You are making a mountain out of a molehill on this. No policy is needed. Anyone wishing to self build will have to find a plot of land first. They will then have to apply for planning permission and meet building regulations the same as anybody else would. All the council has to do is NOT to discriminate against such applications. From the self-builders point of view, negotiating the VAT maze is far more of a problem. New builds are zero rated but everything they buy will have VAT on it. The only way to claim back the VAT is to form a company and register it for VAT but that is difficult when it has no trading history and will only complete one project. This is all for central government to sort out, not local councils.