Ricky Okey, general manager, Charcol. The self-build market, although considered a specialist market, is actually popular with pretty much anybody. There are no typical self-build lenders or specialists but some stand out from the crowd.
In the selfbuild specialist category BuildStore is in a league of its own and has pretty much cornered the market. Its overall proposition is designed to make the process as painless as possible and it provides the expertise to help people with all aspects of their self-build. Over the years it has built connections with specialist land agents, planners, architects, solicitors and insurers that enables it to offer discounted packages. It has also built up a pretty comprehensive list of lenders on its panel.
A range of deals are available through BuildStore's accelerator mortgage. The key aspect of this scheme – and what makes it different from other self-build schemes – is that it provides self-builders with cashflow during their build because cash is released at the beginning of each stage of the build process. Until this scheme was launched all self-build mortgages released money at the end of each stage of the build and usually after a re-inspection had been carried out. This was of course hardly ideal, especially to those self-builders who did not have the cash available to complete the build stage.
One lender who is not on BuildStore's panel but is worth a mention is Norwich & Peterborough. It has been in the self-build market for a number of years and is proficient with the process. Although a valuation will have to be carried out at each stage before further funds are released it offers a choice of any of its mortgage products on a self-build basis and will typically lend 85% of the purchase price and up to 95% the value of the property after completion (subject to status).
Borrowing for a self-build project is becoming easier which makes it all the more important to ensure borrowers can afford such a project before they enter into a commitment.
It's a lot harder to get out further down the line and it is our job to ensure borrowers are aware of the risks involved as well as the rewards.