In the housing sector, recent policy announcements, such as the Government backing SME builders to get Britain building, indicates growing recognition of the importance of small and medium builders when it comes to addressing the UK’s housing challenges.

This recognition is echoed in Labour’s housing agenda, which includes several reforms aimed at supporting smaller builders, alongside plans to establish a housing bank to offer financial assistance. Together, these proposals highlight a shift toward broadening the base of those delivering new homes and strengthening the overall capacity of the sector.

As part of this shift, self and custom build homes, designed and delivered by individuals or small groups, present a valuable opportunity to expand housing supply and empower communities. However, despite the growing interest, the sector remains underutilised and has yet to be fully embraced in government strategies.

Ongoing obstacles to growth

Despite encouraging policy signals, the sector faces persistent challenges. Planning approvals for new homes have dropped to a 13-year low, and smaller developers and self-builders are particularly affected. Complex planning systems, delays in approvals, limited access to affordable land, and restrictive mortgage lending criteria all pose barriers.

The Financial Conduct Authority’s review of mortgage rules offers potential relief by expanding access to finance, especially for first-time buyers and older borrowers. Yet mortgage reform alone will not solve the supply problems if self-builders continue to struggle with planning permission and land acquisition. The sector needs policies that specifically address these issues.

Financial reforms and what they mean

The government’s plan to redesignate Homes England as a public financial institution could help by providing cheaper and more flexible loans. This change could support smaller developers and community-led housing projects that often find it hard to secure commercial financing. However, without improvements in planning processes and targeted land release, this reform may not achieve its full potential.

It is essential that land made available through public release is accessible to self-builders rather than being dominated by larger developers. Additionally, investment in infrastructure and support for innovative building methods are crucial to unlock the sector’s capacity.

What the Mansion House speech missed

The Chancellor’s Mansion House speech presented a positive outlook for the mortgage market, focusing on increasing competition, lowering rates, and encouraging more flexible lending. However, it excluded any mention of self and custom-build housing. This lack of recognition is significant because these sectors could contribute to affordability, consumer choice, and regional development.

By failing to address self and custom builds, the speech missed an opportunity to signal targeted financial support for these projects. Mortgage lenders currently have little incentive to offer products tailored to the needs of self-builders or those pursuing sustainable and bespoke homes.  As a result, financing challenges for self-builders remain unaddressed.

Why self and custom builds matter beyond numbers

Self and custom build homes provide more than additional housing supply. They promote community involvement, greater design diversity, and improved energy efficiency. These homes tend to meet the long-term needs of their occupants better and often reflect local character and infrastructure capacity.

To unlock these broader benefits, policymakers must go beyond general housing supply targets and create an environment where smaller builders and individuals are confident to invest and deliver.

A missed opportunity

While the government is clearly focused on increasing new home supply, self and custom builds continue to be overlooked in key policy announcements and reforms. This lack of specific attention risks leaving a valuable part of the housing market underdeveloped.

For the UK to build a more inclusive, sustainable, and responsive housing market, self and custom builds must be explicitly included in funding and policy plans.

Tony Hall is head of business development at Saffron Building Society