CRL is a provider of social housing insurance for developers, social landlords, local authorities, housing associations and community led self build projects. This article aims to provide an introduction to how groups of people in local communities can come together to self build affordable housing and we will also look at some of the financing incentives available and the importance of social housing insurance.
Self-build is a key element of the government’s strategy to create more affordable homes. At one point these projects were fraught with difficulty: planning permission red tape, limited land availability, and the reluctance of lenders to provide the needed financing. New measures announced in September 2013 opened up the market to Britons on lower incomes. Incentives for community self builds included:
- Grants for community self-builders
- Ability to apply for money from the Affordable Homes Guarantees Programme
- Freeing up more available building land and making accessible to community self builders
- Improving access to previously developed plots and unused public sector land
New planning guidance was introduced to ensure that councils support aspiring self-builders and establish the demand for self-build in their areas. One such measure was the compiling of a local register of those who want to build their own homes so that they received priority when new brownfield sites were available.
Council Tax discounts were applied to self-build family annexes, eliminating a penalty surcharge that had previously been in place. Self-builders were also exempted from paying Section 105 tariffs and the community infrastructure tax, measures that reduced the cost of self-build by thousands.
The Homes and Communities Agency’s large assortment of smaller plots identified which ones were ideal for self-build projects. The Community Right to Reclaim Land was also enhanced to facilitate the release and sale of redundant public sector land for self-build projects.
These measures helped change the public misconception that self-build was an option limited to those with vast personal financial resources. In the 2012-2013 financial year just under 11,000 self-build projects were completed. It is hoped that further progres can be made and self-build can be established as a more mainstream option. It is estimated that the self build industry is currently worth nearly £4 billion for the country’s economy.
Councils all over the UK are bringing forward sites and providing support to self-builders. Many developers are also embracing the self-build business model, with thousands of individual plots assigned to different projects in England.
Lenders have traditionally been reluctant to provide a mortgage to self-builders before the home has been constructed and valued, so the government approached them about providing more support for self-build projects. Several lenders now offer self-build loans. Additionally the government made £47 million in loan money available to help individual self-builders and community groups.
When self-build becomes a group endeavour, people on low incomes are able to build their own homes at a reduced costs. There are also social and possibly professional benefits: they get to know their future neighbours and they learn construction skills that could translate into future employment in the building industry.