Surge in self-build mortgages

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Self-build specialist BuildStore has reported a 26% rise in mortgage applications year-on-year.

The news comes a year after the government announced further moves to promote the sector.

The government will also open up its £65m affordable housing fund to community self-build projects.

The figures come as the government announced a raft of measures to promote self-build homes. These include council tax discounts for self-builder and helping them find brownfield land.

BuildStore Financial Services chief executive Raymond Connor said:

“We know there is a lot of pent-up demand for people wanting to build their own homes, so these measures will help to meet that demand.”

He said the market was already improving:

“The backlog of unsold plots are now finding buyers, and those who owned already owned land, but held off during the recession are now also coming forward looking to borrow the cash to build.”

The guidance encouraging councils to assess demand for self-build and the tax exemptions for self-builders were particularly welcome, he added.

The number of mortgage lenders willing to consider self-build in England and Wales has increased from roughly 12 in 2011 to 26 today. More than 90% of these lenders are building societies.

Building Societies Association head of mortgage policy Paul Broadhead said the concept of custom-build homes had boosted the sector’s appeal:

“Before, people thought of it as Grand Designs-style boutique mansions. But with custom-build a developer may build the property to the point where it is wind and waterproof but you can decorate it yourself.

“It is more about customising property than walking around with bricks on your back.” In January, Datamonitor predicted that gross self-build lending would grow by 141% to £1.9bn by 2015, in part due to government support.