You are here: Home - Mortgages - Buy To Let - News -

Help to Build scheme open to applications this winter

Written by: Samantha Partington
Help to Build, the government’s latest equity loan scheme, has launched offering self and custom builders the opportunity to start their homebuilding project with a minimum of 5% deposit.

To apply, borrowers must first secure a self-build mortgage with a lender registered with the scheme, or through a broker who can arrange the deal. After that they must complete an application for Help to Build through Homes England.

If their application is successful, borrowers will receive an equity loan.

An equity loan of up to 20% is available, which rises to 40% in London. The balance of 75%, or 55% in London, is funded via a self or custom-build mortgage.

The loan amount is based on the estimated cost to buy the land required to build the property on.

If borrowers accept the equity loan offer they will have three years to buy the land and build their home.

Raymond Connor, chief executive of BuildLoan, said: “We have been waiting for Help to Build for a long time and, now that it’s here, we expect it to be extremely popular.

“The fact that people only need to find a 5% deposit by using this scheme, instead of typically 20 to 25% without it, is an extremely attractive proposition.”

To be eligible, borrowers must be aged 18 or over and have the right to live in England. They must live in the newly-built home as their only home and use a self-build mortgage from a lender registered with the scheme.

The government has allocated £150m to scheme to be used over the next four years unless demand is high and the funding runs out before then.

The total cost of the project including land is capped at £600,000, with a maximum limit of £400,000 for the build costs. This excludes professional fees, such as architect’s designs, planning and engineer’s reports which must still be funded separately.

“Brokers should familiarise themselves with the Help to Build equity loan scheme, as I can guarantee there will be lots of interest from people wanting to build their own home,” added Connor.

“BuildLoan will be working with our lender partners to develop products to support the scheme and make sure we are ready to lend as soon as we get the green light.”

Applications for Help to Build will be open from winter 2021.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week