Have you been thinking about building your own home? You might want to consider looking into Modern Methods of Construction (MMC), which utilises offsite production and could offer a faster and cheaper alternative to traditional brick and block construction.
What is MMC?
MMC is the new generation of prefabricated housing but vastly different to the prefabs used to rebuild housing stock following WWII. MMC schemes are being used by both developers and owner-occupiers who want to benefit from the cost and time savings of mass production, but retain flexibility and control over their build.
It’s not all about brand new builds, as you could utilise MMC if you have an existing property on site which you are converting or even knocking down and rebuilding.
Some of the mainstream MMC systems include:
- Closed-Panel Systems: these are entire walls which come complete with cladding, doors, windows and ducting for wires/pipes. They are then transported to the site and lifted into place using a crane.
- Open-Panel Systems: this is where the external cladding and joinery is fitted on site, without using a crane, which is useful when access is restricted .
- Structural Insulated Panels (SIPs): these provide excellent energy efficiency as the walls and roof are made from solid slabs of insulation. This idea came to the UK from America in 2000.
- Oak Framing: oak frames are quickly erected and encapsulated with highly insulated panels, often constructed off-site.
The government is supporting MMC to address the UK’s chronic shortage of housing. The Autumn Budget 2017 said “the government will use its purchasing power to drive adoption of modern methods of construction, such as offsite manufacturing” and the Office of the Deputy Prime Minister and the Housing Corporation stated it is “… a process to produce more, better quality homes in less time.”
How to finance a self build project using MMC
Self build mortgages have been around for a number of years, offering finance for the ‘yet to be built’. Many self build lenders will consider homes built using MMC schemes, such as the mortgages on offer from Ipswich Building Society.
According to the Building Societies Association, “building societies are generally receptive when it comes to accepting MMC as suitable security for mortgage purposes, particularly those that lend in the self-build market as they are more experienced in assessing the potential risks of non-standard construction types.”
A self build project can seem like a big task so if you are in any doubt about the financial side of things, or which mortgage is best, you should consider seeking advice from a specialist mortgage broker.
It’s also useful to know that many lenders will need you to have a comprehensive outline of your project before you make a mortgage application. Whilst each lender will have their own criteria, here are five things you’ll need to consider:
- Finding a suitable plot of land
- Obtaining planning permission
- Having detailed plans of the property drawn up
- A realistic projection of costs
- The deposit you have saved and how much you need to borrow
Although not required by all lenders, you may also wish to consider whether your chosen build scheme is accredited through the Build Offsite Property Assurance Scheme (BOPAS). This means the scheme has been through a durability and maintenance assessment, guaranteeing that properties will be sufficiently durable and readily saleable for a minimum of sixty years.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE