Potential homebuyers who are priced out of the local housing market in England now have a new option to consider, after the government launched the Help to Build equity loan scheme.

Backed by £150 million of funding, the Homes England scheme will enable people to build their own homes – via the custom build or self-build route – which can be considerably cheaper than buying an existing property or one off-plan from a developer.

It means even if buyers have only a small deposit, they can start to realise their dream of owning a property.

Home-builders need to be able to put down a deposit of at least 5% and then they can apply for an equity loan of between 5% and 20% (or up to 40% in London).

The remaining 95% must be funded with a self-build mortgage from a lender registered with Help to Build.

This compares to the usual self-build process that sees buyers having to put down a 25% deposit for land and build costs before they can even apply for a mortgage.

Anyone applying for a custom or self-build equity loan will be allowed to spend up to £600,000 on their new home, including any land purchase, if applicable. However, the maximum that can be spent on the building costs is £400,000 (excluding VAT).

This means, for example:

You buy the land for £150,000

Build costs are £250,000.

Total = £400,000

You secure an equity loan between 5% (£20,000) and 20% (£80,000).

The rest comes from a mortgage from a specialist lender registered with Help to Build.


No interest is paid on the equity loan for the first five years, but you are required to pay £1 a month management fee by direct debit. In year six, you pay 1.75% interest and this increases each April when you pay the Consumer Price Index (CPI) rate of inflation from September of the previous year plus a further 2%.

Things to note

There are some important considerations to be made and a few restrictions with the scheme.

Anyone applying for the equity loan must use the house as their main property – this funding cannot be used for second homes.

Applicants for the Help to Build equity loan must be over 18 and must be eligible to live in England.

If you take out an equity loan, you must repay it in full, plus interest (after year six) and management fees, if you: come to the end of your equity loan term, which is usually 25 years; if you sell the property; you repay your repayment mortgage; or you do not keep to the conditions of your equity loan contract.

Custom build with Hugr Homes

The Help to Build equity scheme could deliver between 30,000 and 40,000 homes a year.

As a specialist in small, high-quality custom builds, we help people achieve their dream home through our affordable, low energy and carbon neutral housing that’s designed around the needs of people and the community. You can find out more about us here.

We pride ourselves on innovation and doing things differently. We constantly seek out new methods or technology that will deliver a better standard home at a lower cost.

We want people to live in individual homes that exude character and are built to suit their lifestyles – the opposite of the copycat properties that new house builders produce up and down the country.

Our approach considers the sites on which we buy land, the history of the areas and which designs and materials will work best. It is what we have done for  many years and our happy home owners demonstrate our success.

We work with you: we can deliver a ‘full turnkey’ package, delivering the entire project to your specification or you can choose a ‘wind and watertight’ option that delivers the facade, roof, doors and windows and leaves you to complete the interior in your own time.

Find out more about our current custom build developments.

Find out more about the Help to Buy equity loan scheme.

If you want to find out how you can use your Help to Build equity loan with Hugr Homes, contact the team today by emailing hello@hugrhomes.com or telephoning 07540 754153.