Government funded Help to Build scheme goes live
The government has launched a new Help-to-Build scheme that could help homeowners build their own homes.
People who use this scheme can put down a 5% minimum deposit, and the government will then lend them up to 20% of the property’s value through an equity loan. This number increases to 40% in London. The remainder will then be borrowed from a mortgage lender, and work on a typical repayment basis. The good news is that this equity loan remains interest free for 5 years.
From year 6, the charge will move to 1.75% interest, which will increase in line with the CPI.
Housing Minister Stuart Andrew MP has said “Through the Help to Build scheme we will help thousands more people onto the property ladder by giving them the homes that are perfectly tailored to their needs and the communities they want to live in.”
He suggested this scheme would bridge the gap between the deposit, the cost of the land, and building materials.
Those using the scheme must live in the property as their primary residence and will have three years to complete building work once the loan has been issued. There are also price caps in place, though this depends on where the buyer wants to build. In the North East, for example, this is £186,100 but London prices go up to £600,0001.
Alongside creating new jobs in the industry, this new scheme could bring an exciting wave of innovation for the construction and housing market by fore fronting self-build projects.
Applications for the scheme opened on the 27th June 2022 and closes on the 31st of March, 2023.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.