For many people, the idea of building their own home has long been seen as a luxury—complex, expensive, and out of reach for all but the wealthiest. However, the UK government’s Help to Build scheme is seeking to change that, offering financial support to those who want to design and construct their own homes rather than buy on the open market.¹

Alongside growing interest in custom build mortgages, this initiative is seeking to make self-build and custom-build homes a realistic option for a wider range of buyers—including families looking for more space, downsizers wanting a tailored property, and individuals interested in energy-efficient living.

How Does the Help to Build Scheme Work?

The Help to Build scheme is an equity loan provided by the government to make self and custom-build homes more financially accessible. Similar to the former Help to Buy scheme, it allows borrowers to secure funding with a low deposit while using the government-backed loan to cover a portion of the costs.¹

Key details of the scheme include¹:

• Borrowers can apply for an equity loan between 5% and 20% of the total estimated cost of land and construction (or up to 40% in London).
• The loan is interest-free for the first five years, after which interest is charged at 1.75%, rising annually with CPI plus 2%.
• The maximum eligible project cost is £600,000, including a cap of £400,000 on construction costs.
• A minimum deposit of 5% is required.
• Borrowers must secure a self-build mortgage to cover the remaining costs.
• The property must be used as the applicant’s primary residence and cannot be a second home or buy-to-let investment.

Once the home is built, the self-build mortgage is converted into a standard residential mortgage, and borrowers start repaying the equity loan.

Why Custom Build Mortgages Are Growing in Popularity

One of the biggest hurdles for those interested in self-build projects is likely to be securing finance. Traditional mortgages are designed for ready-built homes, but custom build mortgages are tailored to those constructing their own property.

Unlike standard mortgages, these loans are released in stages rather than as a lump sum. Lenders typically release funds at key points in the construction process—such as land purchase, laying foundations, and completing structural work—to ensure that the build progresses as planned².

There are two main types²:

• Arrears Stage Payment Mortgages – Funds are released after each construction phase is completed and inspected.
• Advance Stage Payment Mortgages – Funds are released before each phase, helping those who lack the upfront capital needed to begin each stage of work.

Lenders require a detailed build plan, planning permission, and professional cost estimates before approving finance. Since it’s a specialist loan, there are fewer providers to choose from than for standard mortgages², and rates may not be as comparable to standard mortgages seen on the high street.

The Benefits of Self-Build Homes

Choosing to build rather than buy offers several advantages:

• A Home Designed to Your Needs – Buyers are not restricted by what is available on the market.
• Cost Efficiency – Self-builders may be able to get more for their money compared to purchasing from a developer, if carefully budgeted from the outset of the project.
• Energy Efficiency – New homes can be designed to higher sustainability standards, with solar panels, heat pumps, and modern insulation helping to lower long-term energy bills.

The Challenges of Self-Building

Despite the advantages, building a home is not without its hurdles. Key challenges can include:

• Finding Land – Suitable plots can be difficult to source, and competition is high.
• Navigating Planning Permission – The approval process can be complex and time-consuming.
• Managing Costs and Timelines – Unexpected costs and delays are common, making financial planning crucial.

Is Help to Build the Right Option?

The Help to Build scheme, combined with increasing availability of custom build mortgages, is making self and custom-build homes more accessible to a wider range of buyers.

For those willing to take on the challenge, self-building offers the opportunity to create a bespoke home, often at a better price than buying from a developer. While it requires careful financial planning and patience, government support is making this route more achievable than ever before.

Would-be self-builders should ensure they understand the process, costs, and financing options before embarking on their project—but for many, this could be the key to owning a truly tailored home.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

Sources

1. Help to Build (2025) Customers Guide to Help to Build: Equity Loan. Available at: https://assets.publishing.service.gov.uk/media/632c3c598fa8f51d2669fa12/Help_to_Build_customer_guide_220922.pdf [Accessed 20^th Feb 2025]
2. ABC+ Warranty & Architects Certificate (2025) How do stage payments work for self-builds?. Available at: https://www.architectscertificate.co.uk/news/how-do-stage-payments-work-for-self-builds/ [Accessed 20^th Feb 2025]

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