Self builders advised to sell up first

Posted: 20 May 2008 10:01:32 GMT

Homeowners wanting to undertake a self-build project have been warned against releasing the equity in their existing property to finance the construction.

Homeowners wanting to undertake a self-build project have been warned against releasing the equity in their existing property to finance the construction.

Homebuilding, the online portal for Homebuilding and Renovating magazine, has warned that, in the current climate, it would be more prudent for homeowners to sell their existing home first.

Jason Orme, editor of Homebuilding.co.uk, explained that releasing equity in one property to finance another would leave homeowners "doubly exposed if the market does crash."

Mr Orme explained: "Traditionally, what a lot of people have done is lived in their house and released the equity to get their self-build started, and really carried two mortgages on two properties at once."

According to Rightmove's May House Price Index, released yesterday (May 19th ), the average asking price for a property that has just come on the market has risen by 1.2 per cent from April to May.

Despite the downturn in the housing market, Rightmove's pricing Index shows the average asking price is now at a record high of £242,500.

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