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Self build mortgages

Journalist: Emma Lunn, Freelance

ended 13. January 2026

I am writing a feature for HomeBuilding & Reno magazine about how to finance a self-build project. 

I need brief quotes from mortgage/property finance experts answering the following:

Can first time buyers get a self-build mortgage?

What safeguards should you put in place if you borrow money from friends or family to finance  self-build project?

Why it is vital to have the right insurance in place when doing a self-build?

2 responses from the Newspage community

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Editor
Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
Borrowing money from friends or family can complicate a self-build mortgage application because lenders may see it as additional risk. It needs to be approached formally, with everything in writing, and it needs to make clear whether it’s a loan or a gift. If it is a loan, confirm repayment terms upfront so there are no surprises during underwriting or later in the build.

Insurance is also non-negotiable on a self-build, because accidents, theft, or the weather can derail a project entirely and put your budget under serious pressure.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
Most people suffer from Grand Designs syndrome where they assume the bank will cheerfully fund their vision but self build mortgages are strictly stage payment affairs.

You essentially have to prove the value of the pile of bricks before they release the next tranche of cash. My advice is to secure a specialist lender who understands arrears based payments versus advance stage payments because that distinction determines whether you have the cash flow to pay the builders or if you end up living in a caravan on a muddy plot.

Always factor in a twenty percent contingency because materials inflation does not care about your budget. Self build offers the only tax free capital gain available on day one but do not confuse a construction project with a standard house purchase. If you treat it like a DIY hobby, the bank will pull the plug before the roof goes on.