*UPDATE 27/06/2022 The Help to build fund is now open for applications! Visit the government website here for more information on how to apply.
Read the government’s press release here.*
Following on from the government’s announcement of the much anticipated Help to Build fund, the details about who can apply for the fund and what you will be eligible for have been released.
Since Help to Buy mortgages are not available for self and custom builds, this £150m fund will level up the funding landscape and be a great boost to the industry and to aspiring self and custom builders, allowing those with a smaller deposit to realise their own Grand Designs dreams.
Help to Build fund at a glance
What kind of build can I apply for?
The fund will be available for
- self build (where you buy the plot and do everything yourself)
- shell build (where a professional builds the shell home that you then fit out yourself)
- custom build (where a professional builds your entire home with your customisations)
Who’s eligible for Help to Build?
Anyone over 18 with the right to live in England who will be living in the newly built home as their only home can apply. You will also have to secure a self-build mortgage from a lender who is registered with Help to Build.
How does it work?
Much like the original version of the Help to Buy scheme, you will be able to borrow up to 20% of the total estimated cost (and up to 40% in London) of building the home in the form of an equity loan. This means you won’t need to pay interest on it for the first 5 years, although it also means that the Government will own that proportion of your home.
If you don’t already own the land, you can spend up to £600,000 for the total cost including the land, and no more than £400,000 on the cost of building it.
That means that many of our Pound Lane houses are eligible for the scheme.
How much do I need for a deposit?
You will need a deposit of at least 5% of the total build costs.
How much will I need in household earnings?
This is dependent on each lender, but as a guide – they will normally lend you between 4 and 4.5 times your household income.
This means that within London, to buy a £600,000 home, you would need a deposit of £30,000 and household earnings of approximately £73,300 (based on a 40% £240,000 equity loan from the Government).
Outside of London, for a £600,000 home you would need a deposit of £30,000 and household earnings of approximately £100,000 (based on a 20% £120,000 equity loan from the Government).
Will I be charged interest on the Help to Build loan?
The loan is interest free for the first 5 years, then you will have to pay interest starting from year 6.
How long do I have to build my home?
You will have 3 years after being offered a loan to build your home.
When can I apply for the loan?
Applications opened on 27 June 2022. Visit the government website here for more information on how to apply.
Is there anything I should be aware of?
The total amount you repay will depend on the value of your home at the time of repayment, not on the original amount you borrowed.
The loan is also not a discount on your home, but a loan to bridge the gap in funding that will need to be fully repaid at the end of the term, or when you sell your home.
There is also a £1 monthly management fee for the duration of the equity loan.
This is just a quick rundown of the basic details of the loan. For more in depth information on interest rates and other details, please click here.
Help to Build eligible homes from Unboxed Homes
If you are interested in building your own home via the Help to Build scheme, we have some homes at our current custom build development, Pound Lane, that will be eligible.
The homes will be available either via DIY (what the government terms a shell build) or a la carte (what the government terms custom build).
The homes at Pound Lane have been designed by multi-award winning architects, and each are situated on a very large plot, with a private garden, private parking, as well as access to a communal garden and private woodland.
Prices at Pound Lane start at £490,000 for a 3 bed shell DIY home and at £600,000 for a customised A La Carte house.
Prices accurate as of July 2022
Budget & specification may have to be adjusted to meet HTB requirements
New to Unboxed Homes?
We make self-build easy. We build customisable eco friendly new homes that you fit out yourself, or we fit out for you.
If you’ve ever wanted to build your own home but have been daunted by the idea or you want a project but don’t want the risk of buying a Victorian terrace that needs modernising, then sign up for our newsletter or our custom build register and we will send you emails with opportunities and land for sale that has been vetted as a good opportunity by our MD Gus Zogolovitch