Help to Build scheme asks Brits to tackle the housing crisis – but ‘won’t reach those in need’

The government has struggled to build the homes England needs to end its housing crisis – so now ministers have announced the Help to Build scheme to get Brits to building themselves.

The £150million scheme launches on Monday, promising to help thousands of people in England to build their own custom-designed homes without a “Grand Designs size budget”. Home builders will be backed with a five per cent deposit towards land and building costs for the equity scheme.

“I think it’s net good – anything that reduces our dependence on the volume housebuilders for housing supply is to be welcomed,” said Rose Grayston, a housing policy expert.

“However, Help to Build is clearly not going to reach those in greatest housing need, given the amounts of money involved and the levels of income households will need to have to cover their finance costs.

“It’s disappointing that we’ve seen no action from government to support self build/custom build housing for social rented and other types of affordable rented housing, particularly as other countries have pioneered this.”

Ministers argue that people have been long put off from building their own home due to large mortgage costs and steep start-up cash demands with the average self-build deposit covering 25 per cent of land and building costs.

They say the new Help to Build scheme will support families and young people into homeownership and estimate the UK’s self-build sector could deliver 30,000 to 40,000 new homes a year in their response to MP Richard Bacon’s independent review into self-builds.

The new scheme is part of a three-pronged approach to helping first-time buyers into home ownership alongside Help to Buy and the much-criticised Right to Buy. Ministers claim those two schemes have helped more than 765,000 people to buy their own homes in the last decade and will contribute to a total of one million homes built by the end of parliament. Help to Buy is set to close in October, while Right to Buy has been blamed for gutting of the country’s social housing stock since it was introduced by Margaret Thatcher.

“Through the Help to Build scheme we will help thousands more people onto the property ladder by giving them the opportunity to build homes that are perfectly tailored to their needs and in the communities they want to live in,” said housing minister Stuart Andrew.

“This innovative scheme will build on our work to break down the barriers to homeownership, as well as creating new jobs, supporting the construction industry and kickstarting a self and custom build revolution.”

Help to Build will allow applicants to borrow between 5 per cent and 20 per cent of the costs of building material and land across England, rising up to 40 per cent in London. Total build costs are capped at £600,000 or £400,000 if the land is already owned.

The finished property must be the applicants’ primary home to qualify.

Alongside the launch of the scheme, Homes England will set up a specialist unit to bring forward more plots for regeneration projects across England.

South Norfolk MP Bacon added: “Making it easier for people to build or commission their own homes helps to promote a more diverse housing market with more real choice and control for consumers.”

Andrew Craddock, chief executive of Darlington Building Society – the first lender to support the scheme – said Help to Build could help with the country’s green ambitions.

“With 40 per cent of UK emissions coming from homes in the UK, self-build projects can also offer a greener alternative. People can add more environmentally conscious measures – both during the build stage and to last throughout the lifespan of the finished property,” said Craddock.

“Help to Build also helps to diversify the UK’s housing stock and alleviate the shortfall in available homes, and I for one am looking forward to seeing the new homes it creates.”

Help to Build comes as the government is struggling to reach its 2019 manifesto commitment to build 300,000 homes every year to tackle the housing crisis.

Levelling Up and Housing secretary Michael Gove has said in recent weeks he is “bound by criteria beyond arithmetic” when it comes to the target.

So far the government is yet to get anywhere near the target.

In 2020/21 there were an additional 216,000 new dwellings, down from 243,000 in 2019/20 largely down to the impact of the pandemic.

Housing charities have also called for the amount of social rent homes – the most affordable tenure of housing – to be built to increase to give people on lower incomes the chance to find an affordable place to live at a time when rents and house prices are soaring.

Official statistics released this week showed the number of social rent homes started in the 12 months up to March 2022 were down a quarter in a year with Homes England backed schemes starting just under 2,000 homes.

But government housing policy remains focused on home ownership – something that Michael Gove admitted to The Sunday Times last month played a role in recent Conservative defeats in the polls.

Since then, Boris Johnson has announced a new focus on Right to Buy, offering benefits claimants the chance to use welfare payments to buy their homes, although the plan has been described as “baffling and unworkable” by housing charities.