The first lender has been named to support the Help to Build: Equity Loan scheme, which the government officially launched on Friday.
Darlington Building Society Help to Build mortgages are now available through BuildLoan to help provide self builders with financial assistance to build their dream home.
The Help to Build scheme, which will open for applications on Monday 27 June, works in a similar way to Help to Buy. A deposit of at least 5% is required and the government provides an equity loan of between 5% and 20% of the total estimated cost.
Self builders can spend up to £600,000 on a new home, which must include the cost of the land, and Darlington Building Society says it may be able to offer a self build mortgage of up to 95% for the land and build phase.
Andrew Craddock, chief executive of Darlington Building Society Chief Executive said: “Extending into Help to Build was a logical step as the Society has been at the forefront of self build lending for over a decade, in partnership with BuildLoan.
“Help to Build also helps to diversify the UK’s housing stock and alleviate the shortfall in available homes, and I for one am looking forward to seeing the new homes it creates.”
Why is Help to Build Significant?
The launch of Help to Build is a significant milestone for the housing sector because it makes custom and self build a more realistic and affordable option for someone looking to climb onto the housing ladder.
Whereas Help to Buy is unsuitable for self builders because it requires the equity loan to be paid upon legal completion to a developer, the lender of your Help to Build mortgage will release funds to you at various stages of the build, meaning you can make multiple payments to multiple parties through the build process.
Raymond Connor, chief executive of BuildLoan Chief Executive said: “People now quite rightly demand choice in every area of their lives, and one of the most important of these should be the homes they live in.
“The Help to Build Scheme will expand the self build sector but will also provide the type of finance required to boost the emerging custom build sector.”
