What is self-build?
The term self-build has been around for a while and has obtained various meanings. A self-builder can be defined as:
- Someone who employs a builder to build their home from beginning to end - this is also referred to as custom build
- Someone who has trade skills such as joinery, plumbing, electrical that can do some of the building work themselves
- Someone who has all the skills required to complete the build themselves.
How to get started with your self-build project
- Establish your maximum budget and allow for contingency
- Identify a suitable plot and acquire planning permission, if not already in place. Visit our Plots and Finding Land pages
- Ensure that services in place (or accessible) to the boundary of your plot
- Engage an architect or contractor to design your plans
- Obtain quotes from contractors / trades people to complete your build project
- Engage a contractor or individual trades people to build your home
- You may need to engage the services of a mortgage advisor.
Self-build finance options
Self-Build Mortgage Finance
The market for self build mortgage finance is very restricted, with limited number of lenders who will operate in the Scottish mortgage market.
A self build mortgage typically takes the form of stage payments unlike a more traditional mortgage where the loan is given in a single lump sum. The reason for this is so the lenders can reduce their risk by ensuring that the funds are being used in accordance with the build plan and cashflow forecast.
Terms vary by lender, as do timeframes for releasing the funds. Individual lenders will confirm drawdown stages.
Mortgage Broker
Whilst there are limited self-build mortgage lenders, a mortgage broker can access a wider range of finance that is not available from high street branches.
Self-Build Loan Fund
The Scottish Government has launched the Self-Build Loan Fund (SBLF) to assist where it has not been possible to obtain self-build finance from mainstream lenders, either directly or via a mortgage broker. The scheme can potentially provide assistance where self-build mortgage finance has been applied for and declined.
The Scottish Government has appointed Communities Housing Trust (CHT) to administer the fund on its behalf. Successful applicants will be able to borrow up to £175,000 to help them with their build. For more information visit the Scotland Self Build Loan Fund page.
Family Gifts
A relative may wish to gift you money to help you with your costs. A thoughtful act that can really help those struggling to fund their self-build. However, it must be noted that gifts of money may be subject to inheritance tax. To find out more about inheritance tax, follow the link: www.gov.uk/inheritance-tax
The market for self build mortgage finance is very restricted, with limited number of lenders who will operate in the Scottish mortgage market.
A self build mortgage typically takes the form of stage payments unlike a more traditional mortgage where the loan is given in a single lump sum. The reason for this is so the lenders can reduce their risk by ensuring that the funds are being used in accordance with the build plan and cashflow forecast.
Terms vary by lender, as do timeframes for releasing the funds. Individual lenders will confirm drawdown stages.
Mortgage Broker
Whilst there are limited self-build mortgage lenders, a mortgage broker can access a wider range of finance that is not available from high street branches.
Self-Build Loan Fund
The Scottish Government has launched the Self-Build Loan Fund (SBLF) to assist where it has not been possible to obtain self-build finance from mainstream lenders, either directly or via a mortgage broker. The scheme can potentially provide assistance where self-build mortgage finance has been applied for and declined.
The Scottish Government has appointed Communities Housing Trust (CHT) to administer the fund on its behalf. Successful applicants will be able to borrow up to £175,000 to help them with their build. For more information visit the Scotland Self Build Loan Fund page.
Family Gifts
A relative may wish to gift you money to help you with your costs. A thoughtful act that can really help those struggling to fund their self-build. However, it must be noted that gifts of money may be subject to inheritance tax. To find out more about inheritance tax, follow the link: www.gov.uk/inheritance-tax