I’m looking into the viability of getting a self-build mortgage. Does anyone have any experience with this?

I don’t need to buy the land, but I will need funds to build the house. The land has previously had planning permission granted (now lapsed) so we are confident of having it agreed again.

The land is worth somewhere around £200k and I’ll need to borrow about the same again to build the house. On today’s figures, the completed house should be worth around £500k.

What I want to know is whether or not I will need to put down a deposit to get the mortgage? I understand that normally I would need to put something down but most self-builds include buying the land, which I already have (which I’m hoping could act as my collateral).

The land acts as your deposit.
There are two types of Self build mortgages I looked into, most do arrears stage payments that are triggered when certain stages are complete. This type is ok if you can fund each stage first. The other is an accelerated mortgage where they pay in advance of each stage, this is handy if you have no cash to start the build.

You will pay a higher interest rate for a self build project, but more "normal lenders" are now doing them.

Two things to consider on a self build of significance First, you can only claim your VAT back on a SB if you plan to live in it yourself. Second, depending on your local authority rules regarding community levies, you may have to prove you live in the new property for a number of years for an excemption.

Good luck

That's really useful, thank you.

I have a mortgage chap at work but he's on holiday for a month and told me he's not that knowledgable about self-builds.

We plan to live in the house, possibly indefinitely. The previous plans, which we may tinker with, will accommodate a second child comfortably.

We'd look to remortgage after the house was built and we'd moved in, which I think is quite normal.

I have access to lenders that will lend 50% to 75% of the value of the land once the planning permission is reinstated. This will give you funds to get the build underway. They can lend more (all pre agreed at the beginning), at certain stages (as mentioned above), with a total loan at the end being between 60% and 75% LTV of the end value.
Happy to help further if you want. or point your mortgage guy in the right direction :)]

I should also say, this is all subject to affordability and underwriting

Thanks for that, very useful.

You have PM.