Is Now the Time to Build Your Own Grand Design?

With a shortage of properties available in certain parts of the UK, we look at whether it could be the ideal time to consider the popular self-build home route and create your own ‘Grand Design’.

Where we are now

The UK housing market is at a crossroads in 2024. With house prices predicted to fall by between -2% and -4% due to broader economic challenges, and pressure on household finances, notably from inflation and higher interest rates impacting housing affordability, the landscape for potential homeowners and investors alike is evolving¹.

At the same time, there is a chronic shortage of housing in the UK, and the Competition and Markets Authority has highlighted the need for more, better quality homes and a streamlined planning system to address the scarcity that has been driving up prices².

Amid these challenges, the notion of self-building emerges as a compelling alternative. Building your own home is not just a dream for those seeking a ‘Grand Design’ but could increasingly be seen as a practical solution to find a way out of the constraints in the traditional housing market – but why consider this route, and what does it mean for potential self-builders?

New build cottage style dormer brick property with timbered canopy double detached garage and sweeping block paved driveway

The Case for Self-Build in the Current Market

There are a number of benefits that may be had from going down the self-build route – whether it’s creating that personalised dream home or even saving money versus a comparable property on the market.

Self-build projects can also be a way to sidestep the high prices and competition for existing homes, particularly in areas where the housing shortage is most acute. Despite a slight improvement in market confidence and transaction volumes expected in 2024, affordability remains a concern for many, and data from HM Revenue & Customs has shown that housing transactions having fallen 19% year-on-year³.

Financing Your Grand Design: Self-Build Mortgages

Financing remains a crucial consideration for anyone looking to embark on a self-build project. Self-build mortgages are designed specifically for this purpose, offering a different funding structure compared to traditional mortgages. Funds are usually released in stages as the build progresses, reducing the lender’s risk and helping manage cash flow throughout the project.

Given the current economic context, with mortgage rates starting to steady following a turbulent past two years, it could be an opportune time to explore self-build mortgage options – you might be surprised at what’s available. The potential for a bespoke home and the chance to potentially save money compared to a traditional home can make for an attractive proposition for those looking to create their dream home in this period of market uncertainty.

Navigating Challenges

However, potential self-builders must be prepared to navigate the wide range of varying challenges that come with the self-build project option – from securing a plot, obtaining planning permission, and managing construction costs as the build progresses. The government and industry are making efforts to address the housing shortage by fixing the planning system and increasing the number of quality homes are steps in the right direction, but they also highlight the complexities involved in bringing new homes to fruition^[2],[4].

Conclusion

In a market characterised by a shortage of properties and shifting economic indicators, building your own home presents a viable alternative to traditional homebuying paths. With thoughtful planning, appropriate financing through self-build mortgages, and a keen eye on the evolving housing landscape, your grand design could be more than a dream—it could be your future home.

Embarking on a self-build project is not without its challenges, but for those willing to navigate the complexities, it offers a unique opportunity to create a personalised living space that meets their needs and preferences, potentially at a lower overall cost. As the UK housing market continues to evolve, self-building stands out as a beacon for those seeking not just a house, but a home they’ve truly made their own.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

Sources

Lloyds Banking Group (2024) UK housing market review and outlook for 2024. Available at: https://www.lloydsbankinggroup.com/media/press-releases/2023/halifax-2023/uk-housing-market-review-outlook-2024.html [Accessed 20 Mar 2024]
Reuters (2024) UK builders and government need to fix housing shortage, regulator says. Available at: https://www.reuters.com/world/uk/uk-antitrust-watchdog-starts-probe-into-homebuilders-2024-02-26/[Accessed 20 Mar 2024]
Mortgage Strategy (2023) HMRC figures show transactions falling 19% year on year. Available at: https://www.mortgagestrategy.co.uk/news/hmrc-figures-show-transactions-falling-19-year-on-year/[Accessed 22 Mar 2024]
House of Commons Library (2023) Tackling the under-supply of housing in England. Available at: https://commonslibrary.parliament.uk/research-briefings/cbp-7671/ [Accessed 20 Mar 2024]

All the information in this article is correct as of the publish date 28^th March 2024. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.