Custom Build Homes (CBH) welcomes the new “Help to Build” Equity Loan Scheme (‘Help to Build’) announced by the Government today (26 November 2021) to support the diversification of the new homes sector and create additional housebuilding through the commissioning of custom and self-build homes. The scheme, which will be made be available across England, will enable more people to access mortgage finance to build or customise their own homes.
The Prospectus, published today, sets out the detailed design of Help to Build which, when launched officially, will stimulate the supply of opportunities for custom and self-build housing and begin delivering against pent up demand from younger homebuyers and those on modest incomes.
The scheme is being initially rolled out for four years with a funding allocation of £150 million, administered by Homes England.
The scheme has been in design for some time; indeed, it was first announced in the November 2020 Spending Review and has remained an important Manifesto commitment of the present Conservative Government.
The scheme has been designed in a similar way to the hugely successful new build product “Help to Buy”. It works by the Government committing to providing homebuyers with an equity loan equivalent to 20% of their agreed land and build costs. The funds are paid to the mortgage lender on completion of the build and homebuyers have a period of 5 years to repay the loan (without interest), as is the case with Help to Buy. In return for this commitment, mortgage lenders have agreed to fund custom and self-build projects with only 5% of land and build costs being required as a mortgage deposit. This is a stark improvement on the average deposit currently for a custom home, which sits at 15%, therefore it is likely to attract many new homebuyers to the sector, including first-time buyers.
CBH projects that £150 million could fund up to 2000 new custom or self-built homes, and while the funding is welcomed, it hopes the Government will continue to invest in the scheme if take-up is good because the statutory demand for custom and self-build housing already sits above 60,000 in England. The law dictates this number of units be supplied through the planning system within three years, under the Self-Build & Custom Housebuilding Act 2015, and much of the demand for this type of housing is made up of younger homebuyers seeking an alternative to volume built new homes.
Another factor that may constrain take-up is that the scheme does not cover any consultancy costs associated with a self-build project, such as those required for architecture, planning and engineering. These costs can be significant and will remain a barrier to entry for many who would otherwise be able to access the scheme. This will place an emphasis on the emerging custom build housing sector to bring to market sufficient opportunities to ensure the scheme is fully subscribed and can attract further Government investment to keep pace with increasing consumer demand for choice. This burden to deliver custom build opportunities will be felt by custom build Enablers, who Homes England now have a recommendation to support following The Bacon Review into the delivery of custom and self-build homes, earlier this year.
Tom Connor, CEO at CBH said:
“CBH is working hard to develop customisable housing products that breakdown the barrier of bespoke architecture and design, making it possible for more people to live in a custom home. While “Help to Build” is not a silver bullet for delivery in the sector, it’s another big sign that custom and self-build has the Government’s attention and that it is making good on its pledge to support delivery on behalf of the huge consumer audience that’s assembling.”
Full details of the scheme can be found here.
Custom Build Homes (CBH) has joined forces with specialist land promoter and development company Landström Group Ltd to unlock promoted land and deliver a custom build project near Hailsham, UK.
Landström operates on behalf of landowners to discover and maximise the potential of their land through the planning system. Their PropTech solution for identifying suitable land parcels for development is now bearing fruit as land appropriate for custom housebuilding is coming forward and Landström are recognising the opportunity to extend their proposition to become ‘Promoter Developer’.
The concept of ‘Promoter Developers’ has been advocated over recent years by CBH Founder Tom Connor. CBH is delighted to see land promoters, such as Landström, continuing with sites post planning, by creating serviced building plots and selling land direct to consumers. This approach is helping to unlock new sites for custom housebuilding and in turn maximising the return for their landowner clients. CBH looks forward to supporting this proposition as Enabling Partners in Hailsham.
The new custom build community, in East Sussex, benefits from Outline Planning Permission for five large detached homes. New homeowners will work with CBH to design and create their homes to meet their lifestyle needs now and in the future.
CBH is in the process of preparing a Design Code which will be utilised to secure Reserved Matters approval from Maidstone Borough Council and to set the parameters for individual house design, size, and specification.
CBH holds the largest and most accurate database of people looking to create a new custom home in the UK. It includes people’s housing preferences and is used for shaping new custom build developments nationally. Therefore, as Enabling Partners, CBH is able to ensure customer propositions are being developed to respond accurately to known demand and marketed to an active audience.
Commenting on partnering with Landström, Founder of CBH Tom Connor, said:
“I am particularly excited to see Custom Build Homes collaborating with Landström.
“Their digital proposition for capturing the potential of land for housing is as interesting as it is proving successful and on the right sites is delivering land for custom and self-build homes.
“I am confident that together we can deliver fantastic new places for people to live, in homes they love,” he added.
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The emergence of custom build housing on smaller sites has been well documented following legislation passed in 2016 and successful pilot schemes by Custom Build Homes (CBH) and others.
We are delighted to have several larger sites on our radar and to be involved in the pre-enabling work that is required to support landowners and promoters to secure potential custom build development sites in local plans and achieve planning permission.
Over the course of the previous 12 months we have been engaged by a SE of England based promoter to support them secure outline planning permission for 220 custom build homes, including 67 affordable homes, many of which will be delivered as intermediate affordable custom build homes, if permitted.
Tom Connor, Founder at CBH said:
“To continue to accelerate consumer understanding and demand for customised homes, the sector must be able to deliver housing at scale and at pace. We are excited to be able to support this scheme through the planning process as we believe it could really help to supply pent up demand from new home buyers for greater choice and affordable prices.”
Our work to support the application to date has largely consisted to providing up to date demand assessments for custom and self-build housing in District and to shape the application to give confidence to planning officers as to the deliverability of the scheme as customised homes of varying types, sizes and affordable tenures. As such, we remain optimistic with regard to the planning outcome and we look forward to developing our plans for delivery further, together with all stakeholders.
*Image credit: Land Logic Ltd
A message from Tom Connor, Founder & CEO at Custom Build Homes.
We’d had an excellent start to the year when Edinburgh closed its doors. We were enjoying multiple new sites being progressed through planning and we’d recently welcomed our new Director of Planning & Strategic Engagement, Mario Wolf to the company, whose addition was a sign of our forward trajectory.
Like millions around the world our team immediately began working from home, to do our bit in “flattening the curve” of coronavirus and it has been this way since. The subsequent instruction from Boris Johnson which brought about a national lockdown caused the most fundamental change in the way people live overnight. The reality set in that what was about to happen would be unlike anything we’ve seen in our lifetimes.
Now, as then, those risking their own lives to save others are at the forefront of our minds. Never have we been so proud of our NHS. Our thoughts and most heartfelt condolences are sent to all those who have lost someone during this time, and we hope those who may feel like they are losing their selves in isolation find their way through. But as we extend our gratitude and our thoughts, I find myself thinking; what exactly is “the new normal?”, it seems to change every day. I doubt I am alone when I say this, “I hope we do not come out (of lockdown) the same way as we went in. I believe there are many positive changes in the way people live their lives at this time, and what is for certain, our homes are very much in the spotlight.
Our homes are being tested on a national stage and everybody is watching. They are doubling as workspaces or tripling as workspaces and schools, alongside being a safe haven from the world outside, which at this moment can be a scary place. At Custom Build Homes, we wanted to understand how people’s homes have adapted to meet today’s new demand. Over the course of the last ten weeks we have seen many people turn their living spaces into gyms, yoga studios, art studios, offices, classrooms, and even pubs! It got us thinking about our mission. We aim to enable people to access a home which is designed or customised to be suitable for their individual needs now and in the future, a home that is well designed, sustainable and affordable.
We realised this pandemic could offer us, as a nation, the chance to step up and take control to change the way new homes are designed and built, moving forward. The cold reality is that our housing is not suitable for other aspects of our lives which are ordinarily catered for by gyms, workplaces or schools. They are not designed to be lived in as much as they are basic shelters. At a time of confinement and quarantine, design can often be forgotten. Now more than ever could the power of well-designed homes be used to highlight how our lives could be enhanced as a result? The new normal of homecooked meals, exercising at home, meditating, families being together in the home and a better work life balance can become permanent, if our homes allow it.
We don’t yet fully know how this pandemic will play out. But we can be certain that it will have a massive social consequence and that lasting change, whatever it may be, will change the way we view our homes forever. Practices like remote working and home schooling will no longer be for the select few, they will remain, at least at specific times, the norm into the future. Our thought processes have changed, we now look upon our homes as places to move through and around. They are no longer units, but places in their own right where areas for families, zones for work and outdoor spaces for exercising should be considered in their design. We must now engage properly with the opportunities we have under the new Right to Build legislation which gives powers to consumers in England to design and create their own homes and local planning authorities are obligated to provide new permissions on an ongoing three-year cycle.
As such, we ask everyone out there, help us keep the good aspects of our “new normal” and sign up to our demand register at www.custombuildhomes.co.uk/demand today.
It’s your right, and the time is right now!