View more on these topics

Self-build is ready for high street attention

In 2011 Datamonitor predicted that self-build would be the best performer in terms of growth over the next five years, with gross lending rising to a startling £1.9bn by 2015.

The upward trajectory of this market has not gone unnoticed by lenders. Ironically, it is those in the regions that are showing their mettle and reaping the rewards.

Building societies like Melton Mowbray, Bath, Hanley and Saffron offer a growing list of self-builder products at competitive rates.

So what is holding back larger lenders? Risk mitigation continues to be critical but as a demographic group, self-builders tend to have a cast iron profile – mature couples, generally on their third home and with larger than average equity, usually looking for about 70% LTV.

And the nature of self-building means most homes gain 20% to 30% on final valuation, compared with land and building costs.

In the past, lenders may have been concerned about the building process stalling along the way.

Now, indemnity insurance can cover the fees to complete the building of the house, including project management fees, and give lenders administrative support, as well as covering borrowers’ remaining financial input.

This allows the full value of the property to be realised, reducing the risk of loss to both lender and borrower.

In over a dozen years in the self-build industry I have seen only 50 abandoned projects out of 14,000. It is time for high street lenders to embrace this marketplace officially.

Recommended

Injecting QE into house building will work

Those of us in the house building world have been in the doldrums long enough now to grasp the straws of hope when we see them. And this year, thanks to the perfect storm of house building figures being at least 50,000 below target, the general economic malaise and rising unemployment particularly among young people, my long-suffering peers and I have a growing sense that next week’s Budget might just be the one to deliver for the industry.

1

If there is a third way it needs to be clear

Those in the industry who will be tasked with implementing the new rules are now debating the Mortgage Market Review at a granular level. This is raising differing interpretations and concerns over how practical some of the proposals might be.

MPC holds both QE and rates at March meeting

The Bank of England’s Monetary Policy Committee voted to keep interest rates on hold at 0.5% and to maintain the size of the asset purchase programme at its March meeting. The committee boosted the size of its asset purchase programme by £50bn in its February meeting, taking it to a total of £325bn. Vicky Redwood, […]

What attendees thought of the LendInvest Property Development Academy

LendInvest ran its first Property Development Academy in London last month. Attendees from all over the UK gathered to learn how to better equip themselves with the skills they need to grow their property development portfolios. Speakers from CBRE, Gleeds, Arcadis, Gowling, Residential Edge and AZ Urban Studio gave their insights into their respective fields […]

Newsletter

News and expert analysis straight to your inbox

Sign up