Self build to 'avoid negative equity'

Deciding to build your own home could help you avoid the trap of negative equity, it has been suggested.

Laura Howard of the Times said that people who have chosen to build the homes they live in are "better equipped" to fight the dreaded negative equity situation than those that have not.

Ray Boulger, technical manager at broker John Charcol, told the newspaper: "Self build is one of the sectors that have been affected least by the downturn as the very nature of the beast addresses negative equity issues from the start."

At the end of a project, self builders typically have a home that is worth 35 per cent more than the total cost of the land and the building process.

The Bank of England recently forecast that 1.2 million homeowners face the prospect of negative equity as a result of the property slump.