A tipping point for self-build?

The UK housebuilding market is unique in many ways and one of them is the dominance of the major housebuilders, but with recent legislative changes and financial incentives to encourage the SME builders back into the market, that may be about to change.

Of the 120,000 or so private sector houses completed each year in England, around 8% are built specifically for individual home owners: the self-builder (or custom builder to use a more accurate term).

In Europe the picture is very different: In Belgium, 70% of houses are built in this way, Germany 40% and even in Northern Ireland it is around 30%.

The Government has recognised that leaving the provision of new housing entirely in the hands of the major developers is not ideal and a range of measures are chipping away at the barriers for custom builders.

As of 1 April 2016 it is a requirement for all local authorities to keep registers of individuals wishing to build their own home and provisions must be made to meet that demand in local building programmes - under the terms of the Self-Build and Custom Housebuilding Act 2015

The Housing and Planning Bill, currently in the House of Lords contains provision for both Right to Buy and Right to Build - providing some statutory requirement for local authorities to identify plots of land for custom builders.

Exemptions from the 3% stamp duty on second homes and from the Community and Infrastructure Levy level the playing field for custom builders and there is no shortage of people wishing to become self-builders.

The National Custom and Self-Build Association (NaCSBA) will announce on 12 April the results of its most recent survey, but it is unlikely to show a fall from the seven million people it identified in 2014 who would like to build their own home.

Meanwhile work has started on 12 government-owned sites that have been made available specifically for custom build projects.

The Government has set a target of 20k houses to be built per year using a custom build model by 2020. NaCSBA believes that, once this method of building becomes accepted as mainstream, the total is likely to be somewhere between 30,000 and 50,000 houses per year.

For SME builders and the entire supply chain including designers, merchants and manufacturers, this would represent a sea-change that will have a profound impact on the operation of their businesses. It's a rapidly developing sector and definitely one to watch.

Posted by Anna Hern