Self-build properties mortgage advances are expected to rise from £790million in 2011 to £1.9billion by 2015.
Research by Datamonitor has found that mortgages advances for self-build properties will experience a 141% rise by 2015, this growth will be fuelled by the growing consumer awareness of the self-build option. The consumer awareness growth will go hand in hand with the government measures to help those wanting to pursue the self-build route.
Datamonitor’s research report, UK Mortgage Market Map 2011, expects gross annual mortgage lending across the whole market to fall from an expected £138.5b billion in 2011 to £127 billion in 2012. However, the report also shows results of gross lending to rise by 31% in 2015; these results were calculated against the relatively low amount in 2011.
An analyst at Datamonitor, Daoud Fakhri explained:
“This growth will be driven by a number of factors. One of which is the fact that more consumers are becoming aware of the self-build option. This is largely due to the influence of TV programs like Grand Designs, the desire for more individuality and self-expression, and the perceived low quality and poor design of many new-build properties.”
“Perhaps even more significant than this is the fact that the government’s recently published Housing Strategy report has outlined a number of measures to facilitate the self-build path towards home ownership.”
A survey carried out by the Building Societies Associations showed that 53% of the UK residents would consider a self-build home. 53% of these residents said they are attracted to this option due to them having more control over the design and layout of the home, whilst a further 43% said that they are interested in self-build because they would be an able to build more cheaply than houses on the open market.
The survey also revealed the statistics relating to where the self-build properties are most popular, showing that is a particularly popular concept in Wales (63%) and Northern Ireland (62%). London showed the lowest percentage at 47%; these results could be in relation to the top three barriers being, the potential of being too expensive, and the difficulty in obtaining planning permission or finding suitable land.
Amongst the report’s recommendations are moves to encourage local authorities to establish demand for self-build housing and take steps to satisfy this demand.
Another potential difficulty would be to obtain a mortgage which most people fear, self-build homes seem to be more popular between families with three or more children however, a BSA mortgage advisor, Colette Best said:
“Ten years ago it was almost impossible to get a self-build mortgage, but times have changed and mutual lenders are leading the way.”
“Today there are more than 20 building societies that either offer a specific ‘self build mortgage’ or will consider financing a self build project. So for people who want to take a dream and make it a reality I’d recommend talking to their local building society.”
Self-build properties are definitely on the rise and these reports, mentioned above do; call upon the government to increase the amount of land which is available for self-build plots, through its accelerated public land disposals program.
The creation of an ‘information base’, for the provision of advice and information to self-builders and for the appointment of a, “Custom Homes” champion to raise the awareness of self-building will be a key factor needed to insure self-build benefits are promoted.
The survey carried out by the Building Societies Associations confirmed, as mentioned earlier, that 53% of consumers would build their homes if it was easier to do so. With the top barrier being the cost, a few finance tips have been revealed for aspiring self-builders:
- Plan before you approach lenders (Research house prices, and know the costs)
- Shop around for lenders whom meet the needs for your self-build project, stay away from trying to fund your project with credit cards or unsecured lending.
- Find yourself a plot before applying for a mortgage.
- Set a budget
- Set realistic time frames and schedules for completion
- Consider employing a project manager
- Obtain warranties as the work continues
The advice above is given in order to raise awareness for self-builds, if there are consumers in the UK whom are aspiring to building their own home, then advice and information needs to be seen as available.
Daoud Fakhri also commented:
“If the government’s reforms are successful in freeing up the market, the UK could be on the verge of a significant cultural shift with respect to house building, one which could create new opportunities for smaller and specialist lenders seeking to differentiate themselves from mainstream mortgage providers.”
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