Before the current recession, building plots were not available or were being sold for grossly inflated prices.  The market has changed over the last 3 months and self-build sites are now more readily available and at affordable prices.  Additionally the downturn in the construction industry has dramatically reduced the labour costs associated with building your own home.  These factors make creating the home of your dreams a realistic proposition for would be self-builders.

How to pay for it all?

Despite the banking crisis, many lenders are still active in the self-build sector and are happy to structure mortgages that release funds at every stage during the development of the property.  It is even possible to fund a significant portion of the initial land purchase.  A self build mortgage will release additional funds at each of the five stages of a build project

• Foundations complete
• Wall plate level
• Wind and water tight
• First fix and rendering
• Completion

Traditionally self build mortgage lenders worked on a payment in arrears basis, meaning that you pay for the works up front and once completed the lender released funds for that stage.  This approach provided a great deal of security for the lender, but made cash flow very tight for the self-builder.  To help in these circumstances a number of lenders offer mortgages with advanced payments, whereby the money for a stage is paid to the developer in advance of the works being completed.  These products have an obvious advantage if cash will be tight during the build project, but you can expect to pay more for the benefit.

It’s all in the planning

The key to a successful self build is to (and forgive the pun) do your groundwork and cost every stage of the project not forgetting architects, solicitors and lending costs. A well formulated plan will reap rewards, impress lenders and will smooth the path to an early acceptance of the project.

With land prices at a near all time low and lenders offering a good range of self build mortgages this is the best opportunity for self–builders for many years.