"It is really encouraging to see growing interest from younger generations, who are exploring alternative routes to homeownership in today's challenging market."
- Tony Hall, head of business development at Saffron
There is higher interest in, and demand for, custom-build from younger generations, according to new research from Saffron for Intermediaries. 64% of 18 – 24-year-olds would consider or have considered custom-build, compared to only 21% of those over 55.
The building society surveyed more than 2,000 consumers from the UK, half of which had considered or would consider custom-building their own home. The study explored their knowledge of custom-build, what they considered to be the benefits and drawbacks, and the perceived barriers to custom-building properties.
35% of those aged between 18 and 24 said they were aware of the Right to Build register, compared to only 17% of those over the age of 55. The Right to Build register is a way for local authorities to keep track of individuals and groups interested in self-building or custom-building in their area. Under the Self- and Custom-Build Act 2015, local authorities must ensure there is adequate land provision for anyone looking to build their own home, as per the register.
The study also highlighted that 42% of respondents between the ages of 18 and 24 were able to pick out the correct definition for custom-build, compared to 34% of those over 55.
The growing awareness of custom-build may signify that younger people are exploring alternative routes to home-ownership – something which lenders and brokers can tap into.
Lack of awareness holding back custom-build
More broadly, however, a lack of awareness around custom-build is holding back the market, and brokers, lenders and customers are missing out as a result.
Only 39% of respondents were able to accurately pick out the description of custom-build.
Of those who are considering or have considered custom-building their own home, 34% didn’t know what the Right to Build Register was, and only 28% had actually signed up. Saffron says this is not only an issue of awareness, but is also the result of barriers and constraints to joining the registers imposed by local authorities. The consequence is that the registers don’t accurately reflect demand so the Government and industry cannot respond appropriately.
There were also a number of misconceptions from respondents about custom-build. For example, respondents tended to think custom-build projects would be more expensive than they actually are, estimating that the average two-bedroom, custom-build house would cost £248,000. In reality, these types of projects could cost as little as £190,000, depending on the design and the quality of materials used.
24% of respondents also thought that taking on a custom-build project would be too much hassle, despite the fact that for custom-build, buyers don’t need to manage the project themselves and can be involved in it as little or as much as they like depending on the project type they choose.
With 28% of respondents saying they would be more attracted to custom-build if they had more information on how it works, correcting these misconceptions could unlock greater demand for custom-build, and support the Government’s housebuilding targets.
Tony Hall, head of business development at Saffron for Intermediaries, commented: “Custom-build housing offers a significant opportunity to help meet the Government's housebuilding objectives and provide prospective homeowners with tailored, affordable options. However, our study shows that awareness and understanding of custom-build remains low, with many consumers unsure about the process and benefits.
“That being said, it is really encouraging to see growing interest from younger generations, who are exploring alternative routes to homeownership in today's challenging market. For lenders and brokers to harness this potential demand, raising awareness is key. We must bridge the knowledge gap through targeted information and guidance, helping consumers understand how custom-build can meet their needs and fit their lifestyle.
“For brokers and lenders, this presents a valuable opportunity to expand their business by supporting customers in achieving their homeowning dreams through custom-build projects."
