Reports suggest 14% of lending completed by Saffron Building Society is for self-build mortgage products, according to figures released today.
Housing minister Grant Shapps announced a £30m fund in May which would provide increased awareness of the sector, a move which was championed by Grand Designs presenter Kevin McCloud.
Currently 10% of UK homes are self-built.
Now Saffron Building Society has revealed it has lent over £40m in self-build mortgages during the past 18 months, with these products now making up 14% of new lending for the society.
Jon Hall, chief executive of Saffron Building Society, said that the government scheme had provided a welcome boost to the sector.
"We have backed the self-build community for some time now. At a time when property prices are out of reach for many, self-build gives our customers another option to get on the housing ladder.
"We support the Government's initiative to increase funding to this sector, and hope that with this and a joint effort from lenders, the self-building community can thrive."
David Gilman, partner at conveyancer Blacks Connect, added:
"It's really encouraging to see lenders like Saffron Building Society embracing the self-build sector.
"We do a lot of conveyancing work in this market and we have seen it grow substantially in the last year. One problem has been a lack of funding, so it's great to see lenders actively building a presence in self-build. Let's hope more follow Saffron's lead."