Mortgage lending up in September whilst approvals dropped

Figures from the British Bankers Association (BBA) have found that the figure for gross mortgage lending in September increased to £8.4billion, despite approvals dipping slightly.

The amount of money lent by the banks was up from £8.3 billion in August, with a spokesperson for the BBA suggesting that the increase is due to more activity in the buy to let market.

However, the number of mortgage approvals were down 6% compared to August’s figures. 33,130 mortgage loans were approved in September, whereas at the height of the housing market there were about 130,000 approvals a month.

First time buyers who are struggling to get on the property ladder are still concerned about the lack of mortgage lending but the number of 90% mortgages on the market are increasing, so it is important to keep looking.

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Take the Government Self Build Survey 2011

As part of the Government’s initiative to help more people to self build a home for themselves, the Department for Communities and Local Government has launched a survey for self builders.

This short survey asks self builders about their projects to gauge the growth potential of the self build market and the finance needs of self-builders.

Take the 2011 self build survey here.

The results of the survey will feed into work that the Government is doing with the Building Societies Association and lending institutions to make more finance products available to self builders, and to help implement the recently published Self Build Housing Action Plan, The report of the Self Build Government-Industry Working Group, NaSBA,  An Action Plan to Promote the Growth of Self-build Housing from the Self Build Government Industry Working Group, involving Self Build Zone Director, Simon Middleton.



Build Zone welcomes launch of ‘Action Plan to promote the growth of self build housing’

An industry briefing of the long-awaited proposals that aim to boost the number of self-builds that take place in the UK took place on Tuesday 12th July. The resulting report, An Action Plan to Promote the Growth of Self-build Housing will be formally launched next week and is the result of six months work from the Self Build Government Industry Working Group, involving Build Zone Director, Simon Middleton.

Working with the Government, the National Self Build Association (NaSBA), published an action plan to promote the growth of self build in the UK. This was the culmination of more than six months work, involving over 100 experts in the self build sector. The report calls for action on four fronts and lists proposals that should to make more land available for self builders and more finance/mortgages; it should also result in less regulation and red tape and better independent advice to encourage more people to build their own homes.

Grant Shapps said at the briefing ““This is an enormously important moment in the housing history of this country,”

He went on to say:

“Self-build isn’t happening anywhere near its potential in the UK, and these proposals go a significant way to helping achieve my aspiration of doubling the number of homes self-built each year.”

I don’t want this to be a one-off process, rather the start of a revolution. The age of self-build has come,” he said.

The proposals in the plan will now be considered by Government and an implementation group will be established to monitor the progress. It is understood that the aim is to see everything in place by spring 2012. We will keep you updated as things progress.

For more information from Build Zone about Structural Warranties, 10 Year Structural Warranties, contact the Build-Zone team on (0)845 230 9873 or email sales@build-zone.com

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Minimising risk through a structured approach to self-build lending.

Article by Simon Middleton – June 2011

Self-Build lending is still perceived to be problematic even though it’s one of the largest home building sectors in the UK, ultimately delivering prime market property portfolios.  Issues of planning problems both prior to and during the build project, restrictive covenants, in addition to the usual income and accident related issues and the very nature of the project being undertaken continue to make lenders wary. But that’s not surprising when You consider the rather bespoke requirements of self-build lending are normally shoe horned into the existing home purchase structured product arrangement which relies on the valuation process and doesn’t really provide a thorough risk management approach.

Traditionally self-build customers are released funds based on a series of stage payment mortgages which are valued at stages by the lenders valuation surveyor. Whilst a valuer has good understanding of the construction process and is absolutely key to assessing anticipated final value, they may not have a full understanding of MMC and Ecobuild systems, or how to assess the property for compliance relative to planning permission and building regulations. It is very difficult for a valuation surveyor to provide the stage valuation the Lenders are relying on especially as the stage reached may not be relevant to the actual expenditure made. More importantly it doesn’t control what the self-builder is spending funds on.

A general lack of understanding by the self-builder and the lender of the requirements at this level means that contracts between the self-builder and their contractors or tradesmen are not always used, which increases the risk of the build going over budget and they don’t always utilise Site Insurance or a 10 Year Structural Warranty, all of which can easily be stipulated. For example:- Self–Build Zone have a contract service which caters for the creation of written legal contracts for the whole project and is less than £50.

To provide that increased degree of comfort to lenders then maybe they should be taking a more bespoke approach to lending into the sector as it seems to me that there are already the tools in place with which to adequately risk manage the construction process, it’s just a matter of implementing a standard framework and sorting out the communication between the various tools.

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Government pledge more land for Self Builders

SELF build and renovation specialists, BuildStore, has welcomed an announcement by Minister for Housing, Grant Shapps, in which he unveiled new measures to support people wanting to build their own homes, adding that self building “should be an option for all”.

In a speech at the Grand Designs Live Show in London today (3rd May 2011), Mr Shapps said he wanted the UK’s self build rates to catch up with Europe’s and to become a mainstream housing option.

Further to his announcement about the Government’s new ‘Build Now, Pay Later’ scheme last month, Mr Shapps said he wants public and private land to be made available for individual self builders, and community self build schemes. He called on housing associations and local authorities to show more support for the self build sector, and private landowners and investors to release more land to the growing self build community. He said he would soon reveal the first publicly owned sites to be made available to housebuilders with plots exclusively for self-builders.

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