Help to Build scheme

Last updated: May 2024 | 3 min read

The UK government's initiative of Help to Build is an equity loan designed specifically for individuals interested in self-building or customising their homes. This scheme aims to provide financial support to those aspiring to construct their dream homes according to their unique preferences and needs.

Help to Build is a pathway for those commencing their first home-building adventure. This loan is restricted in its usage; it cannot be utilised for constructing multiple homes, renovating or enhancing your existing residence, or building a secondary property. Read on to know more about this exciting option for those who want to build a new home.

What is Help to Build scheme?

The Help to Build scheme is a government initiative in the UK. It offers financial support to individuals aiming to build their own homes.

Unlike traditional home buying, this scheme provides an equity loan. This loan assists with funding the land purchase and construction costs.

Under the Help to Build equity loan schemeself-building is made more accessible, addressing the housing shortage and diversifying the housing market.

You will be required to make a 5% deposit and secure a self-build mortgage. The government supplements this with an equity loan of up to 20%, or up to 40% in London.

The equity loan remains interest-free for the initial five years, with the condition that the total project expenditure does not exceed £600,000.

Origins and purpose: initiated by the UK government, the Help to Build scheme arose from a need to expand the housing market and encourage personalisation in home building.

Its purpose extends beyond just financial aid. It seeks to inspire innovation in housing design and use of space, particularly focusing on efficiency and environmental sustainability.

The scheme also supports aspiring self-builders who might otherwise find the process financially prohibitive.

Key features: the Help to Build scheme is a UK government initiative designed to support individuals who aspire to construct their own homes. It revolves around a government equity loan, similar to the Help to Buy equity loan, but specifically tailored for self and custom builds.

Under this scheme, you can apply for a loan to cover a portion of your project costs, significantly reducing the upfront financial burden.

One standout feature is its inclusivity; it's open to both first-time buyers and existing homeowners.

Notably, the scheme is not confined to traditional residential properties but also extends to custom builds, reflecting a broader approach to housing solutions.

Its flexibility allows for the personalisation of design and internal layout, catering to unique preferences and needs.

Differences from other housing schemes

Distinct from other housing schemes such as Help to Buy equity loan scheme, the Help to Build scheme zeroes in on the self-build market. Unlike standard home-buying methods, this scheme addresses the specific challenges and expenses involved in building a home from scratch.

The financial structure is also different. The government equity loan for Help to Build is specifically structured for the specific demands of self-building, differing in terms of release of funds and repayment conditions.

A decisive difference lies in its impact on the self-build sector. The scheme aims to make self-building more accessible, thereby diversifying the housing market beyond conventional new-build homes.

In contrast to schemes focusing on existing property purchases or new, developer-led homes, Help to Build encourages individual participation in housing design and construction. This personalised approach can revitalise unused space in urban areas, contributing to more innovative residential property development. Also, have a look at government schemes for first-time homebuyers.

Eligibility for the Help to Build scheme

To participate, applicants must meet specific criteria.

  • This scheme is open to UK residents over the age of 18 who wish to construct their own home.

  • The property in question must be the only home you own and primarily for your use, not for rental or investment purposes.

  • Eligibility extends to both first-time buyers and existing homeowners who seek to build their new residence.

  • For financing, the scheme necessitates that you secure a self-build mortgage from a lender who participates in the programme. This ensures that the financial aspect of your self-build project is supported and closely monitored.

Understanding your eligibility: understanding whether you qualify for the Help to Build scheme involves a closer look at your circumstances and the nature of your proposed building project. The total estimated cost of your project must stay within the set limits of the scheme. This cost includes not just the building costs but also the estimated land cost, and any related expenses such as securing outline planning permission.

The scheme particularly aims at assisting those who might struggle to afford the high upfront costs associated with self-building. Therefore, factors like your financial stability, credit history, and the projected feasibility of your project play important roles in determining eligibility.

Local authorities may have additional requirements or considerations, reflecting regional housing needs or conditions.

Step by step application guide

Applying for the Help to Build scheme involves a series of steps designed to assess your project's feasibility and your financial capability.

  1. Start by registering your interest on the Homes England website. Homes England oversees this government-backed loan scheme. Once you express interest, you'll receive detailed information and a list of required steps.

  2. The next phase involves seeking pre-approval. This stage is for ensuring your project aligns with the scheme's guidelines and goals. You need to submit preliminary project details including the estimated costs, your planned location, and basic design ideas. During this phase, the Help to Build task force might request additional information or clarification.

  3. Proof of land ownership or a pending purchase is another requirement. If you're yet to secure a plot, a letter of intent or a reservation agreement can suffice for the initial stages of the application.

  4. After preliminary approval, it’s time to focus on the finer details. Start with a comprehensive budget, outlining all expected expenses. This budget should include costs for materials, labour, and any professional services required for your self-build project. Give detailed plans and exact budgets.

  5. Next, proof of your funding contributions will be required. This information helps in determining the equity loan amount you're eligible for. Provide evidence of your finances. This proof might include savings account statements or a mortgage in principle from a registered lender.

  6. You'll also need detailed architectural plans. These plans should comply with current building regulations and include specifications on sustainability and energy efficiency, reflecting the scheme's focus on eco-friendly building practices. Securing planning permission is a must before final approval. While this can be a lengthy process, it ensures your project complies with local development plans and environmental regulations.

  7. Your application then undergoes a final review. With all approvals in place, you’re set to take your self-build dream forward. You can now start looking for a registered lender.

Choosing a self-build mortgage with the Help to Build scheme

Comparing mortgage options

Self-build mortgages differ significantly from standard mortgages. You receive funds in stages, not as a single amount.

You should choose a mortgage that fits your project's nature and timeline.

Most lenders release money at key construction milestones. For instance, land purchase, foundation laying, and property completion are typical stages.

The payment method, either in advance or arrears, impacts your cash flow.

Advance stage payments provide funds at each phase's start, easing cash flow concerns. Not all offer this option, so you might want to find a mortgage lender who does.

Researching various self-build mortgages under the Help to Build scheme requires attention to interest rates, fees, and repayment terms.

Darlington Building Society and similar institutions offer specific self-build products; compare these carefully.

Interest rates on self-build mortgages are usually higher than standard mortgages. Factor this into your budgeting. Fees can also add up. Valuation fees, arrangement fees, and exit fees vary between lenders. Check the fine print for any additional costs.

Think about your long-term financial stability. After completing your build, some mortgages automatically switch to a standard repayment mortgage. Others might require you to switch lenders or renegotiate terms. Plan ahead for these future financial shifts.

Working with lenders registered for Help to Build

You must choose a lender registered with the Help to Build scheme. These lenders understand the scheme's nuances and can provide tailored advice.

Begin conversations with lenders early. They can offer insights into how much you can borrow and the likely cost implications of your project.

Lenders will assess your creditworthiness, income stability, and the project's feasibility. Read our article on how to improve your credit score.

Your choice of contractor and the detailed build plans can influence a lender's decision. They look for reassurance that the project is manageable and within a realistic budget. A well-thought-out, detailed project plan can improve your chances of mortgage approval.

It's also important to consider the lender's experience in the self-build market. Lenders with a track record in this area are more likely to understand the challenges and timelines of building your own home.

They can offer more flexible payment options and advice on managing the build's financial aspects. The lender is your partner throughout this journey. Regular communication and transparency about your project's progress can help maintain a positive relationship with your lender.


What is the difference between the Help to Build scheme and other equity loan schemes?

The Help to Build scheme specifically targets self and custom builders, offering an equity loan based on the project cost. This contrasts with other equity loan schemes primarily focused on purchasing existing homes or newly built properties.

Can I use the scheme for renovating an existing building?

No, the Help to Build scheme is intended for new self-build or custom build projects. It does not cover renovations or extensions of existing buildings.

How does the consumer price index affect my equity loan?

The amount you'll repay on your Help to Build equity loan is linked to the market value of your home, which can be influenced by the Consumer Price Index. If the value of your home increases, so does the amount you owe.

What happens if I sell my home?

Upon selling your home, you're required to repay the Help to Build equity loan, calculated as a percentage of the sale price, equivalent to the percentage of the original loan to the project cost.

Are there restrictions on the type of property I can build?

The Help to Build scheme is flexible but requires local authorities' approval, and your project should align with certain criteria like affordability and environmental impact.

Further reading and resources

For a deeper understanding of the Help to Build scheme, explore guides from the National Custom and Self Build Association. Publications by Housing Secretary also offer valuable insights.

On this journey, it would be helpful for you to know the roles of the following professionals:

  • Mortgage lenders: specialising in self-build mortgages knowledgeable about the scheme.

  • Local planning authorities: for guidance on planning permissions and regulations.

  • Building associations: provide practical advice and networking opportunities.

  • Builders and architects: essential for practical advice and achieving your design and budget goals.

Leverage these resources for a smoother self-build experience.

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