Affordable Self Build
Last year I found out about a project in The Netherlands that enables households on an income of between €27,000 and €40,000 (about £23,000 to £34,500) to build their own homes. The deposit required is €6,000. The ambition to self-build on that kind of budget would seem ridiculous in the UK so is there something we learn from the Dutch?
In September 2018 I joined a trip organised by the Right to Build Task Force to look at various developments of self-commissioned homes in The Netherlands. The opportunities for self-building or commissioning your own home are very limited in the UK even though, according to the Task Force, 61% of adults say they would like to self-build. The Right to Build Task Force is looking to inspire developers, planners, housing professionals and politicians to create more self build opportunities in the UK by showcasing self-built developments on the continent where a much higher proportion of new homes are self-built or self-commissioned.
Just to be clear, self-commissioned homes are built by professional builders employed by the household that will live in the home. They’re built to a design that the household has chosen. The term “self-build” can include “self-commission”.
One of the most inspiring projects we saw was an initiative called Ik bouw betaalbaar (“I build affordable”). This isn’t the kind of self build we see on Grand Designs but homes side by side in a terrace, built according to the requirements of the people who live in them.
Households with an income within the qualifying range can purchase the building plots and building companies compete to be commissioned by the plot owners to build their new home. The plots cost €41,500 and the building companies are required to offer to build the homes for no more than €125,000 including taxes and architects’ fees. The homes are constructed using different materials and to different heights but are quite compact and are built in terraces, touching one another. They’re usually quite basic in terms of their architecture but, with all the different designs side by side, they can create a street scene of some character.
There are other additional costs (Kitchen €3,000, utilities connections €9000, mandatory building guidance €1,500, cost of finance €6,000) that bring the total cost to €186,000. €6,000 must be paid up front and the remaining €180,000 can be borrowed in a mixture of private mortgage and government loans.
A household on a €40,000 income can get a €180,000 mortgage to fund the project. Households on lesser incomes are not able to raise all this money so the government makes second mortgages available to cover up to 30% (€54,000) of the cost leaving the household to get a mortgage for only the remaining €126,000. No repayments are required on the government’s second mortgage for the first three years. After 3 years, and periodically after that, the household is means tested and expected to start paying off the second mortgage according to their ability to do so. The government takes a risk with this second mortgage as it doesn’t need to be fully paid back if a household sells its home at a loss. But we were told the popularity of the homes built in this way has ensured that government has not lost money even through a 2009 financial crisis in the Dutch housing market.
Not everyone agrees about the aesthetics of these homes being built in tight rows of differing designs but what a great opportunity for people in need of an affordable home!
We’re exploring whether some kind of affordable self-build scheme could be possible here.
Click here to take a look at some of the homes on Google Street View.