Self build mortgage completions have grown by 144% compared to the same period in 2019, new research shows.
The building society believes that with the housing market prone to fluctuations, which has been impacted by the coronavirus pandemic, self build’s popularity could rise further.
Colin Field, CEO of Saffron Building Society, commented: “We are delighted to see that the interest in self build mortgages is on the increase. With the fluctuations in the market, it is a really feasible option for first-time buyers as a complete build will face too many financial changes – not just material cost.”
The completions rise recorded between April-May this year was 144% higher than the same period last year. A spokesperson for Saffron Building Society said that it would expect an upturn at this time of year, but these figures indicate that increased self build activity could continue throughout the year.
A self build project can save between 10-20% on the price of a new home, according to the National Custom and Self Build Association (NaCSBA).
However, self build homes only equate to 8% of all new builds in the UK, despite the recent rise in popularity. In contrast, this is 60% in Germany.
What is a Self Build Mortgage?
A self build mortgage differs from traditional mortgages, with funds released at key stages of the project, rather than a lump sum released upon sale of completion.
There are additional variations, so knowing more about how self build mortgages work can make the process easier when you come to applying for one.
Field added: “A self build might seem a little daunting, especially for a first-time buyer. But, the structure of the lending is so flexible, releasing funds at pre-set stages of the development to assist with cash flow, it is a very supportive way to get on the market.
“It can be an exciting and rewarding path to your first home; or update, grow or improve your current home.”
Self build mortgages cover a range of projects too, from barn conversions to rebuilds – they are not just for those building from scratch.
Get an idea of how much you need to borrow by using our Build Cost Calculator. Remember to add on the cost of your plot and a healthy contingency fund to compensate for any issues you may encounter.