Policy paper

Self and custom build action plan

Published 24 April 2021

Applies to England

© Crown copyright 2021

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This publication is available at https://www.gov.uk/government/publications/self-and-custom-build-action-plan/self-and-custom-build-action-plan

1. Introduction

The housing market is dominated by a small number of volume builders and to reach the ambition of delivering 300,000 additional homes per year we must maximise delivery across new and existing sub-sectors, catalysing new tenures and giving consumers greater choice over housing products.

Self and custom build housing harnesses the power and initiative of individuals to instigate building projects giving them control over the look and feel of their home. Often utilising small sites of little interest to major builders, the sector brings forward housing projects delivered through SMEs and specialist builders, helping to build a more diverse and resilient housebuilding sector, and improving the design and quality of homes as they are built by the people who will live in them.

The self and custom build sector is under-developed in the UK. In Europe and North America, the sector delivers a much higher proportion of housing output. Only 7% of homes in UK are built via self and custom build, delivering an estimated 13,000 units in 2018. Nonetheless, even at this underdeveloped scale, this level of output is enough to make the sector the equivalent of UK’s fourth largest housebuilder. There is capacity to expand and if we increased to levels similar to the Netherlands, we could see 30-40,000 self and custom build homes built annually.

The government is committed to increasing the number of self and custom build homes in this country and to establish it as a mainstream option for people to choose to get on the housing ladder or when moving home. The government has previously brought forward initiatives to tackle the barriers to the growth of the sector, and now we are bringing these initiatives and new ones together under one self and custom build action plan.

2. Why is government support needed?

There are 3 main barriers to growth of the sector in England:

Access to finance

Mortgage finance

Stage payment mortgages usually required for self and custom build projects typically come through smaller lenders usually at higher rates and lower loan to value. This creates a barrier to first time buyers, younger people and those who do not already have substantial capital.

Developer finance

For custom build developers bringing forward multi plot sites.

Access to land

Not enough serviced plots (plots with planning, utilities and access) – suitable for self and custom build available.

Expertise/knowledge gap

This is a nascent and novel sector. The availability of consultancy expertise is limited and the wider knowledge base of self and custom build is low, which can act as a barrier to self and custom build homes being delivered.

3. Government interventions to support the sector grow

Access to finance

Mortgage finance

Multi-year funding for ‘Help to Build’ was announced at the 2020 Spending Review. In April the government confirmed an initial £150 million over 4 years to support the scheme to deliver low deposit mortgages and improve affordability of home ownership for self and custom builders similar to Help to Buy.

Action:

Developer finance

The Home Building Fund, launched in October 2016, offers £2.5 billion in short term loan finance targeted at small and medium sized builders, innovation and custom build. Funding is available to custom build developers bringing forward serviced plots on sites of 5 units or more.

Access to land

Brownfield land

As part of the 2020 Spending Review, the government announced additional funding for local authorities to release their surplus brownfield land through the Brownfield Land Release Fund (BLRF). The £75 million BLRF will allocate up to £25 million to local authorities to enable them to bring forward serviced plots for self and custom build on public sector land. 

Action:

The Self-build and Custom Housebuilding legislation or ‘Right to Build’ legislation

This legislation created a duty on local authorities to keep a register of demand for self and custom build in their area and permission serviced plots suitable to meet that demand within 3 years. Since April 2016, all local authorities have established a register.

Legislation review

The time is now right to look again at how the legislation is working, and the Department has announced a review of the legislation to consider whether our interventions are having the desired effect, and whether reforms are needed.

Action:

  • April: Ministerial roundtable with the sector and local councils
  • Summer: Legislation review concludes

Self-build and custom housebuilding data

We have collected and published data on local authority performance and at the last data collection (October 2019) the registers contained around 46,000 entries and gave a picture of demand across England.

Action:

  • Spring: Publication of 2019-20 Self-build and custom housebuilding data
  • Autumn: Publication of 2020-21 Self-build and custom housebuilding data

Planning for the future

The consultation included specific proposals that allow local authorities to identify sites for self and custom build and community-led housing in their local plan, including ensuring sufficient provision to meet requirements identified in their self-build register, and proposals to explore how publicly-owned land disposal can support SMEs and the self-build sector.

Action:

  • In due course: Planning for the future response published

Expertise/knowledge gap

Right to Build Task Force

The National Custom and Self Build Association’s (NaCSBA) Right to Build Task Force was established to help local authorities, community groups and other organisations help deliver self and custom build housing projects across the UK. Initially funded by the Nationwide Foundation, since 2020 it has been funded by government to provide expertise and support to local authorities on the implementation of the Right to Build and how to secure self and custom build delivery.

Action:

  • April: Right to Build Task Force funding for 2021-22 confirmed

Scaling up self and custom build

Beyond the policy interventions noted above, the government recognises the opportunity to do more to scale up the delivery of new homes through the self and custom build sector.

Coronavirus has highlighted the importance of our home and that homes should maximise our creativity, our effectiveness, and the quality of our lives. The Prime Minister has therefore commissioned Richard Bacon MP to undertake a review to establish a plan to scale up self and custom build homes to boost capacity and overall housing supply and provide recommendations to government.

Action:

  • April: The Prime Minister commissions the ‘Bacon Review’
  • Summer: Bacon Review published

4. Action plan timetable

April

Brownfield Land Release Fund – prospectus published
Legislation Review – ministerial roundtable
Help to Build – confirm initial funding package
Bacon Review – review announced
Right to Build Task Force – funding for 2021-22 confirmed

Spring

Self-build and custom housebuilding data – 2019-20 data published
Help to Build – prospectus published

Summer

Brownfield Land Release Fund – deadline for applications (2 June)
Bacon Review – report published
Legislation Review – review concludes

Late summer

Help to Build – applications open

Autumn

Self-build and custom housebuilding data – 2020-21 data published

In due course

Planning for the future – government response published

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