Help to Build Equity Loan Scheme | BuildStore

Help to Build

Did you know that with the help of the government's new Help to Build Equity Loan Scheme, you can now build or commission your own home in England with just a 5% deposit?*

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Mortgages & Finance

Help to Build Equity Loan Scheme

If your homebuilding dreams are on hold because you don't have a large enough deposit, a new government equity loan scheme could be the solution you need.

The government wants more people to build or commission their own homes and has launched the new Help to Build Equity Loan Scheme in England to make it easier to obtain a mortgage for a self or custom build home.

If you are eligible for the scheme, you will only require a 5% deposit* and be able to obtain a 95% self build mortgage. The government will lend you an additional 20% of the costs through this scheme, with the remaining 75% of the home funded by a self build mortgage.

While you will own your home, the government will retain a 20% equity share until you repay the equity loan. You will not pay any interest on the equity loan for the first 5 years. You can repay all or part of your equity loan at any time.

This exciting scheme is open to all customers that meet the eligibility criteria - not just for first time buyers - and it will soon be open for applications.

Register your interest here

*T&CS apply. Please note the scheme does not include funding for the professional fees, such as the costs for architecture, planning or engineering. These will need to be paid for separately.

Register your interest for the scheme and we will get in touch with you to check if you're eligible for the scheme and suitable for a self and custom build mortgage.

The government aims to build 300,000 homes annually by the mid-2020s. It wants to diversify the housing market by providing new options to customers. The Help to Build Equity Loan Scheme is designed to make undertaking a self or custom build project in England attainable for greater numbers of people in England with just a 5% deposit*.

*T&Cs apply. Please note funding for professional fees, such as the costs for architecture, planning or engineering are not included in the scheme. These will have to be funded separately.

The scheme is open to all customers who meet the eligibility criteria and who want to build or commission their own home.

To qualify for the Help to Build Equity Loan you must meet the following criteria:

  • You are aged 18 years or older
  • You have a right to live in England
  • You and anyone else living in the property do not own any other residential property, including buy to lets in the UK or elsewhere in the world
  • You will occupy the property as your only or main residence, immediately following the completion of the build
  • You satisfy Homes England's anti-money laundering requirements
  • You pass the sustainability requirements set by Homes England
  • You can secure a self build mortgage with a registered lender
  • You will engage a conveyancer as soon as your application is approved through to drawdown of the equity loan

With self and custom build, the typical deposit required is 20-25%. With the Help to Build Equity Loan Scheme, you only need to contribute 5% with the government topping up the other 20% in the form of an equity loan. The remaining 75% will take the form of a self build mortgage.

The equity loan is paid to the lender by the government on completion of your build.

The maximum loan amount available under the scheme is £600K, with build costs capped at £400K.

The minimum customer contribution is 5% of the property's initial land and build costs.

The maximum Homes England contribution will be:

  • Outside London area - 20% of the initial land and build costs capped at £120K
  • London area - 40% of the initial land and build costs capped at £240K

The maximum term to drawdown for Help to Build Equity Loan approval is 36 months.

No interest is payable on the equity loan for the first 5 years.

*T&Cs apply. Funding for professional fees, such as the costs for architecture, planning or engineering are not included in the scheme - these have to be funded separately.

The government equity loan is paid to the lender on completion of the property to pay off part of the mortgage. The self build mortgage must switch to a repayment mortgage.

You will not pay any interest on the equity loan for the first 5 years.

From year 6, interest will be charged at a fixed rate of 1.75% per annum. From year 7 onwards, interest will be the previous year's interest increasing by 2% plus CPI.

A management fee of £1 per month is payable for the whole term of the equity loan by direct debit.

No, the scheme is open to anyone who meets the eligibility criteria.

The scheme will run for a period of four years from December 2021. The last permissible timing for draw down will be 2028.

A self and custom build mortgage releases funds in stages as the building project progresses, rather than in one lump sum. Whereas, typically, the deposit required for a self or custom build mortgage is 20-25% with the new Help to Build Equity Loan Scheme, you can undertake a project with just a 5% deposit*.

During the build phase, the mortgage will be on an interest-only basis. This will convert to a repayment mortgage on completion of the build.

A tailored cashflow will be produced on your behalf to ensure sufficient funds are available at each stage of your build.

BuildStore is the UK's leading expert on financing self and custom build homes we have a wide selection of exclusive mortgages for self and custom build, provided by our panel of 14 lenders.

*T&Cs apply. Funding for professional fees, such as the costs for architecture, planning or engineering are not included in the scheme - these have to be funded separately.

Self and custom build is defined under the Self Build and Custom Housebuilding Act 2015.

  • Building or completion must be undertaken by individuals, an association of individuals or persons working with or for individuals or associations of individuals, of houses to be occupied as homes by those individuals.
  • It does not include the building of a house on a plot acquired from a person who builds the house wholly or mainly to plans or specifications decided or offered by that person.
  • The property must be a new build property. Newly constructed and completed dwellings, including flats created by utilising the airspace above an existing property (provided it has its own address), converted commercial premises and any conversions, which have not been used as residential dwellings, immediately before conversion are eligible; houses split into flats are not included in the definition.
  • Any property (a house or building), which has been previously occupied, either by an owner-occupier, licensee or a tenant, which is to be demolished in full in order to build a new self and custom build property may be eligible for approval.
  • Shell properties, designed to allow customisation of internal walls, completion of second fix and final fit-out are permissible.
  • Leasehold houses are not eligible for the scheme, except in the exceptional circumstances permitted under the Help to Buy scheme. For leasehold flats, ground rent must not exceed a peppercorn per annum.
  • Self build warranties are required and need to be in place before completion.