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The Complete Self Build Resource Pack

The photograph shows a self builder at Greenwich Self Build Project / photo: Architype


Why Self Build?

The Dream

Building for yourself is seen as a way of getting a place of your own. To get the place that you want, where you want and at a price you can afford.

Building your own home, as has been found by those who have done it, is a way of learning while doing and of getting more than just a building out of the time and effort.

Self building as a group brings together "the sheer wealth of talent of ordinary people" (Walter Segal) and can show that when given the necessary tools, knowledge and resources, people can work together to achieve a shared dream. It is a way to increase knowledge and learn new skills, build confidence, and nurture a sense of place, and community.

The Reality

Self-builders, as well as gaining the satisfaction of getting a house as they want it, are rewarded by having created something that can contribute towards their financial stability. Self-build is not an easy option though. It entails much careful planning and negotiation, followed by hard physical work. Once the commitment to self-build has been made it is hard to be patient while the many time-consuming procedures are gone through and before the actual building can begin.

And once you're on site, building work, which can be deeply satisfying in itself, can be hard and so prolonged that it becomes a burden. The commitment needed to work on site to finish building without taking too long and owing too much money can seem unrelenting. You will achieve success by the strength of your commitment and the care with which you have organised the project. The greatest resource upon which you will be drawing is your own determination.

It is important to be sure you know what it is you want out of building for yourself and, more importantly that this is what you're actually going to get. These days mortgage repayments and interest rates can be as unpredictable and beyond the control of the owner-occupier, as rent payments are to the tenant. Different self-build housing proposals have been developed over the years that include various ownership options, depending on individual and group preferences, as well as their incomes, and some of these are described in this Resource Pack.

Who the Resource Pack is for

The Resource Pack is addressed to those of you who want to build a house but who do not have enough ready money to buy land and materials nor to cover the fees and expenses required to develop a self build housing project and comply with the relevant regulations. sect12aIt is for people in housing need and on low incomes. For people in such circumstances there are two possibilities - to borrow money and to seek grant aid. But, of course, its not as easy as that.....

To borrow money costs money (through the interest that has to be paid) and those lending the money will demand security of some sort to set against the amount borrowed. The logic of this is that, in order to "be creditworthy" and thus eligible for a loan, self-builders need to be wealthy enough to have some assets of their own. This is a "Catch-22" situation which makes it nearly impossible for those without assets - on low or no income, in rented accommodation or without accommodation at all, without skills and without access to capital or land - to get or borrow the money needed to improve their situation.

Green's House, Bedfordshire

It can sometimes be difficult for newly-formed groups, without an established credit history, to borrow all that is needed to enable a self-build project to happen but your group may be able to indirectly attract grant aid from the government to meet part of the cost. Unfortunately Social Housing Grant from the government is not payable to individuals, only to certain Registered Social Landlords such as housing associations and local authorities.

Building in a group

A self build group not only enables the members to support each other through mutual effort but has the advantage of being able to draw on a wider range of financial resources in the form of grants or loans or a combination of both. Inevitably there are strings attached and the Resource Pack spells out the advantages and disadvantages of the various financial "packages" on offer depending on the type of group or project proposed.

Although primarily for people working in groups, on community self build housing projects, the information in the Resource Pack will be useful to anyone interested in starting up a self build proposal - whether as builder, trainee, funding or developing agency - as well as by those who may be co-ordinating or managing the project.

The information in this pack is relevant to everyone in a group embarking on a self-build, community based, housing project whatever the form of construction selected for the process.

Government Subsidy for Self Build Housing

Housing Grant; it's origins

Grant aided, or publicly funded, housing used to be called council housing. It was funded through rates imposed by central and local government and was available at an "affordable" rent to local people who became tenants of the local authority concerned. In
recent years tenants have acquired the Right to Buy their council home at a discounted rate, (introducing the option of becoming home owners to tenants) while at the same time local authorities have had their resources for new building cut. What with existing housing being sold off or transferred out of local authority ownership, and with no new council houses being built, this has led to a dramatic reduction in the available public housing stock.

Housing that receives any public funding these days tends to be known as "social" housing or as "affordable" housing. Affordable housing, in the sense that the term is used in this Resource Pack, means that it is low-cost housing, affordable by local people on low incomes who are unable to compete in the local housing market. The people who decide who qualifies for affordable, state-subsidised, housing are called "social housing providers" who work in consultation with local government planners and housing departments.

Since the hey day of local government being the main housing providers the responsibility for providing affordable housing, has shifted from local authorities to housing associations. In earlier days a self build group could register as a housing association and benefit from government grant paid through the local council. Now, in order to be eligible for government subsidy, it is necessary to be registered with the Housing Corporation which distributes it and self build associations cannot register.

The Housing Corporation

This government appointed quango is divided into eight regions, each receiving an allocation of government funding to support different themes and priorities for housing activity in each financial year. These funds, of which the principal form of subsidy is known as Social Housing Grant (SHG), are distributed amongst the competing housing associations seeking grant subsidy for proposals in their area. The Housing Corporation does not deal directly with self-build groups but with established housing associations (now called Registered Social Landlords) that are registered with them.

sect13aSince 1990 the overall level of public subsidy to housing associations has declined from 90% at that time to nearer half that currently. At the same time the number of homes being developed and managed by individual housing associations has increased enormously. This has had the effect of turning many housing associations into substantial business organisations with large numbers of houses to manage - sometimes over many different regional areas - rather than the local, community-based associations of their origins. New self build groups are unable to get direct access to or make a direct application for government (grant) subsidy so self build groups have to partner a secondary housing association, a Registered Social Landlord, who applies for the money on their behalf. So it is true to say that if you want to qualify for a government grant to help you build new housing you're probably going to have to become a tenant or leaseholder in a shared ownership scheme. (See Section 4, Grants for Housing)

Segal method frames at Green-street Self Build, Lewisham

Ownership and subsidy

The term self build does imply that you are building for yourself, that the house you build is for your ownership. To build a house for somebody else to own so that you can rent it back from them, albeit at a subsidised rental, may not seem a very attractive option. But if this is the only route to get sufficient funds to build at all, it is worth seeing what you can get out of it. The Resource Pack sets out various models for attaching a self build group to a Registered Social Landlord, or for following a different approach, whereby the self builders may get some reward for their building efforts regardless of whether they end up owning the property or not. (See Section 2: Getting Organised)

There is not a single preferred model because different people in various circumstances will have different views as to what kind of reward they would
find appropriate. However, whatever the model, there can be problems for raising money as RSL's compete against each other for a share of the Housing Corporation's decreasing funds. In fact only a sixth of them are likely to be successful in any one year. Even when a scheme is approved for funding the proportion of building cost covered by Housing Corporation subsidy is low, and getting lower, meaning that it is necessary to meet an ever increasing proportion of the balance of the costs by borrowing or by drawing on the housing association's reserve funds.

Mixed funding

Of course, as the level of subsidy declines the cost of commercial borrowing to finance the remainder of the costs climbs higher. Housing associations thus have to consider very carefully any housing developments that they propose and are inclined to favour proposals which respond directly to the priorities of the Housing Corporation and of their local authority - whose support is vital to the success of their application for finance.

Other funding sources

If you need to look further for money, or are thinking about taking a different route, and are undaunted by the prospect of yet more complicated negotiations with different government departments, the Resource Pack includes advice and information on other sources of additional state, and indeed, transnational subsidy which can be claimed if proposing to provide extra benefits over and above the fact of adding to the nation's housing stock. Thus some public money may be payable for improving a run-down neighbourhood or providing training and employment to young people. (See Section 6: Meeting Costs of Development & Training)

Different models and routes to funding are described. But you will see that, in general, the more partners are involved and the more diverse are the aims of the proposals, the greater potential there is for procedural complexity and the more opportunities there are for things to go wrong.

click here to continue reading 'The Self Build Resource Pack' Section 1: introduction

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