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Help to Build: the government's self-build home scheme explained

Not all Grand Designs have to blow an average homebuyer's budget. The Help to Build scheme aims to make it more affordable and easier to get a mortgage if you’re building a home yourself.

Guest Author
Words by: Nicky Burridge

Contributing Editor

Fancy building your own home but don’t have a big deposit? 

The government’s new Help to Build Equity Loan scheme could be for you.

Here’s the lowdown on how it works.

1. What is Help to Build?

The Help to Build Equity Loan Scheme is a new government initiative for people who want to build their own home.

It helps people with only a 5% deposit get a cheaper mortgage by topping up their deposit with a loan that is interest-free for five years.

The government has earmarked £150m for the scheme over the next four years.

The estimated costs cannot be more than: 

  • £600,000 if you’re buying the land and building your home  (the build cannot be more than £400,000)

  • £400,000 if you’re building on land you already own

You can apply for the Help to Build equity loan to do any of the following:

  • buy land and build a new home on it

  • build an ‘airspace development’ flat (airspace developments are new properties built in unused space above an existing building)

  • convert a commercial property into a residential property 

  • build a ‘custom shell home’ (where a professional builds the structure, but you’re responsible for the design and layout inside)

  • demolish an existing property and replace it with a new home

You cannot use the loan to build:

  • more than one home

  • upgrades to your home

  • a second home - you must live in the new home and sell any other residential property you own within 12 months of the date the new home is built

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2. How does Help to Build make it cheaper to self-build?

People who want to self-build a property will put down a 5% deposit with a lender offering self-build mortgages.

Your mortgage does not have to be approved at the time you apply, but to start your project and get an equity loan, you’ll need a mortgage offer from a lender.

You should talk to a lender to check you can get the right mortgage.

Your mortgage must be:

  • a self-build mortgage (this is a mortgage you get when building a home yourself)

  • from a lender that’s registered with Help to Build (check their website or ask them)

The government then tops this deposit up with an equity loan of up to 20% of the land and building costs of the home, rising to 40% in London. 

This means, instead of borrowing 95% of the home’s value, you are only borrowing 75% from their mortgage lender.

Interest rates on mortgages for people borrowing a lower chunk of their home’s value are cheaper than those for a 95% mortgage. 

This is because there is less risk that the lender will lose money if the borrower defaults on the mortgage.

As a result, the equity loan helps to make self-build mortgages more affordable for people with small deposits.

3. How does the Help to Build equity loan work? 

The Help to Build loan from the government is interest-free for the first five years.

After this, interest is charged at a rate of 1.75% in the first year. 

The interest will increase in April each year by the rate of the Consumer Prices Index, plus 2%.

You will also pay a £1 a month management fee for the lifetime of the equity loan.

You don’t have to repay the loan until the end of the term, which is usually 25 years. But, you will need to repay it earlier if you sell your home or repay the mortgage.

The amount you owe the government will move up or down in line with changes to your home’s value.

For example, if your property’s value increases by 10%, so will the amount you need to repay.

If the value of your home falls, so will the amount of money you owe to the government for the equity loan.

You can repay the equity loan early if you want to. 

4. Can anyone apply for Help to Build?

Help to Build is only available to people building a property in England.

There isn't a government-backed loan to help build homes in Northern Ireland. Find out more about raising money to build your own home in Northern Ireland.

You can be either a first-time buyer or an existing homeowner, but the property you are planning to build must be your only home.

You must also be able to qualify for a self-build mortgage from a bank or building society that is part of the scheme.

So, if you’re a property developer or want to build a home to rent out, you won’t qualify for Help to Build.

5. How do I apply for Help to Build?

The first stage is to secure a self-build mortgage either with a lender that is registered for Help to Build or through a broker.

Most banks need you to have outline planning permission where you want to build before they will approve a mortgage. 

Once the mortgage is agreed, you can apply for Help to Build through Homes England.

If you are successful, you will receive an equity loan offer based on the estimated cost of buying a plot of land and building your home.

From this point, you have three years in which to buy land and build the property.

Homes England will pay the equity loan to the lender when the property is complete.

6. Can I use Help to Build on any value home?

The Help to Build scheme does have some financial restrictions.

The total cost of your self-build project cannot be more than £600,000. 

This includes the cost of buying the land on which you want to build your home. 

The building costs themselves cannot be more than £400,000.

You must also pay for any professional costs separately. For example, an architect’s fees or engineer’s report.

Find out more about the Help to Build equity loan at

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