Introduction.
A new home comes with no chain above you, modern standards and a builder’s warranty. It also comes with its own rules: reservation deadlines, lender limits, incentives that must be declared and a completion date that can move.
Most of the difficulty with new build purchases is timing. The developer wants to exchange quickly, the lender wants to see the full picture first and the home may not be finished until months later.
This guide explains each stage so you know what to expect and what to have ready. We arrange the mortgage around the build programme and keep your solicitor and the sales team moving together.
A typical deadline to exchange contracts after reserving a new home. Your mortgage needs to be ready inside it.
01Why new build is different.
A new build purchase follows the same broad steps as any other, but the order and the deadlines are set by the developer.
No chain above you
You are buying from the developer, so there is no seller who needs to find their own home. If you have a property to sell, your own sale is still part of the chain.
Deadlines from the start
Developers usually expect contracts to be exchanged within a few weeks of reservation, often before the home is finished.
A moving completion date
If the home is still being built, completion happens when it is ready. That can be weeks or months after exchange.
Price and value
New homes can carry a premium over similar resale homes nearby. Lenders value carefully and the valuation may come in below the asking price.
Adviser’s note
Speak to us before you reserve. An agreement in principle and a clear budget put you in a stronger position with the sales team.
02Reservation to exchange.
Reserving takes the home off the market for a short period while your mortgage and legal work are completed.
Reserve
You sign a reservation agreement and pay a reservation fee. It is usually deducted from the price on completion, but may not be refundable if you pull out.
Day 1Instruct a solicitor
Choose a solicitor experienced in new build work. The developer may recommend one; you are free to use your own.
Within daysApply for the mortgage
We submit your application straight away, with the developer’s incentive form and the reservation details.
Week 1Valuation
The lender’s surveyor values the home, often from plans and comparable sales if it is not yet built.
Weeks 1 to 2Mortgage offer
Once underwriting is complete, the lender issues a formal offer to you and your solicitor.
Weeks 2 to 4Exchange
You sign the contract and pay the deposit, usually 10% of the price. You are now legally committed to buy.
By the deadlineIf the deadline is tight
Ask the sales team early whether an extension is possible. A short, agreed extension is far better than losing the home and the fee.
03How lenders view new homes.
Lenders treat new builds a little more cautiously than resale homes, mainly because the first sale price is untested.
Loan to value limits
Many lenders lend up to 90% or 95% on new build houses but set lower limits on new build flats, commonly 85% or less. Limits vary by lender and by development.
Exposure limits
Some lenders cap how many homes they will lend on in a single development or block. On popular schemes a lender can reach its limit, so we check this before you apply.
Valuation
The valuer compares the price with recent sales on the development and nearby. If the valuation is lower than the price, you may need a larger deposit or a price adjustment.
Incentives and value
Lenders usually base the loan on the price after deducting incentives over a set level, commonly around 5% of the price.
| Typical maximum | Houses | Flats |
|---|---|---|
| Mainstream lenders | 90–95% | 75–85% |
| Specialist schemes | 95% | 85–95% |
Illustrative ranges as at October 2026. Lender criteria vary and change often.
The incentives form
Developers complete a standard UK Finance Disclosure of Incentives Form for your lender, setting out the price and every incentive offered.
04Offers, delays & completion.
If the home is not finished at exchange, your mortgage offer needs to last until it is.
How long offers last
Most mortgage offers are valid for around six months. Some lenders allow longer for new builds or will extend an offer, sometimes subject to a fresh check of your circumstances.
Build delays
Contracts usually include a long-stop date. If the home is not ready by then, you may be able to withdraw. Your solicitor will explain the terms before you exchange.
Notice to complete
When the home is ready, the developer serves notice to complete, often 10 working days. Your funds, insurance and removals need to be ready in that window.
If your circumstances change
A new job, a change in income or new credit between offer and completion can affect the lender’s decision. Tell us before making any changes.
Snagging
Snags are small defects in finishing. Inspect the home before completion if allowed, or soon after, and report issues in writing. Many buyers use an independent snagging inspector.
- Doors and windows open, close and lock properly
- Paintwork, sealant and tiling are finished cleanly
- Heating, hot water and every socket work
- Flooring is level with no gaps or damage
- Outside areas, fences and drainage are complete
05Incentives and schemes.
Developers often offer incentives to help a sale. They can be valuable, but every one must be declared to your lender.
| Incentive | What it means | Effect on the mortgage |
|---|---|---|
| Deposit contribution | The developer pays part of your deposit | Usually counted against the price; lenders cap the level they accept |
| Paid fees or stamp duty | Legal fees or stamp duty covered by the developer | Declared as an incentive; may reduce the value the lender uses |
| Upgrades or furniture | Kitchen, flooring or furniture packs included | Usually declared; large packages may be deducted |
| Part exchange | The developer buys your current home | Removes your sale from the chain; price offered may be below market value |
| Cashback | Money paid to you on completion | Many lenders do not accept cash incentives to the buyer |
Low-deposit options
Some lenders offer 95% mortgages on new homes, including through industry schemes such as Deposit Unlock with participating developers. Availability depends on the development and lender.
Shared ownership
You buy a share of the home and pay rent on the rest, with the option to buy more later. Specialist lenders and eligibility rules apply.
06Leasehold, warranties & protections.
New homes come with protections that resale homes do not, but the legal structure still needs checking.
Leasehold flats
New flats are usually sold leasehold. For most new residential leases granted since 30 June 2022, ground rent is limited to a peppercorn, meaning zero. Service charges still apply and your solicitor will check the lease and budget.
Freehold estates
Many new houses are sold freehold but sit on estates with a management company and an annual estate charge for shared areas. Ask what it covers and how it can change.
Building warranties
Lenders require a recognised structural warranty, typically lasting 10 years. The builder is usually responsible for most defects in the first two years; the warranty provider covers structural problems after that.
The New Homes Quality Code
Developers registered with the New Homes Quality Board follow a code covering fair sales, clear information and after-care, with access to the New Homes Ombudsman Service for unresolved complaints.
The usual length of a new home structural warranty, with the builder responsible for most defects in the first two years.
07Costs at a glance.
Budget for more than the deposit. These are the costs most new build buyers meet.
| Cost | Typical amount |
|---|---|
| Reservation fee | Often £500 to £2,000 |
| Deposit at exchange | Usually 10% of price |
| Stamp duty | Depends on price and status |
| Solicitor’s fees | Quoted by your solicitor |
| Lender arrangement fee | £0 to £1,999 typical |
| Snagging inspection | Optional |
| Our fee | Typically £495 |
Illustrative only. Your exact costs are confirmed before you commit.
Stamp duty, England & NI
| First-time buyers | Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
| Above £500,000 | Standard rates |
Rates from 1 April 2025 for UK residents. A 5% surcharge applies to additional properties and 2% for non-UK residents.
Deposit timing
Your exchange deposit comes from your own funds, so plan where it will come from early. Gifted deposits need paperwork for the lender and the solicitor.
08Illustrative cases.
First-time buyers buying off-plan
A couple reserved a flat due for completion nine months later, with a 28-day exchange deadline.
- Challenge
- A completion date beyond a standard six-month offer
- Approach
- A lender with longer new build offers, applied for on the day of reservation
- Outcome
- Exchange within the deadline and an offer valid through completion
Moving up with part exchange
A family wanted a larger new home and a guaranteed buyer for their current house.
- Challenge
- A part exchange offer below market value and a deposit contribution to declare
- Approach
- Comparing part exchange with an open market sale and choosing a lender comfortable with the incentive
- Outcome
- A clear decision on the numbers and a smooth move with no chain
These examples are illustrative and do not describe real clients.
09Questions and glossary.
Questions we are often asked
Should I use the developer’s recommended broker?
You are free to choose your own adviser. An independent, whole-of-market search may find a lender better suited to you.
What if my offer expires before completion?
We ask the lender for an extension or arrange a fresh application in good time, so the gap does not hold you up.
Can I buy a new build with a 5% deposit?
Often, yes, especially for houses. Options for flats are narrower and depend on the lender and development.
Do I need a survey on a new home?
A snagging inspection is usually more useful than a full survey on a brand new home.
Glossary
- Off-plan
- Buying before the home is built.
- Reservation fee
- A fee to take the home off the market.
- Long-stop date
- The latest date the home must be ready by.
- Notice to complete
- Formal notice that the home is ready.
- Snag
- A small defect in finishing.
- Incentive
- Anything of value offered by the developer.
- Warranty
- Structural cover for a new home, usually 10 years.
- Peppercorn rent
- A ground rent of zero.
Related: First Time Buyers · All guides · Calculators