Popular Scotland Self Build Loan Fund reopens to help make self build finance more accessible

Couple looking at plans on building site
(Image credit: Getty Images)

The Scotland Self Build Loan Scheme has reopened to help those aspiring to build their own home in the country. Applicants who been refused finance elsewhere can apply for a loan of up to £175,000 to help them build their dream home.

The Self Build Loan Fund was first set up in 2018, and 41 loans have since been issued to families under the scheme, worth a total of £6.2m.

The scheme had been set to close to new applications on 31 August 2022, but the Scottish government announced that the scheme would be extended for an additional five years to meet ongoing need and demand.

The scheme reopened for applications on 21 November 2022. Here's how it works, how to apply and more.

What is the Scotland Self Build Loan Fund?

The Scottish government says that the Self Build Loan Fund is designed to help people self build who are unable to access mainstream self build finance, as well as to support the delivery of high quality, energy efficient housing and offer people more choice about the homes they want to live in.

Ronnie MacRae, CEO of the Communities Housing Trust, which will administer the scheme on behalf of the Scottish government, said: “We’ve seen demand rise as conditions become even more challenging for people to build their own home. In many cases, families just need a bit of extra support and are fully able to build and then repay the loan.

“Self build remains an important option for many, particularly in areas where no other options exist, so we are extremely grateful to the Scottish government for continuing to provide the fund.”

How does the Scotland Self Build Loan Fund work?

Eligibility for the Scotland Self Build Loan Fund will based on factors such as the applicant providing evidence that they cannot access standard lending to cover the construction of their home.

The Scottish government says these loans can be particularly useful, for example, to those living in ‘remote’ locations such as the Highlands and Islands, where mortgage lenders may be less willing to lend. Alternatively those looking to downsize, or gifted land, where obtaining a self build mortgage has proved difficult, may also benefit.

If you are eligible, you will then need to pay an administration fee of £895 to secure a maximum loan of £175,000, which has an interest rate of 5.5% (9% for those in default). 

The loan specifically covers the construction phase of the home, so you must already own a plot or have a contract in place to buy the land. Planning permission must be in place too, and a building warrant will be required before work can start. 

Participants will be able to agree a repayment period based on the nature of their project, but there is an initial payment period of three years to 31 August 2025. 

All loans unpaid after this period must then be repaid by 31 August 2026 through a mainstream mortgage once the project is completed, or through equity following the sale of an existing home. 

The scheme reopened for applications on 21 November 2022. Full details regarding how to apply are available on the Communities Housing Trust website.

Are similar schemes available in the UK?

In England the Help to Build scheme has been running since June 2022, which provides self builders with an equity loan of up to £600,000 to cover the cost of a plot and the construction of a new home. 

The scheme is designed to help those with smaller deposits, who would likely find it difficult to access finance, to build their own homes. Applicants will need a deposit of just 5%. 

And in Wales, Self Build Wales provides a package of financial support, access to land, and planning permission. Applicants need to pay 25% of the cost of a plot, with the remaining 75% covered through a self build development loan issued by the Development Bank of Wales, which also covers the full cost of building the property. 

Jack Woodfield
News Editor

Jack has worked in journalism for 11 years and is the News Editor for Homebuilding & Renovating, a role he has had since 2019. He strives to break the most relevant and beneficial stories for self builders, extenders and renovators, including the latest news on the construction materials shortage and hydrogen heating. In 2021 he appeared on BBC's The World at One to discuss the government's planning reforms. 


He enjoys testing new tools and gadgets, and having bought his first home in 2013, he has renovated every room and recently finished a garden renovation.