Self-Build Mortgages

Self-build is more popular in the UK than most people realise, with smaller projects offering one affordable way to ameliorate the country’s housing crisis. Around 12,000 people use self-build mortgages to build their own homes every year. However, a self-build mortgage differs from a traditional mortgage in several important ways. Below is a guide to everything you need to know…


credit: Tapul

The stages of a self-build mortgage

A mortgage lender will typically release the money required for your self-build home in a number of stages. This differs from a traditional mortgage, where the money will generally be released in one lump sum. Your mortgage lender will want to carry out an inspection of the property at various stages before providing the next piece of funding.
These checks help to protect the mortgage lender from incurring losses if any aspect of your self-build project goes wrong. Because of the increased number of inspections, and the administration associated with them, self-build mortgages will generally be more expensive when compared to traditional lending rates, and you will need at least a 30% deposit.

What documents are required?

To prove your eligibility for a self-build mortgage, your mortgage provider will need the following information:

Planning Permission

You will need to show that you have planning permission from your local council for the construction to go ahead.

Land Ownership

You will also need to prove you own the land on which you plan to construct your self-build property – or that the land is currently on the market at a price which matches your loan application.

Plans and Build Cost

You should supply copies of the architectural plans for the property you wish to build, along with a detailed breakdown of the costing for each part of the project.

Details of the Construction Company

You will need to supply full details of the construction company who will be carrying out work on the site, along with evidence of their professional and industry qualifications.
Finally, you will, of course, also need to provide the documentation needed as part of a traditional mortgage application, such as bank statements, proof of ID and proof of income.



Read our short article: Small (But Perfectly Formed) Self Builds

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Solo Living
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