How can I use my Property’s Equity to Self-Build?

One Answer

1. Tim Doherty says:

   29th May 2018 at 9:23 am

   Releasing equity is a solid way to fund housebuilding whether it be for one self-built home or for several as part of a wider speculative development. There are mechanisms in place to release equity as this is after all, your own funds which are stored against an asset. Firstly you could sell your property, choosing rental for your replacement accommodation and put the cash in the bank.

   Alternatively, and subject to status, you could re-mortgage your existing property to release the equity using a lender who has no restrictions on what the release of equity is for, and then deposit the equity in the bank. Armed with your cash you are now in a stronger position to start looking for land but with either increased mortgage or rental payments to make on a monthly basis which must be factored into the equation.

   The rest is just down to market economics and your new and additional borrowing ability. With seed capital of £100,000 (as you have indicated) and your new additional borrowing facility (on top of your new mortgage or rental commitments) you will have a maximum overall building budget for land and construction which is entirely discreet to your financial position.

   Whatever that larger number is will enable you to go seeking land for building purposes or not and this will be influenced of course by prevailing property values in your chosen area. So, the answer to your question is technically yes, but subject to filling in all of the other financial variables.

   Best of luck,

   – Tim Doherty, Build It expert

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