Financing the dream
Money is the most important part of the plans you are drawing up for your new home and it will be the single biggest building material you will use.
IT IS never too soon to have your finances lined up for self-building.
In fact, once you have decided to go down the self-build route to your new home, it would be a wise idea to meet with a financial advisor, whether independent or at your bank or building society, to give your money a health check and get your funds in training ready for the big event. [It is a good idea to give your finances a regular check-up whatever your plans in life, but that’s a whole different story]. This is where you can trip up, right at the start. Even if you already own the land and don’t need a mortgage to help buy the plot it is best to ensure you get a mortgage offer in place for the building work before you commit and that the plot has planning permission. Do not expect a lump sum, as if you were buying a completed house. Just as you will be building in stages, so you will receive the money step-by-step as well. At each step expect the building work to be inspected as the lender satisfies themselves that the building is progressing as it should. Building your own home is a good way to get more house for your money and a great way to get yourself onto the property ladder, but self-builders do need to have a larger lump sum of cash before they begin. Selling your existing home and living on site in a static caravan, or building your garage, large shed or having a container in place to save on storage costs can also help bring costs down.
Insuring your peace of mind
INSURANCE buys peace of mind and covers any liabilities you have as the work progresses. One you own a piece of land it pays to have site insurance. Remember that as work progresses, the part-built structure itself will start to have value. Once complete a Structural Warranty from an insurer approved by the Council of Mortgage Lenders protects you against the
cost of complete or partial rebuilding or rectifying work to the house as a result of defective design, workmanship or materials, for 10 years. And when you move in, do not forget to have your usual building and contents policey in place. If you are carrying out major renovations to your home it is also best to check with your existing insurer that the work is not so big that it falls outwith the cover of your existing policy.
Self Build Loan Fund
IN November 2017 the Scottish Government announced that a new £4 million self-build loan fund, offering financial backing to people who want to build their own homes will be available later this year. The Scottish Government has yet to announce who will be acting as agent for this new round of funding; also this latest money will be rolled out nationally but the full details have yet to be announced. The Highland Small Communities Housing Trust (HSCHT) ran the pilot project within the Highland Council area due to market failure in the lending market, to provide funding for self-builders, prior to mortgage facilities being available. A spokesman said: ‘The current pilot project allows HSCHT, acting as agent to the Scottish Government, to provide a revolving fund to help self-builders within the Highland Council region. ‘Individuals can apply for up to £175,000, which if successful, can be drawn down in agreed stage payments. ‘The fund is designed to help applicants reach the completion stage of their build projects, at which point they should be able to access a mortgage from the likes of a high street lender or other. The loan is then repaid by this mortgage, and the applicant goes on to pay off their mortgage as they would should they have bought a house on the open market.’ Housing Minister Kevin Stewart confirmed the fund was being set up following a successful review of the pilot in the Highlands. In addition, a Challenge Fund to support pilot projects that will help to expand the custom and self-build sector is now open for applications. Mr Stewart said: ‘We know many people seeking to build a bespoke home, which is tailored to their family needs, can find it tough getting the right advice and securing funding. A pilot in the Highlands is proving to be really successful and now others in communities across Scotland will be able to apply for a share of this £4 million investment later next year. ‘There was considerable interest in the fund following the launch of the pilot in the Highlands, which is why we have made the decision to make an early announcement on the national roll-out. This will give potential applicants the time to investigate housing plots and obtain the necessary permissions, so they can be ready to apply to the fund when it opens. ‘In addition to this, our custom and self-build challenge fund is now open to all to support projects that will help develop ways to better respond to the needs of people undertaking a custom or self-build home.’
Croft house grant scheme
THIS scheme provides grants for crofters to improve and maintain the standards of crofter housing. There is still time to apply for the current round of funding; closing date for applications is March 1, 2018. Dates of further funding rounds in 2018-19 are expected to be announced shortly. The aim of the grant scheme is to attract and retain people within the crofting areas of Scotland including Argyll and Bute, Highland, Western Isles and Arran. The scheme’s website has full details of criteria and eligibility including a detailed list of postcodes for the entire crofting community across Scotland. The funding may be used for: major repairs, internal improvements, rebuilding and new-builds. Tenant crofters and owner-occupier crofters can apply and the scheme is split into high and standard priority areas. In high priority areas a grant of up to £38,000 is available and £28,000 for standard priority for new homes; re building improvements are available of up to 40 per cent of costs up to £38,000 in high or £28,000 standard areas. The grants come with a series of conditions and criteria which have to be met. The Croft House Grant team in the Tiree office (01879 220240) will advise you and explain how you apply.
Grants for renovations
A DISABLED person can apply for a grant for works to adapt their home to meet their needs, even if they are not the owner or tenant. Repair grants may be available from Historic Scotland for the repair of buildings which are considered to be of outstanding historic or architectural interest, or are located in an outstanding conservation area.