Self-build gets government aid
Published: 28 September, 2012
LONDON: Merchants, the main material suppliers for self-builders, will the welcome government financial aid to the sector. As announced in last autumn's Housing Strategy, the government is making available £30m funding to support new self-build schemes.
This is to provide short-term loan finance to developers and community groups working to bring self-build developments to the market.
"The commercial lending market has historically regarded self-build schemes as high risk, and so finance has been hard to raise," says Christine de Ferrars Green of legal firm Mills & Reeve.
"This Government loan fund is intended to help prove there is a viable and sustainable business model which can be adopted in the future.
"The aim of the fund is to stimulate the growth of self-build housing projects. It is focused on multi-unit group schemes, and loans will be available to organisations registered with the Homes and Communities Agency, to fund 'qualifying expenditure. This includes costs of land purchase, site preparation and infrastructure, planning obligations, construction costs and professional fees.
"Commercial interest rates will apply and loans will be limited to 75% of eligible costs, capped at £3m for schemes of five or more houses. Priority will be given where at least outlining planning consent has been granted. The loan fund will be open until 31 March 2015."