New Build Mortgages

Getting a mortgage on a new-build property can be more challenging than for existing homes. Lender policies on new builds vary significantly, with some possibly declining applications, while others may be more accommodating. The availability and terms of mortgages for new builds are not uniform across all lenders.

Mortgages for new build properties are not generally more expensive as they can be accepted on standard products. Lenders can perceive these mortgages as having a higher risk due to the potential for the property’s value to decrease initially, therefore these can require higher deposits.

There is no single minimum deposit for a new-build mortgage. Maximum LTV varies by lender, property type and scheme; some eligible new-build buyers can access products requiring a 5% deposit.

Accepted new-home warranties vary by lender. Your conveyancer and mortgage adviser should check the proposed warranty against the chosen lender’s current requirements.

Developer incentives can impact your mortgage. Incentives valued at less than 5% of the property price usually don’t cause issues. However, incentives exceeding 5% can lead to a higher loan-to-value ratio, potentially resulting in increased interest rates. It’s important to assess if an incentive truly benefits you financially.

Several schemes assist with buying a new build, including:

• First Homes: Offers a 30% to 50% discount on new build homes for first-time buyers and key workers in England, with income and property value caps.
• Shared Ownership: Allows purchasing a share of a new build and paying rent on the remainder, for those unable to afford the full price.
• Lifetime ISA: A savings account for under-40s saving for a first home, with a 25% annual government bonus.
• Mortgage Guarantee Scheme: A permanent government scheme has been available since July 2025 to support participating lenders in offering mortgages between 91% and 95% loan-to-value. Eligible buyers may therefore be able to purchase with a deposit from 5%, subject to lender criteria.
• Deposit Unlock: Enables purchasing a new build from participating builders with a 5% deposit, through mortgages from participating lenders.
• The Help to Buy: Equity Loan scheme ended on 31 March 2023 but was previously a popular option for first-time buyers.

The key difference between freehold and leasehold property relates to ownership of the land and how long you own the property for.

With a freehold property, you normally own both the property and the land it stands on. With a leasehold property, you own the property for the length of the lease while the freeholder retains ownership of the land or building.

Leaseholders may have to pay service charges and other costs set out in the lease. Most new long residential leases granted since 30 June 2022 cannot charge a financial ground rent and are generally limited to a peppercorn ground rent, although different rules can apply to older and exempt leases.

The Leasehold and Freehold Reform Act 2024 also contains further reforms affecting leasehold property, some of which are being introduced in stages.

Getting a mortgage for a new build flat can be more challenging compared to houses, with some lenders offering only up to 85% of the property’s value.

Despite flats sometimes being more affordable, lenders perceive them as riskier, especially new-build flats, due to potential difficulties in resale if repossession occurs. The presence of unsold units in the development can further devalue previously occupied flats, complicating the lender’s ability to recover funds.

A shared ownership mortgage is designed for buyers purchasing a property through the Shared Ownership scheme, which can make homeownership more affordable by reducing the initial amount needed to buy.

Depending on the property and scheme, you may be able to purchase as little as a 10% share, with a deposit starting from 5% of the share you buy. You then pay rent on the remaining share, alongside any applicable service charges and other property costs.

Also known as Part Buy, Part Rent, Shared Ownership can reduce the upfront cost of buying a home. Several mortgage lenders offer Shared Ownership mortgages, although availability and eligibility criteria vary.