Property: Building a home? First find the finance

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Indy Lifestyle Online
Ken Shuttleworth is not your average self-builder. He is an architect at the London firm Foster & Partners and his work has taken him abroad, as well as around the UK, so he does not need advice on many aspects of his home's design. But the basic principles he has followed in constructing his dream home in Wiltshire are similar to those of any self-builder. Mr Shuttleworth is building a thoroughly modern-looking property, consisting of two linked, crescent-shaped wings.

Quite apart from the hard graft involved in convincing planners that properties like his should be allowed, there is always the issue of how to arrange a mortgage to finance the deal. In Mr Shuttleworth's case, this was not much of a problem. He already had a loan with Barclays Mortgages, taken out when buying his first home in Belsize Park, north-west London.

It was natural for him to go back to the same lender to see whether it would agree to finance his self-build project: "I went to [Barclays Mortgages] with my plans, which involved completely demolishing an existing property before beginning work on the new one.

"I was delighted that they were interested and enthusiastic, as well as having the high level of specialist expertise this project required."

It helps to know the borrower. Kevin Furlong, the adviser who helped process the application, says: "In a special case like this, it makes all the difference when we know the customer's personal profile."

More than 25 lenders, including most of the UK's biggest names, are now prepared to offer mortgages to self-builders. Typically, the process involves the applicant doing a lot of homework beforehand, calculating the total building cost, plus the price of the land.

Although some lenders are prepared to lend a proportion of their money for land purchase, others will expect that aspect to be paid for by the self-builder.

Loans are then offered in several stages, typically four or five, which cover the foundations, the ground floor and first floor plus roof. A proportion of the funds may be kept back until the fully completed property is revalued. The amount lent will then be based on the final value of the home.

Nic Cicutti

Details of self-build mortgages are available from `Your Mortgage' and `What Mortgage' magazines, together with `Build It' and `Individual Homes', both specialist self-build magazines. All are available from newsagents.

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