Pitfalls on the path to a dream home

Kevin Paterson, managing director, Park Row Independent Mortgages I would suggest exercising the same caution with self-build as with the commercial, equity release and buy-to-let markets. It is different in many ways to standard prime residential and if you are not familiar with the market you could create more problems for the client than you solve. And unlike commercial and buy-to-let, self-build is covered under the MCCB so you are opening yourself up to potential comeback as well.

Typically, the client will be buying a plot with outline or detailed planning permission but the pitfalls are numerous. There are only a handful of lenders in this market and you need to know how all the deals work before offering advice. For example, your client could save up to 25% on the cost of buying readymade but a minor miscalculation or error could easily swallow this profit. Your client needs to be aware that this is a long-term commitment. They could be living in a caravan for months or worse, carrying two mortgages.

The client also needs to budget carefully, not just for costs they had not taken into account but also for costs incurred that are outside of their control – like the concrete delivery bloke being off sick for example.

Your client should also check with the local authority before embarking on self-build to ensure that there are no particular planning restrictions that could ruin their dream of a perfect home.