As the government have recently announced to offer more help to first-time buyers to get onto the property ladder, we thought it would be helpful to provide a brief explanation of the new 'Help to Build' equity loan scheme, which went live as of 27th June 2022. The scheme aims to offer those who have not been able to buy their first home the opportunity to build it, with 5% deposits available and backed by £150 million of government funding.
So what is the Help to Build Equity Loan Scheme?
It is an equity loan, available to those living in England, who are looking to custom build, self-build or shell build their first home. This allows buyers to tailor a home to suit their individual needs, whilst handling and overseeing every stage of the project. For custom build, buyers work with a developer to design the build, specifications and layout of the home to meet their needs now and in the future. Self builds, on the other hand, allow buyers to create an individual home to suit their requirements and handle every stage of the building project. With shell homes, buyers purchase the outside shell of a watertight home, inclusive of walls, windows and a roof, however it is unfinished inside. It allows buyers to tailor the internal layout of the home.
The scheme went live on 27th June 2022 as part of the Conservative government's 'Levelling Up' initiative. It allows 5% deposits on land and building costs on new Help-to-Build mortgages. This will enable prospective first time buyers access to self and custom designed homes with much more affordable deposits, as the previous average for these types of mortgages sat at around 25%. The government hopes first time buyers will no longer be priced out of building their first homes, and will also 'level up' communities by supporting younger families into home ownership in areas they wish to live.
The ultimate goal is that people will find it easier to build or commission their own homes, leading to less relocation and promoting a more diverse housing market with real choice and control for consumers.
See the government advice via the following link https://www.gov.uk/government/publications/help-to-build-making-building-your-own-home-more-affordable
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