Have you ever dreamed of building your own home?
My Dad was an architect when I was young and some of my most enduring memories are seeing my Dad working at his huge home drawing desk with what looked like large pieces tracing paper stuck secured with masking tape. Naturally I spent some time designing my own dream house and asking my Dad what he thought of my design decisions.
Maybe you have similar ambitions for getting your own dream home designed and built in the real world, but do you have a plan for finding the money to make your dream into a reality?
Building a house isn’t always a childhood dream to be realised. For an increasing number it is simply a necessity to ensure they have a space suitable for their family, particularly with the UK’s current shortage of housing.
An increasingly popular method of building a new home, both cost-effectively, quickly, and with environmental and engineering advantages, is by using MMC.
What does MMC stand for?
MMC stands for ‘Modern Methods of Construction’ and in a survey of 250 house-builders by the Build Show, 67% believe it will play a key role in new-home supply in the UK. These modern methods, also known as ‘smart construction’ involvers using off-site construction practices in factories for more efficient, effective mass production in building.
For those with aspirations to build their own house, or move into a new house built in this way, there is plenty of appeal for using MMC. The speed of construction and innovation of materials (using walls made of insulation rather requiring insulation to be added as an additional step known as Structural Insulated Panels for example), can dramatically reduce the costs of building and ongoing costs too.
Reinventing Pre-Fab For the Modern Age
However, there is some stigma associated with this type of construction which is seen by some as a modern equivalent of prefabricated housing which was so popular in the post-second world war years. It was speedy for quickly rehousing those made homeless from the destructions of war but not always the best quality. However today’s methods, where entire walls complete with cladding, doors and ducting for wires and pipes can be made in a factory before being transported to the building site can create some stunning houses that are a world away from the rushed pre-fabs of the post war years.
Getting a Mortgage on a MMC Property
Despite all the cost savings, efficiencies and quality end result of a house built using these modern methods of construction (MMC), there will be different terms and conditions for self-build mortgages on a a MMC property compared with a more traditional build as lenders may not be as familiar with this type of property being used as collateral for the loan. The quality of MMC homes is a consideration and the perception or assessment of the quality could restrict lending capacity available from some lenders.
Financial Hope For Self-Builders
There is hope however for those wishing to get a mortgage on their self-build MMC property. Building Societies such as Ipswich Building Society are generally more receptive when it comes to accepting MMC as suitable security for mortgage purposes, particularly those that lend in the self-build market as they are more experienced in assessing the potential risks of non-standard construction types.
What documentation do you need?
For any mortgage application, you should have utility bills, three months of payslips, a P60 from your employer, proof of any benefits received, proof of identity (such as passport or driving license), 3-6 months of bank statements (print outs may not be accepted). If you are self employed then account statements from an accountant covering the last two or three years will be required, an SA302 tax return form, and further supportive bank statements. In addition, for a self build mortgage application, you will need copies of your planning permission, construction drawings and specs, total project cost estimate (including fixed-price contracts where possible), Building Regulations approval (including SAP calculation), site insurance and structural warranty, and your credit report. If applicable, they will also need to provide their architect’s professional indemnity cover.
Building your own property is an amazing opportunity to create your ideal home, but don’t let getting a mortgage become the most stressful thing – there are lenders like Ipswich Building Society who understand modern methods for construction and if your build is using a scheme accredited through the Buildoffsite Property Assurance Scheme (BOPAS), they could potentially offer you a mortgage deal to make your new home a reality.
Good luck!
About Ipswich Building Society
Ipswich Building Society has approximately 65,000 members and currently has over 80,000 savings accounts and over 5,000 mortgage accounts. There are nine branches across Suffolk in Aldeburgh, Saxmundham, Halesworth, Woodbridge, Princes Street Ipswich, Ravenswood Ipswich, Hadleigh, Haverhill and Sudbury. The Society also has 2 agencies in Suffolk. 80% of the Society’s members live in the East of England with the remainder living across the UK. Ipswich Building Society was established in 1849. See www.ibs.co.uk
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