Self-builders enjoy a 35 per cent equity gain the day they move in. And they save on Stamp Duty. Laura Howard reports on a bright spot in the market
For years, the term "negative equity" barely featured in the vocabulary of the modern homeowner. But things have changed. The Bank of England revealed last week that 1.2 million homeowners are likely to find themselves trapped in a home worth less than the mortgage secured against it as prices continue to tumble. But one type of homeowner could be better equipped to fight the return of negative equity than the rest – those who build the homes they live in.
Self-builders benefit from an average 35 per cent equity gain from the day they move into the property, according to John Hay, marketing director at self-build specialist BuildStore. "When the house is complete, it should be worth around 35 per cent more than the total cost of the land and the build. This cushion against negative equity means that now is the perfect time for self-build." read more
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. A mortgage loan is a secured loan in which the collateral is property, such as a home.
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