The dream of building your own home can now become a reality with our flexible Self-Build Mortgage. Maybe you’ve already found the perfect plot of land and now you want to make sure that you’ve the right self-build mortgage to finance it?
A self-build mortgage differs from a regular house purchase mortgage in that the money is released in stages as the build progresses, rather than in one single amount.
Save money, have it your way
You might think that you have to be well off to build your own home, but it’s perfectly possible for anyone to successfully fund a project. The combined cost of land purchase, materials and labour will generally be less than buying an equivalent pre-built property. Plus, you can build the house the exact way you want it:
Do your calculations
The best place to start is to work out your budget – normally the total of your savings, equity in your existing home and borrowing capacity. It’s easy to overspend on a self-build project, often as a result of a kitchen upgrade or unexpected costs. So it’s
essential that you include a 10% minimum contingency fund within your budget. After that, the most important thing to consider is cash flow – will there be sufficient funds available to meet financial obligations?
Ensure proper supervision
If a builder is carrying out the entire project and is registered with the National House Building Council you will benefit from an NHBC Buildmark Warranty. This is a 10-year residential warranty and insurance cover for newly built houses and conversions. You can check if your builder is registered with the NHBC at www.nhbc.co.uk
If the home won’t be NHBC registered, you must employ an architect or an RICS qualified surveyor before the foundations are poured. They’ll need professional indemnity insurance to supervise the construction, and will need to provide the certification confirming the standard of construction. Without any of this documentation, future resale potential may be affected.
The Society also insist that you employ a suitably qualified project manager to oversee the costs. This should prevent the costs of the build plus fixtures and fittings exceeding your original plan.
How we can help
We can help you put a plan together for making your dream become a reality. We’ll also keep you informed of the benefits of self-build – such as the treatment of VAT on building work. You’ll find further details in the HM Revenue & Customs leaflet ‘VAT refunds for ‘do-it-yourself’ builders and converters’.
Renovations and conversions
If you’re taking on a renovation, conversion or extending your existing property, a Self-Build Mortgage would suit you too. Our mortgage advisers can put together a mortgage that perfectly suits your building circumstances.