New Build Grants and Funds
New Homes can be Ideal
When buying a house it is extremely rare to find one that ticks all the boxes. More often than not it is necessary to compromise, whether it is on the price, location or number of rooms. One way to get the ideal home is to start from scratch, and this can be profitable too. The combined cost of land purchase, building materials and labour is typically less than buying an equivalent pre-built property. Research suggests self-built homes can be worth as much as 30 per cent more than the land and build costs the moment they are put on the market.
There are other advantages too, particularly if the new build is environmentally friendly. New zero-carbon homes worth up to £500,000 are exempt from stamp duty until 2012, and if the home generates more power than it needs the excess energy can be sold back to suppliers without incurring income tax or capital gains tax. Grants for microgenerators, central heating and insulation make the prospect even more appealing, especially with value added tax cut from 17.5 per cent to five per cent on a range of energy-saving products.
Take Advantage of Grants
Most local authorities offer grants and incentives to residents installing energy-efficient measures in their homes, such as loft insulation, cavity wall insulation or a new boiler. In addition, the biggest energy suppliers are obliged to meet targets under the Government's Energy Efficiency Commitment and typically have a range of offers as a result. Government funds provide up to £2,700 to households on certain benefits, although the eligibility criteria differ between countries. The funds are called Warm Front in England, Warm Deal and the Central Heating Programme in Scotland, Warm Homes in Northern Ireland and the Home Energy Efficiency Scheme in Wales.
Government grants of up to £2,500 per UK household are available for the installation of microgeneration technologies through the Department for Business Enterprise and Regulatory Reform's Low Carbon Buildings Programme. Grants can contribute to the cost of installing a certified product by a certified installer and the technologies supported include:
- Solar photovoltaics
- Wind turbines
- Solar thermal hot water
- Ground source heat pumps
- Small hydro
- Fuel cells
- Renewable CHP (combined heat and power)
Alternative grants are available in Scotland through the Scottish Community Householder Renewables Initiative, funded by the Scottish Executive. It can provide up to 30 per cent of the installation cost up to a maximum of £4,000, while in Northern Ireland the Environment and Renewable Energy Fund offers grants to householders.
There are two funds available in Scotland that can make considerable contributions to those building a new home. Rural home ownership grants are designed to fill the gap between the maximum mortgage available to the applicant and the cost of a reasonable first home. Grants can be worth up to £20,000 but will not be more than 33 per cent of the total building and land cost.
The croft house grant scheme can help crofters build new homes. Rates of grant vary depending on where the croft is located but can be up to £22,000, with high priority going to remote areas with declining populations.