Self build loans and finance

The main self build finance options are a stage-release self build mortgage, short-term bridging finance, savings, and money released from selling or remortgaging an existing home. Many projects combine more than one, for example a mortgage for the build stages and savings for the plot, the design work and the contingency.

A self build mortgage is a residential mortgage on the home being built, with funds paid out at agreed stages. It converts to, or is replaced by, a standard mortgage once the home is finished.

Development finance is designed for builders selling homes for profit rather than people building a home to live in, so it is rarely used for a single self build.

The terms self build loan and self build mortgage are often used for the same product, a loan secured on the plot and released in stages. Unsecured personal loans are sometimes used for small gaps, but they are limited in size and usually cost more than secured borrowing over the length of a build.

A self build mortgage is regulated where the borrower will live in the home, so lenders check affordability on income and outgoings in the same way as for a standard purchase. Lenders also check the build budget and programme.

The way stage releases work, and the difference between arrears and advance drawdown, is explained in the guide to how self build mortgages work.

Bridging finance is sometimes used to buy a plot quickly, to fund a build while an existing home is sold, or to cover a gap between stage releases. It is short-term borrowing secured on property, usually priced monthly, and it needs a clear exit, such as a self build mortgage or the sale of a home.

Bridging costs more than a mortgage over the same period, so it suits short gaps rather than whole builds. Lenders look closely at the exit, because a delay in the build can extend the loan.

Comparing the total cost of bridging with the cost of waiting for a mortgage, including the risk of losing a plot, helps decide whether it is worth using.

Self builders can reclaim VAT on many building materials and some services through the HMRC DIY housebuilders scheme, with one claim allowed per home. For work finished on or after 5 December 2023, the claim must be made within six months of completion (GOV.UK, accessed 20 Oct 2026).

Self builders can also apply for an exemption from the Community Infrastructure Levy in England and Wales, which must be claimed before work starts and has occupancy conditions (GOV.UK CIL guidance, accessed 20 Oct 2026).

In Scotland, a government loan fund supports some self builders who cannot get mainstream finance. How it works is set out on the self build mortgages in Scotland page.