Building your dream home in the UK can feel daunting, but the UK Self Build Grant, or Help to Build scheme, offers crucial financial support to make your vision more affordable. Below, we’ll guide you through the steps to qualify, what the scheme entails, and how it can benefit you in your self-build journey.
CONTACT THE NOTTINGHAMSHIRE BUILDING COMPANYThe Help to Build scheme is a UK government initiative designed to assist those planning to build their own homes. With just a 5% deposit, applicants can access an equity loan that covers up to 20% of the project’s costs (40% in London). This loan is interest-free for the first five years, making it easier to get started with a self-build project.
The total project, including land and construction, must not exceed £600,000. If you're purchasing land as part of the project, the cost of building must be no more than £400,000. This UK Self Build Grant is available for projects in England and is limited to your primary residence.
For those needing land, you can find available plots for sale on Zoopla.
The UK Self Build Grant, known as the Help to Build scheme, was introduced to address two main issues: the lack of affordable housing and the desire for more housing options tailored to individual needs. By providing financial support to self-builders, the government aims to encourage people to take control of their housing, creating homes that suit their lifestyle while increasing the overall housing supply.
The scheme primarily helps those who might struggle to secure traditional financing, such as:
People looking to build their first home can benefit from the equity loan, reducing their mortgage burden and making custom homes more affordable.
Those wishing to design and build a new home while selling their current property are eligible.
It’s especially helpful for families who need a larger home but might not afford high market prices for custom-built properties.
By supporting self-build projects, the scheme aims to offer more diverse, affordable housing solutions that reflect individual needs, empowering people to design energy-efficient, high-quality homes without the usual financial barriers.
You will need a 5% deposit for your self-build project. While your mortgage doesn’t need to be finalised before applying, you will eventually need a self-build mortgage from a lender participating in the UK Self Build Grant (Help to Build scheme).
Once your mortgage is secured, the government offers an equity loan of up to 20% (or 40% in London), reducing the amount you need to borrow from a bank. This means you’ll only need to take out a 75% mortgage, leading to lower interest payments over the first five years.
For an in-depth breakdown of the loan and repayment process, see the UK Government's page on Help to Build.
To be eligible for the UK Self Build Grant, several factors must be met. Each criterion ensures that the scheme supports those who truly need financial assistance to build their own home.
Applicants must be at least 18 years old. This ensures they are legally able to enter into financial agreements, such as mortgages and loans.
You must have the legal right to reside in England, as the Help to Build scheme is region-specific and only applies to properties being built within England.
The self-build home must be your main residence. If you own another property, you are required to sell it within 12 months of the new home's completion. This rule prevents people from using the scheme to build investment or holiday properties.
Whether you’re looking to get on the property ladder or are already a homeowner, you are eligible. Existing homeowners can apply for the UK Self Build Grant as long as they plan to sell their current home and live in the new self-build property.
A crucial eligibility factor is obtaining a mortgage from a lender that participates in the Help to Build scheme. This mortgage ensures that you have a reliable financing plan in place before accessing the government equity loan.
By meeting these requirements, you’ll ensure your eligibility for the scheme and unlock the financial support needed for a self-build project.
The UK Self Build Grant offers a range of benefits that make it more affordable to construct a custom home. Let's explore these in more detail, particularly how they might apply to a family looking to build their dream home.
One of the most significant benefits of the grant is the ability to design a home tailored to your family's needs. For example, a family of four might want to include three or four bedrooms, an open-plan kitchen for shared meals, and a playroom for children. With the grant, you can create a space that reflects your lifestyle, from larger living spaces to specialised rooms like home offices or extra storage areas.
Building your own home allows you to customise the internal layout based on your family’s daily habits. If you work from home, you could design an office with soundproofing and natural light to enhance productivity. For families with young children, an open-plan living area makes it easier to keep an eye on the kids while cooking or relaxing. You can also design storage solutions or energy-efficient layouts to maximise space and reduce future costs.
The flexibility of the scheme lets you choose where to build. For families, this could mean selecting a plot of land near good schools or close to green spaces for outdoor activities. Living in a location that suits your lifestyle, whether it's a rural area for peace and quiet or a suburban space with great amenities, makes the home even more suitable for your long-term needs.
Modern builds allow for state-of-the-art energy-efficient technologies. You can incorporate solar panels, advanced insulation, or underfloor heating, which could significantly reduce future energy bills. For example, a family might save hundreds of pounds each year by integrating these eco-friendly features, making the home not only cheaper to run but also environmentally friendly.
By borrowing only 75% from a mortgage lender (thanks to the equity loan), you reduce the amount of interest you need to pay. For families, this means freeing up money for other aspects of your life. For example, with lower monthly mortgage payments, you might have more to spend on high-quality kitchen appliances, furniture, or outdoor landscaping.
The equity loan is interest-free for the first five years, giving you breathing space during the early stages of homeownership. This is especially beneficial for young families who may want to invest in home improvements, furnishings, or even childcare without worrying about immediate financial strain.
Because the grant reduces the mortgage amount to 75% (or lower), you’ll pay less in interest, which lowers the financial risk for you and your lender. This can help prevent any struggles with mortgage repayments and reduce the chances of defaulting, particularly in the early years of homeownership.
Finally, building your own home means you’re likely to see an increase in its value over time, especially if you choose a desirable location or incorporate high-quality materials and energy-efficient features. If you ever decide to sell, you could benefit from the increased property value, making the grant a long-term investment in both your home and financial future.
By understanding these benefits, you can see how the UK Self Build Grant helps turn the dream of a custom-built home into a financially viable reality. Families, in particular, can enjoy a home that not only meets their immediate needs but also grows with them over time.
| With Equity Loan | Without Equity Loan | |
|---|---|---|
| Total build cost | £400,000 | £400,000 |
| Land cost | £150,000 | £150,000 |
| Building cost | £250,000 | £250,000 |
| Deposit | 5% = £20,000 | 5% = £20,000 |
| Equity loan | 20% = £80,000 | 0% = £0 |
| Mortgage | 75% = £300,000 | 95% = £380,000 |
With the equity loan, you'll benefit from lower mortgage repayments as you're borrowing less, making the project more affordable, particularly over the first five years when the equity loan is interest-free.
The UK Self Build Grant is an excellent opportunity for individuals who want to build their dream home while managing costs. With government-backed support, you can design and build a house that fits your specific needs and preferences, while keeping mortgage payments affordable. This scheme has the potential to turn your self-build project into a reality.
The Nottinghamshire Building Company can help guide you through every step of this process, from securing a self-build mortgage to completing your dream home. Be sure to explore the available land listings to get started on your journey!