Custom Build Funding Scheme Launched

Capita Asset Services and Lloyds have launched a new scheme to de-risk self-build and custom build mortgage lending.

The Custom and Self-Build Scheme (CSB) intends to help more people to build or customise their own home. It will also assist local authorities to make more land available for self-build and custom build projects.

It will be available to individuals looking to self-build on land councils identify for custom home developments.

The CSB is based on the existing local authority mortgage scheme. Over 100 councils have successfully used this scheme to help support mortgages for first-time buyers.

As well as giving self-builders access to funding, it will also help participating local authorities meet the requirements of the government’s proposed Right to Build your own home. The Right to Build is currently being pioneered by 11 vanguard councils.

How the Custom and Self-Build Scheme will work

Under the CSB, individuals who want to self-build or custom build a home will apply for a mortgage. Once this is agreed, they pay the deposit (which could be as little as 5%) directly to the local authority.

The local authority will then fund the cost of the build through to completion. As soon as the house is complete, the mortgage company will repay the local authority in full.

The homeowner will simply have a normal mortgage on the finished property.

“The Custom and Self-Build Scheme tackles a number of issues head on,” said Cecilie Booth, director at Capita Asset Services. “For those wishing to build their own homes, access to mortgages has always been a challenge. This is because lenders, not unreasonably, insist on staged payments.

“For local authorities, either those leading developments or with land to develop, this scheme reduces risk and guarantees that buyers will have agreed finance in place. Importantly it will help to tackle the need for new homes.”