News & Articles
Build it yourself: financing a self-build project is easier than you think
According to the financial website, Thisismoney.co.uk, around 7% of all new homes in the UK are self-build – and it’s a growing trend with TV programmes such as Grand Designs encouraging home-owners to take the plunge and create their dream home from scratch.
There are obvious advantages to the self-build route – you get more for your money and you get a house that is designed to your specifications. Not only that but new build using Passive Home systems with Insulated Concrete Forms, for example, can create significant long-term savings on energy builds with the added benefit of no stamp duty on zero carbon homes.
The disadvantages are that in order to finance your project you face having to sell your home and live in chaos for a year while your build your new home, with many people opting to live onsite in temporary accommodation.
There is however another option in the form of bridging finance. Unlike mortgages, you can use bridging loans for any purpose and can arrange funds quickly with a minimum of red tape; unlike an unsecured loan, bridging finance offers you access to the kind of financing you are likely to need with a self-build project.
With careful planning and sensible work scheduling, a bridging loan could allow you to fund your self-build project and remain in your old home right up until the date of completion on your new home.
By timing the sale of your old home carefully and arranging a completion date to suit you, it is possible to make a smooth transition from one property to another and pay off your bridging loan with the equity you have released from your old property, saving you the discomfort of living in temporary accommodation and allowing you to realise your dream home.
