Scotland’s Self-Build Loan Fund Reopens

Loans of up to £175,000 to help self builders are open for application today, November 21st from the Communities Housing Trust.

The funding comes from the Scottish Government and is closing the gap when self builders are unable to access standard bank loans.

The Communities Housing Trust (CHT) is a registered charity and social enterprise focused on building sustainable rural communities across central and northern Scotland.

Ronnie MacRae, CEO of the Communities Housing Trust, said:

“In the years we’ve administered the fund, we’ve seen demand rise as conditions become even more challenging for people to build their own home. In many cases, families just need a bit of extra support and are fully able to build and then repay the loan.

“Self-build remains an important option for many, particularly in areas where no other options exist, so we are extremely grateful to the Scottish Government for continuing to provide the fund.”

Key benefits of the loan fund (via Self-Build Loan Fund: Briefing paper for MSPs)

  • Supports those are who struggling to obtain mainstream mortgage finance, without which they would have been unable to build a home.
  • Supports rural communities whose only option is to self-build to retain their families, support local services (schools etc.) and encourage economic activity, without which we would see further ‘community death.’
  • Supports older people to downsize, which frees up family-size housing. The Fund also supports older people to stay in the current home during the build process, and avoid the upheaval of moving to temporary accommodation and storage costs. This is also true for those who require adapted or accessible homes.
  • Supports crofters, who are also able to access funding from the Croft House Grant Scheme to build homes on their croft, and therefore provides vital support to these remote communities.
  • Fund gives confidence to communities to include self-build plots in their development plans, knowing there is support when the mainstream lenders are unable to provide the necessary funding.
  • Has added to fragile rural economies and supported jobs throughout a very challenging period.

The administration fees borrowers will pay to secure their loan is £895. The interest rate for the loan is 5.5% (9% for those in default). The agreed repayment period will depend on the nature of the project, but the loan is intended to be short-term and repaid on completion of the build.  

Housing Secretary in the Scottish Government, Shona Robison said:

“This fund aims to unlock the dream of building your own home, in many cases allowing people to stay in their local communities. We know it can be more difficult to access finance for self-build projects than for buying an existing property, and this fund is a crucial lifeline for those unable to access standard bank lending. When loans are repaid, the money can be re-used, during the life of the fund, supporting more self-builders and providing more homes for future generations.

“Self-provided housing can play an important role contributing to the long-term sustainability of our rural and island communities, and this £6 million Scottish Government fund will continue to help support this. It has had great success in the Highlands and Islands and has also provided dream homes for people living across the whole of Scotland.

“Wherever you live, if you’re interested in building your own home I’d encourage you to contact the Communities Housing Trust to find out more.”

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