BuildLoan has introduced a new ‘Help to Build’ mortgage to the new build housing market.

Created in partnership with Darlington Building Society and Homes England, BuildLoan said the product will help people “live in brand new homes they have designed themselves”.

The product works in a similar way to the Help to Buy Equity Loan Scheme, which is due to end in March 2023, but will be for self and custom builders. Under the scheme, the maximum land and build costs can be up to £600,000 and borrowers will need just a 5% deposit. The other 95% is via a Help to Build Mortgage, which can only be provided by lenders approved by Homes England, which is to run the scheme.

There are two products in the first Help to Build Mortgage range, both three-year discounted rates at either 5.39% or 5.99%.

During the build, borrowers would pay on an interest-only basis and then once the build is complete, the Help to Build Mortgage switches to a standard repayment mortgage which must be in place for the duration of the equity loan.

Similar to many of BuildLoan’s products, the Help to Build Mortgage offers advance stage payments which means borrowers receive funds before each stage of their project.

BuildLoan CEO, Raymond Connor, commented: “I have waited a long time to see this scheme come to fruition and it will create a whole swathe of new build housing opportunities. People can build, or have built for them to their specification, the types of home they want to live in.

“Help to Build is going to significantly boost the custom build sector, and property developers already have land earmarked for this purpose. Homes England has built up a large database of people registering their interest and our own database consists of approaching near to 1,000 people who want to use the scheme.”

“We have worked extremely hard to develop the Help to Build Mortgage and more lenders will be launching their products over the next six months in partnership with us.”

Darlington Building Society chief executive, Andrew Craddock, added: “This is an exciting time to be a self and custom build lender and we are thrilled to be the first to launch our Help to Build Mortgage with BuildLoan. Help to Build opens up the housing market and enables more people to design and build their dream home, starting with a 5% deposit.”

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