7 November 2012 Last updated at 19:06 ET

DIY homes should be made easier, says housing minister

By Kevin Peachey Personal finance reporter, BBC News

A significant amount of time and experience is needed to build a home

Homeowners should not consider it a "pie in the sky dream" to build their own property, according to the new housing minister.

Mark Prisk told mortgage lenders that self-built homes should be considered as one way to boost the UK housing market.

He said that only about 10% of new UK homes were self-built, compared with 60% in France and Germany.

But homebuilders and lenders said this would only ever be a niche market.

Building fund

Self-build has become more prominent through television shows such as Grand Designs and generally they involve an owner buying a plot of land and then hiring an architect to design a property.

Mr Prisk reaffirmed the government's push for self-built homes at a conference in London organised by the Council of Mortgage Lenders.

He said that the UK was also well behind countries such as the US where 45% of new homes were self-built.

'Borrowing became more difficult'

A group of residents in Ashley Vale, in Bristol, were worried about the redevelopment of a former scaffolding site in the area.

So they formed a not-for-profit community action group which bought and developed the site itself.

When building work began on 20 self-built homes in 2001, the people involved had no trouble raising the finance.

Borrowing became more difficult when five bungalows were built about five years ago.

But in the third phase of the project two years ago, they only secured mortgages for flats and a community space when the building work was completed.

Despite the increasing difficulty in securing finance, Johanna Nicholls, who chairs the group, said that they were looking for new plots to build more affordable homes.

The government has set aside a £30m investment fund to promote self-build. Sites in North East Derbyshire and Peterborough have recently been approved for a slice of the funding.

The opportunity for individuals and communities to build their own homes was now a realistic option, he said, and lenders should give them the chance.

"I'm not pretending self-build is the entire answer, but it is an element I want to encourage you to incorporate," he told the audience of mortgage lenders.

'Crisis'

He said that the number of self-build mortgage products had increased.

However, the fact that these still numbered just over 20 meant that many in the industry only regarded this as niche part of the market, and nothing like sufficient to make a dent in the housing shortage.

"We welcome everyone building houses," said Stewart Baseley, of the Home Builders Federation.

"There is plenty of room on the pitch for all these balls to be kicked about. But self-build is not the solution that will solve the housing crisis."

Mark Clare, group chief executive of Barratt Developments, the UK's biggest housebuilder, said that self-built homes still needed to be financed and expertise needed to put them up.

He said that there would be a one million shortfall of homes by the end of the year.

Some 110,000 homes were being built, but 250,000 new households were being created, as people lived for longer and got married later.

"This is going to get worse before it gets better," he said.

Mr Baseley said that three times as many homes were built in the 1950s and 1960s, about half of which were for council housing.

"We are in the midst of a housing crisis," he said.