Can I then pay for the materials and BBS pays for the labour and vice-versa?

Answer: 
No. As mentioned above, BBS only pays out after completion of each stage. Should one wish to make a financial contribution towards the project, it is advisable to commit those funds by either depositing them in your mortgage account, or by utilizing them in the project until they are exhausted. The rest of the project requirements will then be met by the portion from the loan.