Self-build and property development mortgages

by Aaron Strutt

Jul 20 2010

Trinity Financial recently contributed to a story in the Financial Times about self-build mortgages.   Our expert mortgage brokers have contacts with a range of lenders not available on the high-street and we can help to secure the finance you require.

Call Trinity Financial today on 020 7016 0790.

Fuly story below: By Tanya Powley Published: May 20 2011 18:53 | Last updated: May 20 2011 18:53

Wealthy homebuyers are increasingly opting to build their own dream homes, as good quality family houses remain scarce at the top end of the property market. In recent months, buying agents have reported a rise in the number of clients looking to buy plots of land with planning permission for large family houses. Adrian Wright of Private Property Search (PPS) says his company has recently acquired four sites in Hampshire and Dorset on behalf of clients, at prices varying from £1m to £5m. This trend towards self-build has been reflected in stronger demand for self-build mortgages since the beginning  of the year. According to Buildstore, a company that sources building plots and self-build loans, there was a 30 per cent increase in the number of self-build mortgage offers in the first quarter of 2011, compared with the same period last year. Government policy is expected to drive further growth in coming years.

Earlier this month, Grant Shapps, the housing minister, announced that he wanted self-build to become a mainstream housing option - and said the government would look to make more publicly-owned land available for use by “ordinary people to build their own homes”. The appeal of self-build has also been boosted by the prospect of paying no VAT - at 20 per cent - on building materials, as well as savings on stamp duty. Self-build is particularly popular with wealthy buyers looking to build family homes in the country. PPS says it has bought a 150 acre plot in Hampshire with planning permission for a 15,000 sq ft country house - including an indoor swimming pool, stables and outbuildings - for less than the guide price of £5m. It has also secured a 55 acre plot with planning permission for a 10,000 sq ft house, plus 6,000 sq ft of ancillary buildings, for just over £2m. Simon Barnes, a London-based buying agent, says it is crucial to employ professionals. “You really need to know what you are doing and have a good team in place,” he explains. Self-build loans are more expensive than traditional mortgages. N&P charges 5.3 per cent, with a £995 fee. However, self-builders seeking larger loans could try a private bank. According to Aaron Strutt of broker Trinity Financial, they can access rates as low as 3 per cent over bank base rate.

July 20, 2010