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Up to 3,000 mothballed self-build homes are expected to get underway when changes that save self-builders thousands of pounds come into effect this week.

From Monday 24 February self-builders will be exempt from paying a levy which until now was placed on most new buildings over a certain size.

The previous charge added considerable cost in some cases to the expense of building a home.  For example someone building their own four-bedroom house that is 150 square metres in size could be liable to pay £15,000 in Community Infrastructure Levy if a council was charging £100 per square metre for residential development in that area.

The axing of the levy for people building their own home is part of the Government’s determination to boost housing supply and help aspiring self-builders get their home off the ground.

The relief from the Community Infrastructure Levy will cover homes that are owner-occupied and built or commissioned by individuals, families or groups of individuals for their own use.

Communities Secretary Eric Pickles said

“Building your own home is always a challenge and we are doing what we can to help people realise their dream and provide a home for their family.  This change will save self-builders thousands of pounds and help many more in the future

“By boosting the numbers of people building their own home we can help increase the number of new houses built each year in this country and support local businesses. There are too many levies and charges on housing.  By cutting these, we can help build more homes.”

Ted Stevens, chairman of the National Self Build Association said:

“It’s great news that the Community Infrastructure Levy exemption for self and custom builders is now being implemented. We estimate that about one in eight self-build projects has been ‘mothballed’ over the last two years, because of the impact of this new charge. So we anticipate the exemption will have a significant impact on self-build starts, with 2,000 to 3,000 homes coming off the shelf, and starting on site in the next few months.

“This is good news for the people who want to build their own homes and it will also be good news for the supply chain and local construction related businesses that support the self-build sector.”

Extensions and family annexes over a certain size will now be exempt from the levy and the Government also intends to consult on removing Section 106 tariff charges from self-build properties too.  In addition from April there will no longer be a council tax surcharge on family annexes.

Exempting self-builders from the levy is the latest in a range of measures to boost the number of people building their own home. They include:

  • Making is easier to get a self-build mortgage.  Government has been speaking to lenders and 26 of them are now offering self-build loans.  Gross self-build lending is predicted to increase by almost half between 2012 and 2015 to £1billion a year;
  • Freeing up more surplus public sector land for self-builders with the Homes and Communities Agency to bring forward a range of sites for custom build homes;
  • Introducing a £30m Custom Build Homes Fund which makes available repayable finance for larger multi-unit projects and grant funding for community self-builders who can now apply for a share of £65million from the Affordable Homes Guarantees Programme;
  • Planning guidance that makes clear councils should help self-builders and establish demand in their area. This includes compiling a local register of people wanting to build a home so they have priority when new brownfield sites become available.

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