Bridging Finance

Self Builds

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Self Builds

Self builds normally are found in two situations. Someone has bought a plot specifically to build on, or have been granted permission to build on land they already own.

If you have a considerable amount of extra space in your back garden, it may be possible that you could utilise it. You could add a second home in your back garden if there is enough space in the form of a self build. If you need extra cash to help you with self builds, bridging finance may be able to help as often people cant afford to take out a mortgage in addition to the one they have on their home. Alternatively a self build mortgage may be available and both of these options should be discussed with your broker

Advantages of self builds

There are numerous advantages to self builds. Firstly, you can reside in your current property whilst your new self build property is being built. As a result, you can keep an eye on how your build is progressing. Self builds are bespoke, you are involved with all the processes your new self build will go through. Therefore, you can tailor the build to suit your needs. However, if you want to take more of a backseat role, it’s possible to delegate control of the project to an architect.

Plus, there should be extra space in your current property and surroundings to store building supplies for the self build. Also, if building in your garden, the plot of land you are building on is already yours and you don’t have to set aside money for land. Therefore, you can focus all your funding towards the self build. As well as all this, you are still in the same living environment and neighbourhood which means you won’t need to adapt to new surroundings.

The big advantage? Get your numbers right and there could be a big profit to me made. Whats more, it could be tax free if the new build is within the boundaries of your main residence.

Disadvantages of self builds

On the other hand, there are disadvantages involved with self builds. For starters, self builds are risky. If you don’t keep to a strict plan, there is always a chance your build could spiral out of control, which could cost hefty amounts of time and money. It is always wise to have extra money saved up for any unforeseen problems during construction of your self build.

In addition, self builds can be quite stressful. This is especially so for first time builders and the unprepared. Self build projects could potentially take years to finish. So, if your current property gets sold at any point throughout the project, you will have to find somewhere to live in the meantime. Also, self builds are known to put relationships to the test. You will have to make sure you’re both up for the challenge as times could get tough.

Things to consider for self builds

Unfortunately, you can’t just build a house in your garden space. There are considerations to factor in if you fancy building an additional property within your boundaries.

Legal Restrictions

Also known as covenants, you should always check to see if there are any legal restrictions in place that could prevent you from building. If there are restrictions in place, it’s not the end of the world as they can potentially be removed. But, if you disregard any legal restrictions already in place, you could be handed an injunction or face high costs to pay for the restriction to be removed. Land registry searches are cheap and easy to do via a Government website

Location and planning

Of course any application will need to meet the local planning requirements. In simple terms infill and conversion planning has a good chance of success. Ground up building in green belt is always going to be tough.

The more well thought out your plans are the more likely you will get the green light on your planning. Details such as how your new self build will fit in/blend into its surroundings could have a positive impact on your application. If the design is in keeping with nearby houses you should have an easier time. The main problem arises when you plan to build a house with “modern architecture” in a conservation area. If this is your plan you may need to seek the advice of a professional planning consultant.

Capital Gains Tax (CGT)

Capital gains tax is what you would have to pay when you “dispose of” a commodity that has increased in value. Disposing of a commodity includes:

Selling the asset
Swapping the asset for something else
Giving the asset away as a gift
Transferring an asset to someone else
Compensation such as an insurance payout for an asset that has been written off or lost

In this instance, if you plan to live in the self build, when you sell your previous property, you should be exempt from paying CGT. Also, if you gain planning permission to build a second property in your garden space, you can sell the plot and not pay CGT. Assuming you do this, the plot of land must be under 0.6 hectare or 1.25 acres. On the other hand, you will have to pay CGT on the self build if you let it out. CGT will have to be paid on any subsequent sale as it is not your primary residence anymore. Spending a few £100 on tax advice could save a massive tax bill later – especially if you plan to rent the property out. You can get a Free initial tax consultation from a leading property tax expert by completing this form

Mortgages for self builds

There are self build mortgage products available for those requiring a loan to fund a self build property. Self build mortgages work slightly differently to standard mortgages. With a self build mortgage, money is granted in stages. When one part of the build is finished, another sum of the loan is granted to commence the next job. This is done to reduce risk as well ensuring that the money is spent on the project and not elsewhere. Self build mortgage interest rates are higher than usual mortgage products. You will usually require a deposit of around 25%. Those looking for self build mortgages are more likely to be accepted if you have:

Regular stable income and you can prove you can afford the repayments
Good credit score/history
Few to no debts
Experience in self build or a contracts manager to oversee the build.

Self build bridging

Some people may utilise bridging / development finance for their self build project as they’re a quicker option than a self build mortgage.

Click to watch a video on how development bridging works

The key difference between a mortgage and bridging finance is that bridging is noticeably short-term. Usually bridging terms last around 12 to 18 months. If the loan is secured on a property you live in, regulations on allow a maximum of a 12 month term. So, those looking for bridging finance will need to be able to repay the loan in due course. Also with a bridging or development loan there are no affordability checks as the interest can be included in the loan; thus your cash flow isn’t affected.

Borrowers need to be aware that bridging finance is usually secured against property or land you require the finance for or against other property / land you own. As a result, failure to repay the loan on time could mean repossession, penalties, as well as harm to your credit history and score. Plus, whatever is being secured against the bridging loan will have to be valued by the lender.

Make sure that you have a water-tight exit strategy that details all aspects of your plans. Strong exit strategies are key in ensuring the lender has confidence in distributing funds to a borrower.

Always deal with a broker who understands both bridging and mortgages. Your broker can help find the right product now and sense check your exit and if necessary arrange any exit mortgage required

Property Auction Loans Bridging Loans Overview Permitted Development Rights

Whole-of-Market Guidance for Self Build Bridging Finance

Securing competitive terms on self build bridging finance requires expert underwriting knowledge. In addition, our specialist broker team works directly with over 90 specialist lenders across the UK.

Consequently, reviewing your self build bridging finance options with an FCA-authorised specialist credit broker ensures whole-of-market access while avoiding unnecessary fees and delays.

Specialist Underwriting & Whole-of-Market Access

Because specialist lending facilities require bespoke underwriting, comparing lenders across the UK is essential. Explore our complete guide to Bridging Loans Desk to understand how different lending criteria apply to your requirements.

Promise Money is an independent credit broker authorised and regulated by the Financial Conduct Authority (FRN 681423). Our experienced team reviews your specific circumstances to secure optimal terms across 90+ UK lenders.

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Key Takeaways: Self Build Bridging Finance Checklist

Additionally, property valuations can often be expedited or desktop-assessed, significantly reducing upfront costs and surveyor delays.

Furthermore, specialist bridging lenders assess affordability based on property equity rather than strict credit scoring alone.

Consequently, time-critical auction purchases and broken chains can complete in as little as 3 to 7 working days.

Therefore, working with Promise Money ensures you compare optimal rates and terms across 90+ UK lenders.

Specifically, flexible interest options—including retained, rolled-up, or serviced interest—can be tailored to protect your cashflow.

Moreover, facility agreements can be structured with zero redemption penalties as soon as long-term funds are ready.

In addition, non-standard property construction such as timber frame or concrete can be financed without high street restrictions.

Crucially, borrowers facing historic credit blips or complex income structures can secure competitive terms through our panel.

In practice, working with experienced specialist solicitors prevents administrative hold-ups and keeps legal fees completely transparent.

Above all, establishing a verified exit strategy—such as property sale or remortgage—ensures smooth facility redemption.

As a result, property investors and homeowners retain complete control over project timelines and financial commitments.

After all, independent whole-of-market guidance ensures you never pay unnecessary arrangement fees or higher interest margins.

Meanwhile, bridging facilities can be secured across multiple properties to maximize borrowing capacity without selling assets prematurely.

Indeed, rapid decision turnaround gives you the confidence to bid decisively at property auctions.

Finally, clear illustrations provide total transparency regarding interest roll-up, arrangement fees, and net advance figures.

Unlike standard mortgages, specialist bridging finance provides fast liquidity when conventional banking channels are too rigid.

Fortunately, regulated bridging options provide statutory protection when securing loans against residential family homes.

Ultimately, dedicated case managers coordinate directly with lenders and surveyors to keep your completion strictly on schedule.

Similarly, adverse credit bridging lenders focus on overall equity and future redemption rather than automated scores.

Because bespoke bridging structures address unique borrower requirements, comparing terms across 90+ lenders guarantees optimal results.