After finding appropriate land, you will need to investigate how you can finance your venture.
Many people apply for a self-build mortgage; which differs from a standard mortgage as the funds are released in agreed stages throughout the build and the project is monitored at intervals by the lender.
You can also raise funds by using savings and selling your existing home, although this option will involve finding elsewhere to live while the project is underway. Make sure you consider any additional interim living costs if you choose this option.
Small, medium or large developers can apply for the Home Builders Fund.
What is the Home Builders Fund?
The UK government has allocated a fund of £3 billion to assist in increasing new homes built in England, known as the Home Builders Fund.
The fund is a short or long term loan that will help small builders, community builders and custom builders as well as larger developers, with the financing of their build projects.
Private sector businesses are able to bid for the finance to build new homes that are affordable rented homes, shared ownership or rent-to-buy homes.
The loan is requested through an application process which begins by discussing the project with the Homes and Communities Agency (HCA) before the formal application process for the loan starts.
The Home building fund provides two types of tailored loan:
- Development finance – meeting costs for development
- Infrastructure finance – site and land preparation for development
Key features of the home building fund include:
- Short and long term loans
- From £250,000 - £250 million
- Five year term for development finance
- 20 year term for infrastructure finance
- Pre-agreed interest rates
- Non-financial support also available
The criteria for acceptance of finance will cover areas such as value for money, local support and timescale.