The new scheme will be available to prospective self and custom builders in England and has been allocated £150m over the next four years.
With some similarities to the existing Help to Buy Scheme, the Help to Build Equity Loan Scheme allows eligible applicants to undertake a self or custom build project with as little as a 5% deposit. An equity loan of 20% is provided by Homes England (up to 40% for London) and the balance of 75% (or 55% for London) is funded via a self or custom build mortgage.
BuildLoan has worked closely with Homes England over the last few years, contributing its experience and expert knowledge to help get the scheme off the ground.
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 those incurred for architect’s designs, planning, engineer’s reports etc., which must still be funded separately).
The Help to Build Equity Loan Scheme will lead to expansion of the self and custom build sector, bringing more opportunities for people to create their ideal home.
As with Help to Buy, brokers will have a big part to play in raising awareness of Help to Build and the distribution of the lenders’ products. BuildLoan will be ready to support brokers at each stage of their clients’ projects.
Raymond Connor, CEO of BuildLoan, commented: “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 20-25% without it, is an extremely attractive proposition.
“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.
“No one knows the self and custom build sector better than BuildLoan. It’s not just about the mortgage, there are so many other considerations, and we can easily work with brokers to assist them in offering the best advice for their clients.”
“BuildLoan will be working with our lender partners to develop products to support the Help to Build Equity Loan Scheme and make sure we are ready to lend as soon as we get the green light.”