Building Plot Shop.
The government has launched its first ever building ‘plot shop’.
The announcement yesterday by Housing and Planning Minister, Alok Sharma, will be for building plots in an area near Bicester, Oxfordshire called Graven Hill.
The ‘shop’ is literally on a high street will sell around 1,900 plots of land to people who wish to build their own homes, either via their own ‘custom’ designs or via pre-approved ‘off the shelf’ designs (you may have the likes from Scandinavia and Germany on house building television programmes).
This is an exciting development for the property market given housing shortages. It is usually much cheaper to build your own than it is to buy an existing property or even on a new build site, clearly the property building firms are making the money.
That said, raising the finance is different. Not all mortgage lenders offer self-build mortgages and when they do, they release funds in stages after works are complete, e.g. stage 1 when the groundworks are in, stage 2 loan when ground floor/shell or roof is up, stage 3 when internal works are complete.
There is even a government Home Building Fund, launched in October 2016, targeting £1 billion in short term loan finance to support small and medium-sized enterprise builders, innovation and custom builds.
In summary, you need to have a some capital ‘behind you’ to fund initial development before monies are released to you via mortgage. If you have, then this is an excellent, cheaper way to acquire a home or indeed build a larger ‘home of your dreams’.
We really like the idea and it would appear so do you. Already, 80% of phase 1a of the Graven Hill development are sold. Let's hope it spreads to other local authorities.