Ready to reserve? Let’s get the mortgage moving.

What counts as a new build?

In simple terms, it is a newly constructed home being sold for its first occupation. However, lenders may also class recently converted or substantially refurbished properties as new builds, so their definitions can vary.

Most new build homes come with an approved structural warranty, such as NHBC Buildmark. This usually combines an initial builder warranty with longer-term insurance for certain structural problems. The protection is not unlimited, so it is important to understand exactly what the policy covers.

Depending on the stage of construction, you may also be able to choose elements such as kitchen units, flooring or bathroom finishes. Developers sometimes offer incentives too, including deposit contributions, help with Stamp Duty or upgraded fixtures and fittings.

All incentives must be declared to the lender and could affect the amount they are willing to lend.

Why buy a new build?

• Less immediate maintenance. Everything is new, although you may still find snagging issues that need to be corrected.
• Better energy efficiency. Modern insulation, heating and construction standards could mean lower energy bills than in an older property.
• Warranty protection. An approved warranty provides protection against certain problems with the building work.
• No onward chain. You are buying directly from the developer, so there is no seller waiting to move elsewhere.
• A home you can personalise. Buying early enough may allow you to choose some of the finishes before construction is complete.

Why can the mortgage be more complicated?

Some lenders apply stricter loan-to-value limits to new builds, particularly flats. Mortgages with a 5% deposit are available on certain new-build properties, but this will depend on the lender, property type, purchase scheme and your circumstances.

The lender will also consider:

• The property’s construction and warranty
• Whether it is a house or a flat
• Any developer incentives you are receiving
• The lease terms, service charges and ground rent
• Whether the property is complete or being purchased off-plan
• Whether the mortgage offer will remain valid until completion

This is where using an adviser who understands new builds makes a real difference. We will identify suitable lenders, check the criteria before applying and present the application correctly from the outset.

The reservation deadline

This is the part that catches buyers out.

Developers commonly ask you to exchange contracts within 28 days of reserving. That does not leave much time to arrange the mortgage, valuation and legal work- especially if documents are missing or the application goes to the wrong lender.

If the property is still being built, the expected completion date matters too. Mortgage offers have expiry dates, and construction delays could mean an extension or a new application is needed.

Talk to us before you reserve and we can check your affordability, arrange an Agreement in Principle and help you prepare everything in advance. When the right plot becomes available, you will be ready to move.

Apply online or call us on 01225 258900 for a friendly, no-obligation chat.