Self build will boom into fastest growing market

Speaking at today’s Council of Mortgage Lenders’ future housing conference in London Connor said that more lenders should look at providing funding for self builders.

He said: “The self build sector is prime lending. The end loan to value of a self build is 58%. The risk profile of a self builder is very strong with a very low incidence of arrears, the gross income of a self builder is on average £50,000 or more and they’re typically fourth or fifth time movers so they understand the market and they will build houses that will suit their needs.

“At the end of a self build, we will also provide avenue for lenders to take up traditional lending in the form of remortgaging following a self build.”

One of the barriers to self build was not a lack of demand he said. The demand for self build hasn’t dropped since 2007 and has in fact increased; the only thing preventing it from growing is the lack of funding.

He added: “The support from lenders is poor other than in the mutual sector. The mutual sector have really grasped the self build sector, they get it. They’re really getting back to base roots in building houses like they did years ago. We are however suffering from a lack of finance.

“Government has become a champion of the self build market hailing it as Localism’s solution to the housing crisis. Government has moved in certain areas to help the self build sector. We’re already in meetings with the Housing Communities Agency over land being released and the Local Authorities are releasing land up and down the country.”

Connor believes that self build was a misnomer and said the function of a self builder was not to build the houses themselves but rather their most important function was to oversee and manage the project from start to finish.

In many cases project management is being handed over to specialists, leaving the self builder with virtually no active role whatsoever other than providing funds.