Guest article from Ipswich Building Society
With a shortage of houses in the UK and rising property prices you might have thought about building your own home, but dismissed the idea as a pipe dream. But with a recent report from the Office for National Statistics stating a detached property in the UK now costs an average of £370,000, increasing by 4.7% in the last 12 months, now could be the time to put your plan into action.
By building your own home you can design a property as individual as you, and decide what areas are important for you and your family. You may choose to invest heavily in insulation, for example, or seek to implement environmentally friendly initiatives.
Choosing a new property is hard – even more so when you are building it yourself. Here’s three things to help you get your project off the ground.
1. Tell your local council you want to join their Right to Build Register
In April 2016 the Self Build and Custom Housebuilding Act, known as the Right to Build Act, was introduced to make it easier for people interested in building their own home to find suitable land. This legislation means councils are now obligated to keep a register of people interested in acquiring land in their area.
You can register your interest directly with you local council or via the Local Self Build Register website. The council should then offer you a number of suitable council owned plots, if available, and can put you in touch with local landowners who have land to sell, via the register.
2. Consider Modern Methods of Construction (MMC)
A new way to ‘self build’, MMC is where new build housing is produced offsite in factories, in large quantities. It is then typically transported in sections to the customer to be assembled and finished on site. Many people could find that by utilising this method of mass production their project can be both quicker and cheaper than traditional ‘brick and block’ construction – whilst still allowing them to create a unique, purpose built home tailored to their own requirements.
Essentially MMC is the new generation of prefabricated homes – although vastly improved from the prefabs which were used following the Second World War. Typical MMC schemes are:
- Closed-Panel Systems: entire walls which come complete with cladding, doors, windows and ducting for wires/pipes. They are transported to the site and lifted into place using a crane.
- Open-Panel Systems: external cladding and joinery is fitted on site, without the need for a crane. This is ideal for projects with restricted access.
- Structural Insulated Panels (SIPs): this idea came from America in 2000, and is where the walls and roof are made from solid slabs of insulation providing excellent energy efficiency.
- Oak Framing: often constructed off site, oak frames are quickly erected and encapsulated with highly insulated panels.
You may be concerned about the durability of these schemes, and all MMC providers should be able to provide information about the resilience of their build. However, there are various other ways you could research this, such as the Build Offsite Property Assurance Scheme (BOPAS). By gaining BOPAS accreditation this means the scheme has been through a durability and maintenance assessment, guaranteeing that properties will be sufficiently durable and readily saleable for a minimum of sixty years.
3. Get your financing in order
Chances are you’ll need to borrow funds for your project, and you should be aware that getting a mortgage for the ‘yet to be built’ is a little different to a traditional, residential mortgage. Instead you’ll need to seek out a specialist “self build” mortgage.
These offer features such as lending money on the land (so you can keep your savings back for the build) and releasing funds in stages as the build progresses. This means you don’t have to borrow the whole amount from the outset and therefore pay interest on all of it, from day one.
It’s also worth bearing in mind that this type of mortgage is not just limited to brand new builds, and can be utilised for the conversion of an existing property or a knock down and rebuild project.
Many self build lenders will consider homes built using MMC schemes, such as the mortgages on offer from Ipswich Building Society. According to the Building Societies Association, “building societies are generally receptive when it comes to accepting MMC as suitable security for mortgage purposes, particularly those that lend in the self-build market as they are more experienced in assessing the potential risks of non-standard construction types”.
Criteria will differ between lenders but you’ll need to prepare some information about your project. You will need to:
- Find a suitable plot of land
- Obtain planning permission
- Have detailed plans of the property drawn up
- Provide a realistic projection of costs
- Have deposit saved / put aside – the percentage will depend on the lender
Finally, if you are unsure what mortgage may be best, you should consider seeking advice from a specialist mortgage broker.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE