Over £150 million funding to kickstart self-building revolution

New ‘Help to Build’ scheme will make it easier and more affordable for people to build their own homes.

  • New £150 million ‘Help to Build’ scheme to make it easier and more affordable for people to build their own homes
  • New homes can be made to order or built from scratch, and will benefit small building firms as part of the government’s Plan for Jobs
  • £2.1 million additional funding to help communities decide where they want new homes, shops and offices to be built and what they should look like

New plans supported by over £150 million in new government funding will make it easier and more affordable for people to build their own homes, the Housing Secretary Robert Jenrick has announced.

The ‘Help to Build’ scheme will ensure that self and custom home building can become a realistic option to get onto the housing ladder through lower deposit mortgages.

Lowering the required deposit will free up capital, so people can build the home that they want and need whether it’s a commissioned, made to order home, or a new design from scratch. The scheme will provide an equity loan on the completed home, similar to the Help to Buy scheme.

Made to order homes allow people to customise the home they want based on existing designs. This could include more office space, or a particular design to support a family’s requirements including for disabled or older people.

Self and custom build could deliver 30-40,000 new homes a year: a significant contribution to the country’s housebuilding ambitions.

The scheme is part of the government’s wider Plan for Jobs as the new plans will also benefit small building firms. SME builders account for 1 in 10 new homes and the scheme will help scale up the number of self and custom build homes built every year.

Housing Secretary Rt Hon Robert Jenrick MP said:

Building your own home shouldn’t be the preserve of a small number of people, but a mainstream, realistic and affordable option for people across the country. That’s why we are making it easier and more affordable – backed by over £150 million new funding from the government.

The scheme we have launched today will help the thousands of people who’d like to build their own home but who’ve not yet considered it or previously ruled it out.

Our plans will help get more people on to the housing ladder, ensure homes suit people’s needs like home working or caring for relatives, whilst providing an important boost to small builders and businesses too.

The Prime Minister has commissioned Richard Bacon MP to lead a review on how we can scale up the delivery of self and custom build homes. The review will report its findings and recommendations in the summer.

This follows the news that major lenders have signed up to the government’s new 95% mortgage guarantee scheme to help more people than ever on to the housing ladder. Lloyds, Santander, Barclays, HSBC and Natwest are launching mortgages under the scheme today with Virgin Money following next month.

The government has also announced £2.1 million in funding to help communities have a greater say in how their local area is developed. The fund will boost neighbourhood planning by giving additional support to local authorities in under-represented areas.

Neighbourhood planning gives communities direct power to develop a shared vision for their neighbourhood and shape the development and growth of their local area. Communities are able to choose where they want new homes, shops and offices to be built, have their say on what those new buildings should look like and what infrastructure should be provided, and grant planning permission for the new buildings they want to see go ahead.

A further £330,000 is also available to councils wishing to pilot this approach to neighbourhood planning.

The Self and custom build action plan has also been published today, which sets out government measures to support the sector.

This includes the next steps in the review of the Right to Build legislation, to assess whether further reforms are needed and confirmation of further funding for the Right to Build Task Force which will help local authorities, community groups and other organisations help deliver self and custom build housing projects across the UK.

From: Ministry of Housing, Communities & Local Government

Published: 24 April 2021

New 95% mortgage scheme launches

New 95% mortgage scheme launches

A new government-backed mortgage scheme will help first time buyers or current homeowners secure a mortgage with just a 5% deposit.

  • 95% mortgage guarantee launches today, available on high streets across the country
  • Scheme part of a range of ownership options to help make home ownership a reality
  • New figures show demand for home ownership has soared during lockdown, with nearly 80% of private renters now saving for a deposit
  • Today’s launch further strengthens government commitment to supporting the housing sector

A new government-backed mortgage scheme to help people with 5% deposits get on to the housing ladder is available to lenders from today (19 April 2021).

First announced at the Budget, the scheme will help first time buyers or current homeowners secure a mortgage with just a 5% deposit to buy a house of up to £600,000 – providing an affordable route to home ownership for aspiring home-owners.

The government will offer lenders the guarantee they need to provide mortgages that cover the other 95%, subject to the usual affordability checks.

The scheme is now available from lenders on high streets across the country, with Lloyds, Santander, Barclays, HSBC and NatWest launching mortgages under the scheme today and Virgin Money following next month.

The government has made clear its commitment to tackling inequality in the housing market and levelling up the country. Official statistics show more homes were delivered in 2020 than in any year since 1987.

In 2019 a pledge to build 300,000 new and attractive homes a year was announced with an investment of over £12 billion in affordable housing over the next 5 years – the largest investment in a decade.

Since 2010, more than 687,000 households have been helped into home ownership through government schemes, but when asked, 69% of private renters and 63% of those living at home who had looked into a mortgage said they cannot find many mortgages with a low deposit. Today’s new 95% mortgage scheme will now make it even more accessible to own a home.

Miguel Sard, Managing Director of Home Buying and Ownership at NatWest said:

We welcome the government’s new mortgage guarantee scheme to give further support to those with smaller deposits. For those customers, particularly younger or first-time buyers, saving up for a big deposit can often be difficult, and we know people in these groups are some of the hardest hit by the effects of the pandemic.

A government-backed scheme will help segments of the market for whom home ownership has felt far out of reach in recent months.

Mark Hayward, Chief Policy Advisor at Propertymark, said:

Over the past few months, there has been an increase in the number of prospective buyers and the number of house sales taking place. Coupled with the decision to extend the Stamp Duty holiday further, the Mortgage Guarantee Scheme will provide additional options for more people to become homeowners.

Access to finance and affordability plays a key role in the ability for people to purchase their dream home, so we are now very pleased to see further support for both first-time buyers and current homeowners looking to buy property or move up the housing ladder.

The scheme is one of a range of flexible home ownership options available. These include Help to Buy, Shared Ownership and the First Homes Scheme. Figures show that the number of mortgage approvals for house purchases in January 2021 was 99,000 – a 40% increase on January 2020.

Part of the government’s Plan for Jobs, the scheme will help to support the housing market and protect jobs and businesses across the housing supply chain, from housebuilders and estate agents, to tradespeople, DIY stores and removal firms.

The intervention comes as new figures published by the government show a greatly increased desire for home ownership and a sharp reduction in 95% mortgage availability over the past year.

The figures show that more than two-thirds of private renters (68%) and those living at home (72%) want to buy, with the majority saying the pandemic has made them more aware of the importance and benefits of home ownership.

The survey also found that 76% of private renters and 70% of those living at home have started saving for a deposit or put more money into their savings during the pandemic.

The delivery of more homes was also an integral part of the government’s most ambitious overhaul of the planning system in decades. The reforms will streamline processes, cut red tape and harness technology to deliver homes faster.

Other government home ownership options available include

 

95% Mortgages: First time buyers will be able to purchase a home with only a 5% deposit. The scheme will help to increase the supply of 5% deposit mortgages for credit-worthy households by supporting lenders to offer these products through a government-backed guarantee.

 

Help to Buy: A government equity loan that supports first time buyers with a low interest loan towards their deposit.

 

Shared Ownership: Gives first time buyers the option to buy a share of their home (between 25% and 75%) and pay rent on the remaining share.

 

First Homes: A new scheme designed to help local first-time buyers and keyworkers onto the property ladder, by offering homes at a discount of 30% compared to the market price.

From: Ministry of Housing, Communities & Local Government and HM Treasury

Published: 19 April 2021