Showcased at the self-build and renovation conference in Swindon on 27 November, the scheme aims to tackle funding difficulties when buying a property to renovate, or indeed embarking upon a self-build.
With an advance stage payment mortgage, the cost of the build and land is worked out and split into the various stages. Then the money (up to 95 per cent of the cost of land and build) is released at the start of each stage giving the self builder positive cash flow.
This makes the build process easier and quicker than with an arrears stage payment mortgage, as the self-builder has money to pay for labour and materials as they fall due and there is no need for interim valuations as lending is based on cost and not value. It also makes it easier for the self-builder to stay in their current house while the build progresses.
Julie Johnston, head of mortgage products at Mortgage Intelligence commented: “The self-build home and renovation market in the UK has grown rapidly in recent years and is set to grow even more. About 20,000 people build or renovate their own homes each year making them Britain's biggest house builder well ahead of the major developers.
"Therefore, it is not surprising that our members are keen to find out more about providing their clients with the best possible funding solution and the advantages the advanced stage payment option offers over the arrears stage payment route”.
John Hay, head of financial services marketing and product development at BuildStore added: “While BuildLoan is the scheme of choice of many intermediaries whose clients are self building, the high lending percentages and release of money in advance during the project can be of equal help to people who want to buy a house to renovate or extend or who want to add an extension to the house they are currently living in.”
