Help to Buy is great but what about Help to Build?
While many of us dream of buying our own home, there are many others who in fact dream of building theirs. However with average loan to value (LTV) mortgages for self build properties standing at 62%, for the majority this idea will be nothing more than a pipe dream.
Over the last six years, self-build lending has dropped by a third. As a result the self-build sector contributes just 7.6% to new housing supply in the UK, significantly behind our continental counterparts such as Hungary (52%) and France (38%).
According to a report by Lloyds Banking Group and The University of York, there are a number of reasons for the decline including, in particular, a lack of specific self-build-designed loans with higher LTV deals.
Without the availability of higher LTVs younger borrowers are all but immediately priced out of the market.
Lynne McCaffrey is the Head of Property at Goldsmith Williams:
“With the government making the bold statement of wanting 200,000 new builds constructed within the next decade, significant steps must be taken from various parties in the industry in order to make that a feasible target.
“This would naturally include lender innovation and the reintroduction and revamp of specific self-build mortgage ranges. However it is unfair to rely on lenders only; the government will need to be prepared to support accommodating lenders in a similar way to its existing Help to Buy and Funding for Lending Schemes.”
Content correct at time of publication