secured loans, bridging loans, development...

Key Housing Market Predictions for 2025

As we step into 2025, the UK housing market is poised for notable changes, particularly concerning mortgage rates. Recent analysis suggests a favourable shift for prospective homeowners and investors. Projected decline in mortgage rates The consumer body Which?...

How a Secured Loan Calculator Can Help You Make Smarter Financial Decisions

When contemplating a secured loan, the financial risks can be significant. Whether you're planning a home renovation, consolidating debt, or purchasing a vehicle, understanding your borrowing power and repayment terms is crucial. A secured loan calculator is a...

Categories