In its Comprehensive Spending Review, the government has allocated to £2.2 billion to support homebuilders, including a a Help to Build scheme. Here's what we know so far. 

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As part of its Comprehensive Spending Review, released in late November 2020, the government has unveiled plans for its housing strategy which will for the first time include a Help to Build equity loan scheme.

A £2.2 billion fund will be introduced to support house builders which incorporates the Help to Build scheme alongside funding for small and medium house builders and Modern Methods of Construction.

While details of the scheme are still scarce, a Help to Build scheme is something that the National and Custom and Self Build Association (NaCSBA) has been campaigning for for some time.

What could a Help to Build scheme look like? 

A Help To Build equity loan scheme would support more people to build who would otherwise struggle to finance a build. 

The Help to Buy scheme, which exists in slightly different forms in Scotland and Wales, has been used to boost the number of new build homes in recent years, and has been extended far longer and to a greater extent than was originally planned. 

However, the scheme has failed to cover those who wish to build their own homes independently, as at present the equity loan is required to be paid on legal completion to the developer.

NaCSBA has developed a Help to Build scheme with 12 lenders which works in a similar way to the Help to Buy scheme; however, with a key difference. The loan is paid to the mortgage lender on practical completion of the self build rather than to the builder on the legal completion of the sale of the new build.

NaCSBA explains how the scheme works on its website: “The mortgage lender will provide funding for up to 95% of the costs of the build. This will enable the self builder to proceed with just a 5% deposit (as with Help to Buy). Then, in line with Help to Buy, when the build is completed the Government provide 20% of the cost of the property.”

How much funding is available?

While no details have been released of how the Help to Build scheme will look or the timescale it will operate on, the Comprehensive Spending Review outlines that £2.2 billion will be allocated to Help to Build in 2021-2022 and £3 billion in 2022-2023. 

 

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