Government launches plan to boost custom building housing

Custom Build Homes (CBH) welcomes the Government’s announcement today (Saturday 24 April) of a major Action Plan, including over £150 million funding, to help more people build their own homes.

The Plan, which comprises of new initiatives, marks a further step in the Government’s ongoing backing of the self-build and custom housebuilding sector in England: 

  • A new “Help to Build” low deposit mortgage scheme supported by over £150 million
  • Funding for local authorities to develop public land for custom and self-build housing
  • A review into how delivery of custom and self-build housing can be increased and accelerated
  • A law review to enable more people to access plots in their local areas
  • Further support for the national Right to Build Task Force.

Each of the initiatives target an area of challenge which to date has constrained the growth of the sector and are expected to improve people’s chances of accessing a custom home. 

A new “Help to Build” mortgage will be launched to enable people to custom build a new home with only a 5% mortgage deposit. The scheme which is akin to the hugely successful “Help to Buy” product will also feature Government backed equity loan. Help to Build is expected to have a fundamental effect on the sector as it will open it up to a segment of the market which has been most affected by rising house prices and under supply of affordable new homes namely, young professionals, first time buyers and those on lower incomes.

CBH has access to the largest and most accurate database of people looking to create a new home nationally. This includes people’s housing preferences as well as information relating their preferred location and budget. From this, we are confident the Help to Build scheme can have a major positive impact on many people and boost the number of new homes delivered annually.

Another initiative announced is the Brownfield Land Release Fund (BLRF), which is designed to support local authorities to bring forward their brownfield sites for housing development and self and custom-build serviced plots. The fund makes up to £25 million capital grant available to eligible English local authorities to support the release of brownfield and greenfield sites they own, for self and custom build developments. The Fund, which will be administered by One Public Estate, must be utilised before March 2022. Funding is for capital works, to release local self and custom-build plots by the end of March 2024 and must address a local market failure. Priority will also be given to projects which align with the Government’s ambition to level up the housing market and the degree to which projects will support deprived areas of the country. 

While this measure is welcomed, the funding terms could be improved to enable local authorities to forge private sector relationships to access advice and professional services throughout the development process on their land. CBH has worked with a number of authorities with the desire and opportunity to bring forward custom and self-build housing but lack of funding and professional support has delayed progress. Furthermore, with only five weeks in which to make a full application uptake is likely to be reduced.

Part of the Government’s Plan includes a commission by the Prime Minister for Richard Bacon MP to prepare an action plan to develop a strategy for the major scaling of self-commissioned new homes, across all tenures, to boost capacity and overall housing supply. The plan will be published in the Summer with recommendations for Government policy. To date, custom and self-build has remained on the fringes of the housing market and has generally been seen as being out of reach for most homeowners. The report will look at what investment is required to change this and what we can learn from other successful markets. CBH will be engaging closely with this plan to ensure that its conclusions and recommendations are ambitious, practical and will deliver the desired impact so that all future homebuyers can aspire to design and create a home of their own in the future.

Alongside the report on unlocking sector growth, the Government has also committed to reviewing the Right to Build legislation, to ensure councils provide enough land and take proper consideration for these homes when making planning decisions in their area. With industry saying for some time that the law needs changing, we expect Government to look closely at issues like the charging of fees for people to register and how councils can be held to account if they fail to provide enough plots in line with demand. Changes to law could be put forward as early as the autumn, as part of potential new planning reform legislation.

The Government has announced it will continue to fund the Right to Build Task Force, to ensure councils, landowners and industry have access to technical support to bring forward more opportunities for self and custom build housing.

Mario Wolf, Custom Build Homes’ Director of Planning & Strategic Engagement, said:

“The Government’s Action Plan marks a significant milestone in the level of support which the Government is offering to anyone who wants to build or commission their own home.

“The Plan shows that the Government is serious about truly diversifying our housing market. By offering low-cost mortgages akin to Help to Buy, targeted funding for public sector land and commissioning the preparation of a report into the scaling up of self-build and custom build housing we can expect demand and supply for this form of housing to rise to new heights in the very near future. At Custom Build Homes we are ready to play our part.”