Two-thirds of potential self builders do not know that they can borrow to buy land

7 Feb, 2024

According to research from Suffolk Building Society, over two-thirds (69%) of potential self builders do not know that some mortgage lenders will allow them to borrow to purchase land where planning permission has been granted.

Correspondingly, concern over financing a project was the number one barrier for those interested in self build: other concerns were around seeking planning permission and difficulties in finding suitable land.

The Society believes the lack of awareness about being able to borrow for land may discourage people from considering self build. Many incorrectly believe they either need to be sufficiently cash-rich to fund the land themselves before applying for a self build mortgage, or be gifted a plot from land-owning family members.

Suffolk Building Society is aiming to normalise self build and in doing so, wants more people to know that self-build is a viable option for those with modest budgets. Its recent research found that over half (54%) of those who are considering a self build at some point in the future believe that self build is still reserved only for the very wealthy.

Richard Norrington, Chief Executive at Suffolk Building Society said: “Self build television series undoubtedly make for great viewing, but they do set the bar remarkably high. One could easily assume that self build is only for those with unlimited time and deep pockets.

“Self build is considered a fairly standard route to homeownership in countries such as Hungary, France, and Sweden, and with better education and awareness, self build could become more mainstream here in the UK too.”

Numbers considering self build and reasons why

The cost of living crisis has not significantly dampened people’s appetite for self build: a third of people are still considering self build, which is only a small decrease from 35% last time the survey was undertaken in July 2020. The propensity to consider a self build decreases with age: younger people in their 20s (60%) and 30s (56%) are significantly more interested than those in their 50s (16%) and 60s (7%), dispelling the myth that self build is a project for retirement.

Of those considering self build, 31% would prefer to go for a completely new build, 27% said they would opt for a knockdown/rebuild project, and 21% said they would undertake a major renovation to an existing property.

The main motivation cited by over a quarter (28%) was the ability to design the layout of their own home, but this is a significant drop from 51% in 2020. There was a broader range of reasons evident in this year’s research including self building being a more affordable way of creating an ideal home (15%) and having a home in the right location (12%). One in ten (9%) of those considering a self build are doing so to create a home suitable for multiple generations under one roof.

Four in five (83%) want to make eco-friendly decisions about their future property. However, of these, seven in ten would only prioritise this if it was within their budget. Which is reflective of the current economic environment.

Self Build Register awareness

The Self-build and Custom Housebuilding Act 2015 requires each relevant local authority to keep a register of individuals who are seeking to acquire serviced plots of land in the authority’s area for their self build project.

Data published on 31 March 2023, showed a decline in individuals joining the Self Build Registers, which tallies with new research from Suffolk Building Society:

Only one in five potential self builders (21%) are signed up to the Self Build Register and 41% of those considering self build had not even heard of the Self Build Register.

Richard Norrington continued: “The National Custom and Self Build Association campaigned diligently for the Self Build Registers in a bid to facilitate a greater number of self build homes. But so far, this has not been realised. The Registers need promoting alongside resources that help people understand all that a self build entails, as, despite the current economic uncertainty, there is clearly still an appetite for self build.

“As a country, we need to normalise self build, encouraging regular people to build good homes, thus helping to reduce the housing shortage in the process and improving the collective carbon footprint of our housing stock.

“There are undoubtedly more hurdles in this process than in a standard house purchase – particularly at the moment with high labour and material costs. However, being able to design a property that meets your needs both in terms of function and aesthetics is hugely rewarding. We would like more people to know that some lenders are ready and willing to lend on land as well as for the build itself, and secondly, that self build is more accessible than they might have previously thought.”