The UK government has unveiled plans to help "thousands" of Britons get on the property ladder by supporting them to build their own home through a new initiative offering low deposits.
The Help to Build scheme, announced on Friday as part of the Department for Levelling Up, Housing and Communities, will be backed by £150m ($184m) of funding.
Help to Build works in a similar way to the Help to Buy equity loan scheme, which is due to come to an end in March next year, but is for self- and custom-builders.
It comes as UK house prices rose 12.4% to a new record high of £281,000 in April, marking a £31,000 increase on this time last year. Average prices surged over the year in England to £299,000, a rise of 11.9%.
As the launch of the scheme brings owning your dream home one step closer, what does this mean for potential homebuyers?
What is the Help to Build scheme?
From Monday, people can apply to create the home they want for up to £600,000 with a 5% deposit and an interest-free (for five years) government Help to Build loan.
The other 95% comes via a Help to Build mortgage, which can only be provided by lenders approved by Homes England, which runs the scheme.
The mortgages offer advance stage payments, meaning borrowers receive funds before each stage of their project. They will also benefit from stage payments being linked to the project costs with no risk of receiving less than expected due to an interim valuation.
Those interested can spend up to £600,000, which must include the land if you don’t own it, and no more than £400,000 on build costs. You can inject more of your own cash If the build exceeds the cap.
Housing minister Rt Hon Stuart Andrew said: "Through the Help to Build scheme we will help thousands more people onto the property ladder by giving them the opportunity to build homes that are perfectly tailored to their needs and in the communities they want to live in.
"This innovative scheme will build on our work to break down the barriers to homeownership, as well as creating new jobs, supporting the construction industry and kickstarting a self and custom build revolution."
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What does it mean for potential homebuyers and who can apply?
The £150m initiative is not just for first-time buyers, and anyone in England can apply to use the scheme for a self-build home.
Applicants will need a plot with at least outline planning permission, a good credit record and a costed design.
Under the scheme, people can find a plot and hire builders themselves, or commission their own custom-build property organised by a developer to their specification.
Once the home is finished, they must live there and it must be their only home.
Self- and custom-builders have three years to build their house, after which the Help to Build equity loan is paid by the government to the lender. This can be up to 20% of land and build costs outside of the capital and up to 40% within London.
For the first five years of the loan, payments are interest free. After that interest is charged starting at 1.75% in year six rising in April each year by the rate paid the year before and 2% plus inflation.
Although borrowers can pay back the equity loan at any time after the build is finished, they must repay it by the end of the mortgage term or when the home is sold.
The sum homeowners repay is linked to the value of their home at the time, not the amount they borrowed.
Darlington Building Society was the first lender to join the scheme, with mortgage rates fixed at 5.39% or 5.99% for three years.
Andrew Craddock, Darlington Building Society chief executive, said: "Self-build isn’t the preserve of the wealthy, and Help to Build makes it more practical and accessible than ever before for people to build their dream home.
"This scheme also opens up the opportunities to first-time buyers. It is a fantastic example of the market moving with the times, and people’s changing wants and needs."