Most self-build mortgages in Devon pay out after the work is done, which leaves the builder to find the money first

by Hannah Reeve Self-Build Mortgages
A part built detached house in the Devon countryside, blockwork walls with fresh timber roof trusses open to the sky and a stack of bricks on churned ground

There are 2,640 people on self-build registers across the ten Devon planning authorities, and the single question that decides whether their project starts is not planning and not the plot price. It is whether their lender pays before the work or after it.

Almost all of them pay after. On an arrears basis the lender releases each tranche once a stage has been completed and revalued, because the finished work is the security. Suffolk Building Society, one of the smaller societies active in this market, sets the position out plainly: the most common method is in arrears, which means “you must ensure you have adequate funds to finance the work upfront first”. Advance products exist, where money arrives before the stage is built, but the society notes they are less common and typically priced higher, because the security for the loan does not yet exist.

For a household in Okehampton or Holsworthy building a house rather than buying one, that distinction is the whole project.

How many Devon households this affects

The Right to Build registers are a statutory record of people who want a serviced plot in a given district. The Ministry of Housing, Communities and Local Government published the ninth base period on 5 September 2025, covering 31 October 2023 to 30 October 2024.

Planning authority On the register at 30 October 2024 Added during the year
Teignbridge 755 20
South Hams 611 49
West Devon 252 10
East Devon 241 11
Mid Devon 185 22
Exeter 182 21
North Devon 158 5
Torridge 97 5
Plymouth 95 13
Torbay 64 2

MHCLG Right to Build registers monitoring, ninth base period, published 5 September 2025.

Teignbridge and South Hams between them hold more than half of Devon’s registered demand. Nationally there were 64,851 individuals on registers at the end of the period, against 4,302 planning permissions granted for serviced plots across all of England, a figure down 18% on the year before. Demand is not the constraint. Serviced plots and stage-payment cashflow are.

East Devon is the district that does this differently. It operates a local connection test and splits its register into two parts, and as its planning policy pages explain, the council’s legal duty to permission plots relates to the numbers on Part 1 only. Applicants who meet the general criteria but fail the local connection test go on Part 2 and are counted for demand but not for the duty.

What arrears costs in cash on a Devon build

Take a project in Teignbridge with an all-in figure of £400,000 for plot and build, against an average detached price in that district of £480,980 in June 2026 on the Land Registry UK House Price Index. Split into six stages, the arrears model asks the household to fund each one in full before the lender releases anything against it.

Stage Cost Cash the household must find first
Plot purchase £120,000 £120,000
Foundations and slab £55,000 £55,000
Wall plate £85,000 £85,000
Wind and watertight £75,000 £75,000
First fix and plaster £40,000 £40,000
Completion £25,000 £25,000

Illustrative stage split on a £400,000 project. Stage boundaries and amounts vary by lender and by build contract.

The plot is the hard part. £120,000 has to be found and held before a single release, and nothing is recovered until the foundations are signed off. A household with the deposit but not the working capital has a project that cannot start, whatever the paper affordability says. On an advance basis that first bridge disappears, which is why those products exist at all and why they price higher.

Bar chart of a 400,000 pound Devon self-build split into six stages, showing 120,000 pounds for the plot, 55,000 for foundations, 85,000 to wall plate, 75,000 to wind and watertight, 40,000 for first fix and 25,000 to completion

Build costs are rising into a falling market

The awkward part of the arithmetic in 2026 is that costs and values are moving in opposite directions across much of the county.

Devon’s average property price was £304,968 in June 2026, down 0.1% on the year, and South Hams fell 6.8%. Only East Devon, up 3.5%, and Torridge, up 3.9%, made meaningful ground. The lender indices for August 2026 disagreed with each other on direction, which is its own warning about relying on any single measure. Meanwhile the BCIS General Building Cost Index rose 1.4% between the first and second quarters of 2026, annual growth of 3.8%, and its five-year forecast published on 6 July 2026 puts building costs up 13.1% and tender prices up 15.5% by the second quarter of 2031.

Dr David Crosthwaite, chief economist at BCIS, summarised the position in that forecast: “Rising energy and materials costs are creating renewed inflationary pressure across the construction supply chain, but weak demand remains the dominant force in the market.”

For a self-builder that cuts both ways. Contractors competing for work in a contracting market, forecast to shrink 2.7% this year, may quote keenly. But the fixed price they quote is fixed against materials that BCIS expects to keep climbing, and on a build running eighteen months the risk sits with whoever signed up to absorb it.

The counterweight

Arrears is not simply the lender being difficult. Releasing against completed, revalued work is what allows a society to lend at all on a site with no house on it, and it is a genuine protection for the borrower too, because it stops money being drawn for stages that never get built. It also means interest accrues only on what has been released, so a staged drawdown on a year-long build costs materially less in interest than borrowing the whole sum on day one.

The households that get caught are not the ones who chose the wrong product. They are the ones who budgeted for the cost of the house and not for the cost of the gap.

Frequently asked questions

What is the difference between arrears and advance stage payments? Arrears means the lender releases funds after a stage is finished and revalued. Advance means the funds arrive before the work is carried out. Arrears is the common model.

Why are advance products more expensive? Because the lender is releasing money against security that does not yet exist. Suffolk Building Society makes this point directly, and it is the reason the panel of lenders offering advance terms is small.

How many people are on Devon’s self-build registers? 2,640 across the ten Devon planning authorities at 30 October 2024, with Teignbridge at 755 and South Hams at 611.

Does East Devon treat registrations differently? Yes. It runs a local connection test and a two part register, and the council’s duty to permission plots attaches to Part 1 only.

Updated on 11 September 2026.

Sources

This article reports on how self-build finance is structured. It is not financial advice.