Introduction.
Many new homes are sold off plan, sometimes years before they are built. Some original buyers sell their place before completion.
That sale is a contract reassignment, or assignment. The original buyer passes their purchase contract with the developer to a new buyer, who then completes the purchase when the building is finished.
Assignments can give buyers access to homes in developments that have sold out. They also bring extra checks: the developer must usually agree, lenders must see every payment, and only some lenders will consider them.
This guide explains how reassignments work, how lenders assess them and what to have in place before you agree a price. Please take legal advice from a solicitor experienced in assignments, and tax advice where relevant.
Lenders must see every payment between buyer, original buyer and developer. Nothing can be agreed on the side.
01What a reassignment is.
In an assignment the original buyer, the assignor, transfers their rights and duties under the purchase contract to a new buyer, the assignee.
Who is involved
| Party | Role |
|---|---|
| Developer | Sells the home and must usually consent to the assignment |
| Assignor | The original buyer, who exchanged contracts and paid a deposit |
| Assignee | The new buyer, who takes over the contract and completes |
| Lender | Lends to the assignee at completion, with full disclosure |
Why assignments happen
- Change of plans. The original buyer moves, relocates or can no longer complete.
- Value has risen. The home is now worth more than the original price.
- Investors. Some investors buy off plan intending to assign before completion.
- Access. Buyers get homes in developments that have otherwise sold out.
Adviser’s note
The assignee takes on the original contract, including the completion date and the developer’s terms. Read it before you agree a price.
02Is the contract assignable?
Not every new-build contract can be assigned. Your solicitor should check this before anything else.
What to check in the contract
| Point | What to look for |
|---|---|
| Assignment clause | Whether assignment is allowed at all, and on what terms |
| Developer consent | Usually needed in writing, often not before a set stage of sales |
| Fees | An administration fee, often a fixed sum or a percentage of the price |
| Marketing limits | Some developers forbid advertising the home while they are still selling |
| Completion date | The long-stop date, and what happens if the building is late |
Timing matters
Assignments usually complete when the building is finished. If completion is close, there may be little time to arrange consent, legal work and a mortgage offer.
Ask for the paperwork first
Ask the assignor for the purchase contract, the developer’s consent terms and the expected completion date before you agree a price.
03Why lending is specialist.
Lenders treat assignments carefully because the price a buyer pays can differ from the price the developer agreed. Fewer lenders accept them, and they ask more questions.
What lenders look at
- The real price. The total the assignee pays, to both the developer and the assignor.
- Valuation. Lenders lend on the lower of the price and the valuation.
- Disclosure. The developer completes the UK Finance Disclosure of Incentives form, showing any incentives and the assignment.
- Fraud checks. Lenders check every party, every payment and where funds come from.
- New-build limits. Lower maximum loan to value on new homes, especially flats.
| Typical new-build limits | Max loan to value |
|---|---|
| New-build house | Up to 90% to 95% |
| New-build flat | Often 85% |
| Buy-to-let | Often 75% |
Typical market limits; each lender sets its own. Fewer products are available for assignments.
Full transparency
Any side payment, cashback or price reduction not shown to the lender can amount to mortgage fraud. Every figure must appear in the paperwork.
04How the money works.
The assignee pays the assignor for the contract, then pays the developer the balance of the original price at completion.
An example
| Amount | |
|---|---|
| Original contract price | £400,000 |
| Deposit the assignor paid at exchange | £40,000 |
| Agreed premium for the assignment | £20,000 |
| Assignee pays the assignor | £60,000 |
| Assignee pays the developer at completion | £360,000 |
| Total price for the assignee | £420,000 |
The assignee repays the assignor’s deposit and pays a premium on top. Illustrative only.
The mortgage
If the home is valued at £430,000, the lender lends on the lower figure, the £420,000 total price.
When the money moves
The assignee often pays the assignor when the assignment completes, before the mortgage funds are released. Plan where these funds come from with your solicitor and with us.
05Stamp duty and tax.
HMRC treats the assignee as the buyer of the home, paying stamp duty on everything they pay for it.
For the assignee
Stamp duty is charged on the total consideration: the balance paid to the developer plus the amount paid to the assignor.
| On a total of £420,000 | Stamp duty |
|---|---|
| Standard rates, moving home | £11,000 |
| First-time buyer relief | £6,000 |
| Additional property | £32,000 |
England and Northern Ireland rates from 1 April 2025. Scotland and Wales have their own taxes. Source: HMRC Stamp Duty Land Tax Manual, SDLTM21590.
For the assignor
- Stamp duty. The assignor does not normally pay stamp duty on a contract they assign before completing; relief is available.
- Profit. A premium may be subject to capital gains tax, or income tax if HMRC sees the activity as trading.
- Records. Keep the contract, receipts and consent documents.
Take tax advice
Stamp duty and tax on assignments depends on the facts. Your solicitor and accountant should confirm the position before you commit.
06Step by step.
From first conversation to keys in hand, an assignment has more stages than a standard purchase.
Speak to us early
We check which lenders accept assignments for your circumstances and how much you can borrow.
Review the contract
Your solicitor checks the assignment clause, consent terms, fees and completion date.
Agree the price
Agree the premium with the assignor and put every figure in writing.
Developer consent
The assignor applies to the developer, who confirms consent and its fee.
Mortgage application
We apply with full disclosure. The developer completes the Disclosure of Incentives form.
Valuation and offer
The lender values the home and, if satisfied, issues a mortgage offer.
Deed of assignment
The contract is formally assigned to you. You pay the assignor as agreed.
Completion
When the home is finished, the mortgage funds the balance to the developer and you collect the keys.
07If you are the original buyer.
If your plans have changed before completion, an assignment is one option. There are others.
Your options
| Option | Points to weigh up |
|---|---|
| Complete as planned | You may still be able to borrow if your circumstances have changed; talk to us early |
| Complete and let | Needs buy-to-let or consent-to-let lending |
| Complete and sell | Costs stamp duty and sale fees, but gives you the widest market |
| Assign the contract | Needs developer consent and a buyer who can obtain specialist lending |
If you assign
- Check your contract and the developer’s consent rules first
- Expect to disclose every figure to the buyer’s lender
- Allow for the developer’s fee and your legal costs
- Take tax advice on any premium
Don’t let a deadline pass
If you cannot complete on time you may lose your deposit. Speak to your solicitor and to us as soon as your plans change.
08A reassignment, illustrated.
A first-time buyer taking over an off-plan flat
The original buyer relocated abroad and agreed to assign their contract on a £400,000 flat, with completion due in four months.
- Price
- £40,000 deposit repaid plus a £20,000 premium: £420,000 in total
- Valuation
- £430,000; the lender lent on the £420,000 price
- Mortgage
- £357,000 at 85% loan to value with an assignment-friendly lender
- Stamp duty
- £6,000 with first-time buyer relief
- Outcome
- Developer consent in three weeks, offer before practical completion, keys on the day the building was finished
This example is illustrative and does not describe a real client.
09Checklist and glossary.
Before you agree a price
- A copy of the original purchase contract
- The developer’s written consent terms and fee
- The expected and long-stop completion dates
- A breakdown of every payment to assignor and developer
- Proof of your deposit and where it came from
- An agreement in principle from an assignment-friendly lender
- A solicitor experienced in assignments
- Your stamp duty figure confirmed
Glossary
- Assignment
- Transfer of a purchase contract from one buyer to another.
- Assignor
- The original buyer who passes on the contract.
- Assignee
- The new buyer who takes over the contract.
- Premium
- The amount paid to the assignor on top of their deposit.
- Off plan
- Buying a home before it is built.
- Disclosure of Incentives
- The UK Finance form a developer completes for the lender.
- Long-stop date
- The latest date by which completion must happen.
- Deed of assignment
- The legal document that transfers the contract.
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