A group of MPs will explore whether it is possible to include self-build projects in the Government’s Help to Buy mortgage indemnity guarantee scheme as part of efforts to make the sector more accessible.
An all-party parliamentary group for self-build has been set up to explore how to boost the number of self-build projects in the UK from 100,000 to 200,000 within the next decade.
Conservative MP for South Norfolk and founder of the group Richard Bacon says the MIG element of the Help to Buy scheme could provide support for self-builders.
He says: “From January 2014, the new Help to Buy scheme will allow people to gain mortgages up to 95 per cent of a property’s value. Such money could also support self-build.
“Not only would people get more for their money in terms of their finished property but, upon completion, they would very likely be in positive equity. In this way, self-build actually offers a lower risk to lenders.”
A report published last week by Lloyds Banking Group and the University of York highlighted a lack of funding options for self-builders.
Your Mortgage Decisions director Dominik Lipnicki says: “Self-build is currently very niche and the biggest problem is that the LTVs available are very low. This would go some way towards helping with that as long as there are enough lenders willing to do it.”