Newspaper article The Journal (Newcastle, England)

Your Home Can Truly Be Your Own - When You Build It Yourself

Newspaper article The Journal (Newcastle, England)

Your Home Can Truly Be Your Own - When You Build It Yourself

Article excerpt

The dream of building their own home is coming true for an increasing number of people. Kevin Robinson tells you how to finance your self-build ideal

ROCKETING house prices are seeing more people choose to create their own home for a fraction of the cost, and have led to an increased demand for self build mortgage finance. In fact, one in 10 new homes in the UK is now self-built.

Increasingly, building their own home isn't just something other people do - and it needn't remain a dream. Mortgages now exist specifically designed for the self-build and renovation market, allowing people to borrow the purchase money in advance - and have the rest released in stages for the important refurbishment work.

A self-built home can be worth between 25 and 30pc more than the land and building cost once completed. And, with self-build, there are a number of tax advantages which could save you tens of thousands of pounds.

However, property that needs even slight cosmetic renovation can see lenders withhold a chunk of money until the renovation is complete. This is because traditional lenders can only value and lend on tangible assets. It can be very hard for them to assess the real value of your completed self-built home before a brick is laid.

Building your own home will take a lot of thought and planning. Not only do you have to make up the shortfall in order to buy the property, but then you have to pay to have the work done before the lender will release all the funds.

You actually have to do the work before you get the money, so your finances always have to be one step ahead of the lender, who is releasing the money in arrears. Preparation and a good relationship with your lender is essential and this was the case for one local self-build project, thanks to the Universal Building Society's bespoke approach. …

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