Self-built homes to thrive in a post-coronavirus world
Pre-pandemic, around 1 in 7 people were considering building their own home. In fact, the government was beginning to actively encourage self-built dwellings, with a view to increasing the supply of affordable housing in the UK. While up until that point only 8% of houses in the UK were self-built, modern construction methods, relaxed regulations and an increasing number of lenders offering comprehensive mortgage options for self-builders meant that the market was growing all of the time. Before lockdown hit, over 40000 people were registered on the government’s Right to Build Scheme, which allows local authorities to make land available to self-builders, instead of selling it to developers.
Then, early this year, the world got turned upside down. People caught in the middle of building their houses were forced to stop, and those that hadn’t got past the research phase had to put everything on hold. Now that we are emerging from lockdown and trying to find a new normal, which allows us to get on with our lives while minimising the risks to our health, the housing market is a concern. People are reluctant to part with large sums of money in a period of such significant financial uncertainty. Mortgage lenders are unlikely to lend to people with only low deposits, and house prices are dropping, making people more likely to stay where they are if they already own.
What does this mean for the emerging self-build market? Is the government still keen to support self-builders? Are prospective builders still likely to take the risk? Can the self-build movement continue to thrive in this ever-changing world?
The end of a niche
Self-built homes have always been seen as a bit of a niche. Who wants the hard work of building their own house? Who has the time, or the money, to start from scratch?
Well, the growth of high-quality module housing, simplified construction methods and more reliable materials and the severe lack of affordable housing, even for people who can secure a mortgage, mean that self-builds are on the rise. With the increase of helpful companies like Hansen Custom Home Builder, the sector is set to thrive in the new world. Research shows that there has been a 35% rise in self-builds in the 18 months between January 2019 and June 2020. Research over a sustained period, and a period which includes a national lockdown, is surely evidence that this trend is growing.
Greater control
The Covid-19 pandemic has left us all feeling uncertainty. Many sectors, including the housing market, are facing a tough time, and risk is all around us. We are craving control. What greater control could anyone ever have than building their own home? Even without a global pandemic, our lives are ever-changing, they don’t stay the same as they once might have, and our property needs change with them. Self-building gives you a much greater control and the ability to adapt your property to suit your lifestyle. The appeal of self-build is only likely to rise, as the world changes faster than ever.
Securing capital
Securing a mortgage for a self-build property has traditionally been difficult. Many lenders would ask for at least 25% of the total value of the home before they would even consider approving capital. But times are changing. Many lenders today are passionate about self-building, keen to introduce quality homes to boost the market, and unwilling to let building stagnate, which would be bad for everyone. Lenders who are proactively engaging with individuals and companies, to promote the self-build sector and self-build mortgages, with builders’ interests in mind, are becoming far more common.
Flexibility of location
If anything, the coronavirus pandemic has taught us all the value of flexibility. Buy an existing house, and you have no say about where it is. Buy a home that’s being built by a private company or council and while you might be able to choose your tiles, but you won’t get a say in the position of the house. Build it yourself, and you are still tied to opportunities to secure land, but the flexibility of location is far greater.
How many self-build homes are made in the UK?
At the moment, around 13000 self-built homes are completed every year. Government incentives launched in the past five years seeking to increase this number to over 20000.
The UK’s self-build market is still behind many other nations. In Canada, over half of all new homes built are self-builds. In Norway, this figure sits above 60%, France, Sweden, Ireland, and Germany also have a significantly higher rate of self-built homes. But the UK certainly isn’t alone in this. These homes are also relatively rare in Australia, New Zealand, and the Netherlands.
There are many advantages to a self-built home, including greater flexibility and control, and with the housing market turned on its head, the post-coronavirus world could be the perfect time for new self-builders to create their dream homes.