Join the rising of the self-builders

The dream of building your own home is capturing the imagination of growing numbers of people.
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The Independent Culture
The self-build army is on the march. Last week, tens of thousands thronged Alexandra Palace, London, to discuss the fine details of how to build for themselves homes that have nothing to do with the shoebox approach of many property developers.

But as for any home-buyer, finding the right lender is the key to the self-build process. Rosalind Renshaw, editor of Build It magazine, which organised the week-long exhibition, offers some tips:

l Does the loan extend to land or just the build process? "Many lenders are happy to lend on both, but there are some that expect you to buy the land first," Ms Renshaw says. It is also worthwhile checking how much you can get towards the land purchase.

l Do I need to have a buildings guarantee of some sort? There are several, including the standard NHBC guarantee, one offered by Commercial Union or Zurich, plus architects' and surveyors' certificates. "Lenders may differ, however, in what they want. If in doubt, ask."

l How do stage payments work? Building a home can take months and you are expected to pay off the tradespeople working on it in several stages.

"Some lenders pay in four stages. Others will consider up to six or seven stages, which can make it easier to budget your finances. It is very important to find someone who can fit in with your circumstances"

l How much will the lender pay at each stage? Stage payments do not reflect the final value of the house.

Rosalind Renshaw advises: "There are several ways round this. Make sure that the building goes up swiftly and without a hitch. Obtain 30, or even 60 days' grace from your builders' merchant.

"Ensure that you have `retentions' in place, so that the builder will not get the final payment until three months down the line, when any faults can be corrected."

Asking questions of your lender is perfectly acceptable. But what does the lender want to know from you?

Andrew Stinson, manager of the mortgage information unit at Barclays Mortgages, says: "We want to know whether the person has any experience of a project like this.

"Also, have they got a contingency fund in the event of emergencies?

"Are they selling their home and if not, how will they be able to afford two mortgages? Where are they going to live? If it is off-site, what kind of security do they have and are they taking out insurance?"

Barclays will consider most applications, but wants to make sure that the self-builder can ensure a professionally-managed project.

Build It regional exhibitions in 1997: Aberdeen, October 11/12; Exeter, October 25/26; Newark, November 8/9; Colchester, November 22/23. Call 0171 8378727 for details.

The Independent has published a free 27-page Guide to Mortgages, sponsored by Barclays Mortgages. For your copy, call 0800 585691 or fill in the coupon at the bottom of this page.

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