Raising finance for your self-build

There are different types of loans available, depending on whether you are self-building or renovating, so let’s break them down.

Self build mortgage

Assuming you already own a plot and have planning permission, your next step is a specific self-build home loan. These are more rare and harder to get than traditional mortgages, so you may have to shop around.

You will need to have detailed plans, permissions and budgets in place to show the lender, as well as risk assessments and contingency plans. They will usually only lend if a professional architect or consultant is heading up the build. You may also need to show that you have enough funds to have somewhere else to live in the meantime, even if it’s in a caravan on site. And last, but not least, you will need a good deposit saved up- Money Supermarket suggests at least 25 per cent.

The funds for this type of loan are generally released in instalments, as the building stages are completed. Some loan companies will release funds in advance of each building stage, but others will reimburse you after you fork out for the work first. Your lender may keep a percentage of your loan total until the house is signed off as complete.

According to Extension Architecture, here are estimated ballpark cost ranges for an average new build in 2023:

·       Two bedroom house: £185k to £280k

·       Three bedroom house: £240k to £365k

·       Four bedroom house: £295k to £440k

·       Five bedroom house: £320k to £480K

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Abode Magazine 2023