Self-build home: Raise finance

There are several approaches that can be adopted for raising finance:

• Sell an existing property and use any remaining equity after paying back loans. Allowance may need to be made for financing temporary accommodation during the period between sale completion and occupation of the self-build home.
• Raise funds using equity in an existing property as collateral.
• Use capital or liquidate other assets.
• Obtain a mortgage loan. There are a number of companies offering self-build mortgages, typically on the basis of 75% against land value and 60% against building value, releasing funds in the form of stage payments. It is advisable to seek a range of quotes and to pay particular attention to charges for inspection of the work to release progress payments and re-valuations. These charges can vary significantly.
• Apply to schemes such as the Government Custom Build Investment Fund for a loan. This is only available for community schemes with a minimum of five dwellings and a maximum cost of £3m.

NB Self-build homes and the conversion of non-residential buildings into dwellings may qualify to reclaim the VAT paid on eligible building materials and services. See VAT refunds on self-build homes for more information.

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