11th Sept: Self Build Finance Rant

Firstly, I’d like to make it clear that although I woke at two this morning thanks to some sort of Day After Tomorrow style storm, and couldn’t get back to sleep, I am still utterly delighted to be living in the ‘Billyvan. Rich left at five this morning to go and do something very glamorous and downright dangerous.  He hid under the duvet during the night and confessed that he was a little bit frightened of the wind. From a man who is happy to drive in the N24 in the lashing rain year upon year, gave it death up Pikes Peak twice in a row (youtube it, it’s terrifying) and did 220-odd mph in a Skoda across the Bonneville Salt Flats, I find the ‘wind’ fear quite amusing. Especially as we’ve had bbq’d food for three months on the trots 🙂

Rich quite happy to be doing this, but is scared of the wind. I’m saying nothing!

Anyway, this weekend saw the Royal Family (aka my ma, pa and baby bro) come for a visit. My how we chuckled when my Dad wiped his shoes on the mat before stepping into the ‘van. My Mum no doubt wiped them on the way out. They had visited the ‘Billy in February and weren’t overly impressed at the time. Back then, Mum wasn’t even keen on getting out the car. She stuck her head in the gap where the old cottage door should have been, announced it to be ‘bleak’ and cleared off pretty sharpish. To be honest, the weather in Feb wasn’t great and they do live in the Swiss Alps so it probably does seem a little flat out here for them.

Anyway, fast forward to this weekend and they were enchanted by the living space in the ‘van, Mum had a nose around our tidy utility room (ahem) and surely admired the hygenic dog-prints on our bed. She was very well behaved though and didn’t mention the mess – even though she didn’t care to sit down on our chintz wraparound… Mum, that didn’t go un-noticed!

Quite a flattering shot 😉

Instead, I think they really rather liked it. They said hello to Stu, had a little chat, asked us what’s going where and Mum even ventured up the stairs for a look round her ‘bedroom’. I think the fact that the roof has now got some structure and, although un-pointed, a lot of the stonework is taking real shape, it’s perhaps a bit easier to see what Rich and I have been banging on about for so long.  They’re back over here at Christmas to stay with my Aunt for a few days. I don’t think they’re convinced it’ll be done in time for the next visit, but they’re probably secretly hoping it will, just in case WW3 breaks out at Nana’s pre-Crimbo birthday lunch and they need somewhere to lie low. Still, even if we’re not in the house, we have a spare sofa…

We are actually fixing it before moving in you know

So, to the rant. Self Build Mortgage Providers PLEASE STOP LYING about how easy and flexible you are when it comes to financing renovations or self builds. I have to say, if there’s anything stressful about building or renovating, it’s dealing with the box tickers who work for banks or building societies (and no, lady in my bank, you can stop saying ‘I told you to talk to us’, I did, your guys were even worse).

‘Hey stupid poor house builder, we’ll lend you up to 70% of the land cost and 70% of the cost of your build. We don’t put you in boxes because we’re cool and flexible. We’re so cool and flexible that we’ll even let you live in your own house.’

Er no, they don’t. Here, in a nutshell is our experience. We were lucky enough to make a bit of a killing on the last property and this one was relatively cheap. We bought the place on a fully loaded mortgage (god the Pistonheaders finance-haters are gonna love this one) and sat waiting for an age to sell our old house. That was scary. Eventually sold up, paid off massive millstone and have a bit of money spare to do some of the major works. With me?

I don’t really like to talk about money because the value of it is individual to everyone, but I do think it’s important to illustrate what we’re asking for so people don’t think we’re just mental fantasist dreamers. Okay, so in % terms, we’re looking at borrowing just over half the amount of what the plot cost us. Once finished, the projected valuation (and I’ve kept this conservative just so I didn’t have to pay higher valuation fees!) means that what we’re borrowing is about 20% of the finished value. Let’s be even more conservative and say 30%. That, to me, is a bit of a no brainer. Unless, of course, you want people to default on their mortgages rather than paying them back so you get to somehow earn more money.

The problem, and I can see it now, is that I should have been far less organised and a little bit dishonest. Had I left everything until we’d run out of money – thereby letting down our trusty Stu and pissing off any suppliers, we would have had most of the structure up and finished (externally anyway) and then I could simply have asked for a mortgage for an extension, or a holiday home, or something. Instead, having filled out a proliferation of forms, sent off all the plans, structural repair details, schedule of works, membership number for the structural engineers’ golf club, etc etc we had a lovely lady come and visit us a couple of weeks ago for a valuation. She seemed to listen to what I said which was exactly what the forms had asked me and made some notes. We seemed to be getting somewhere. OR NOT, as it turns out.

Obviously the person who designed this has no idea what they’re talking about

Lovely Lady obviously filled the forms in and told the mortgage company that there’s some ’structural movement and a possibility of subsidence.’ They also want evidence that in the future, we’ll be able to insure it like a ‘normal’ house, especially against subsidence. No shit Sherlock, aren’t all those forms, certificates, membership numbers and planning details telling you exactly that? Aren’t they telling you what we’re doing to remedy them? We’re not leaving them like that, you idiots, that’s why we’re spending our money on putting the thing back together. That’s why the bank statements I’ve sent you to prove how much we have to spend before we call upon your money aren’t quite as full as they were. Lord God, give me strength. I wrote them a very polite email, explaining it all again and that the works we’re carrying out are to repair the building in its entirety and that it never even occurred to us that subsidence would be a cause for concern, or the structural engineer (who’s gone for the belt and braces approach), who’s given us the detail to both put the building right and guarantee from future movement. Still, Lovely Lady knows better than a man with more qualifications than can be found at an Oxford graduation ceremony.

Today’s missive from the mortgage people is that they want some more membership numbers. I sent them the number for the local Chinese.

So for the benefit of anybody else considering doing something like The Meaden Project, make sure you a)like filling in forms b) like filling in the same forms again c)like explaining the forms you’ve just filled in d)like trying to explain to the so called ‘experts’ about building control, structural engineer qualifications and how a renovation basically works e)like collating references from accountants, solicitors, your bin men, and anyone else you ever have contact with (and they’ll all need references too) and f)like people insisting you buy a structural warranty for a house that’s not covered (they won’t cover the old cottage – normal policy) and the SIPS extension comes with its own warranty – so I must be REALLY stupid to want to spend £1000 on something that’s totally worthless. I properly understand exasperating.

In all seriousness, I’d be really interested to hear from anyone who has actually managed to finance their self build or renovation in the last couple of years or is going through the process now. I’d be even keener to hear from someone I can pay to take the pain away. Obviously, we’ve been all ears about self build finance when it’s in the property or news pages recently and the government are banging on about making land, and finance, available for self build but I suspect it’s a bit like those great rates for first time buyers – sounds like a fantastic deal until you actually fill the forms out and realise that very few people are actually eligible. Or perhaps because the person checking the ticked boxes has actually done their job and doesn’t like the idea of a Special Menu Meal for One 😉

Emma

PS A bit of sympathy, if you would, for Mr T. He got stung by a bee this morning and has a sore leg. Although I suspect he may be milking it a little.

Poor little guy

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5 responses to “11th Sept: Self Build Finance Rant

  1. Firstly, I’ve been dipping in and out of the updates on this blog and enjoying it a lot – more than once when I was growing up we lived in temporary accommodation (one had wheels!) while houses were built, and oddly, I quite miss that.

    I was looking at a self build a number of years back and all seemed quite promising. Then the Northern Rock thing and the next time I was speaking to finance people they were quite brutally honest about how much harder it had suddenly become… perhaps the prospect of dealing with me put them off? It sounds like the upfront honesty policy didn’t last too long. You could explain to the finances that you have plenty of shallow grave space and no one would miss them?

    Good luck… with all aspects!

  2. There’s nothing shallow about the grave, believe me. Living on wheels (and blocks) is fantastic so far. Which is probably just as well at the rate the lenders move at. I may try a new strategy tomorrow but am loathe to chuck away the application fee, valuation fee, etc I think it’s just the bells and whistles marketing approach, and then not delivering which makes it so frustrating. Still, onwards, etc

  3. They all appear to want to make it a complex process to keep them in jobs. Just make it simple and cut the bull, then people can make proper informed decisions without needing a degree in banking

  4. Hello,
    I’ve jsut come across your interesting site about your renovation/self build project. I was especially interested in your problems with securing the finance. I, along with colleagues at the Centre for Housing Policy at the Unviersity of York, am undertaking research into the potential for self build on behalf of Lloyds Banking Group. We’d really like to talk to self builders about their experiecnes and the obstacles they’ve encountered, particularly about finance (!), and what has worked and what support they’ve received etc.

    Would you be willing to talk to us at all? We wouldn;t keep you long but we hope the report will inform debates about hwo to improve this sector in the future.

    My email address is alison.wallace@york.ac.uk if you’re interested in getting in touch.

    I’d love to hear about your project and look forward to hearing from you.

    Best wishes,

    Alison

    Alison Wallace (Research Fellow)

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