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Housing minister calls for more self-build mortgages

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by Jan Harris
Housing minister calls for more self-build mortgages

Speaking at a conference organised by the Council of Mortgage Lenders, Housing Minister Mark Prisk encouraged lenders to make it easier for people to build their own homes.

He said that an increase in self-built homes could boost the UK housing market and should not be considered as a “pie in the sky dream”.

In the UK just 10 per cent of homes are self-built, in contrast to France and Germany where 60 per cent of properties are self-built, and the US where 45 per cent of home owners self-build.

Although the number of self-build mortgages has increased in the UK, there are still only around 20 products on the market.

“I’m not pretending self-build is the entire answer, but it is an element I want to encourage you to incorporate,” Mr Prisk told the audience of lenders.

The government has established a £30m investment fund to promote self-build and the first applications were approved in October.

More than £1 million of funding has been allocated for up to 20 self build plots.

Projects to build group of homes in North East Derbyshire and Peterborough will be the first to receive the funding and the money will be repaid to the fund as the plots are sold.

The self-build market in the UK has been hampered by limited availability of land and red tape, as well as a lack of self-build mortgages.

Mark Clare, group chief executive of Barratt Developments, also spoke at the CML’s conference and warned that there will be a one million shortfall of homes by the end of the year as demand continues to outstrip supply.

He warned that mortgage lending was failing to keep up with demand for housing.

“The level of finance hasn’t changed in four years and the level of housing transactions hasn’t changed in four years,” he said.

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News posted: November 8, 2012

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