New Build Mortgages
A new build mortgage is not an ordinary mortgage with a newer house attached. Four things work differently: how long the offer lasts, whether the surveyor agrees the developer’s price, how the incentives are counted against your loan, and what warranty the property carries.
- Offer validity against build slippage
- Down-valuation on a developer price
- The 5% incentive cap, explained properly
- Warranties, the Code and the Ombudsman
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Why a new build needs a different conversation
England added 208,600 homes in 2024-25 and 91% of them were new build completions, so this is the majority of the housing that comes into existence each year rather than a niche. The mortgage, though, works differently from a second-hand purchase in four specific ways: the deadline, the valuation, the incentives and the warranty.
Offers Expire, Builds Slip
The Valuation Gap
The Warranty Decides
The 5% incentive cap, and why it matters more than it sounds
Developer incentives are not informal arrangements. They are declared on the UK Finance Disclosure of Incentives Form, which the seller completes on every newly built, converted or renovated property and passes to the lender’s conveyancer as standard, and to the valuer on request. The current version has been compulsory since August 2018 and cannot be altered or substituted. It covers the tenure and the method of construction as well as the incentives, with explicit lines for stamp duty contributions, deposit paid by the seller, cashbacks, legal fees and any other financial incentive.
Lenders then cap the total package. Virgin Money, Nationwide, Leeds Building Society and Accord all publish the same limit: 5% of the purchase price or valuation, with anything above that deducted from the price before the loan to value is worked out. Several also refuse incentives entirely above 90% loan to value.
So a generous-looking package of flooring, white goods, stamp duty and a deposit contribution can quietly reduce what you are able to borrow. Work an example: on a £350,000 plot with a £10,000 incentive, a lender working to 85% may lend 85% of £340,000 rather than of £350,000 — £8,500 more deposit than you budgeted. Total the incentives before you agree them, not after the lender does it for you.
How much of the market is new build, and what the paperwork adds
England added 208,600 net additional dwellings in 2024-25, a 6% fall on the 221,410 of the year before. Of that total, 190,600 came from new build completions — 91% of all net additions — with 17,710 from change of use, 3,850 from houses converted into flats and 1,080 from other gains, against 4,630 lost to demolitions. So new build is not a side market: it is the overwhelming majority of the housing that comes into existence each year, and it is where a large share of first purchases now happen.
Housing supply figures on this page are taken from the government’s accredited official statistics on net additional dwellings in England for 2024 to 2025. Local price figures on our county pages are drawn from the UK House Price Index and Office for National Statistics house price and private rent data. All were checked on 3 October 2026. Lender incentive caps and loan to value limits are published criteria and can change without notice. Next scheduled review: 30 November 2026.
New build pricing typically sits above the second-hand average for the same area, which is exactly where the valuation risk comes from. Two further things arrive with the paperwork rather than the price. Ground rent on a new lease is now restricted: under the Leasehold Reform (Ground Rent) Act 2022, a regulated new long residential lease granted on or after 30 June 2022 may only carry a peppercorn rent, and the landlord cannot charge an administration fee for collecting it. And where estate roads, drainage and open space have not been adopted, the management charge is committed expenditure: a lender deducts it from your income before applying an income multiple, so it reduces the maximum loan as well as the monthly budget.
Access to the Whole Mortgage Market
Our Mortgage Application Process
A clear, structured process from your initial enquiry through to completion.
Initial Conversation
We talk through what you are buying or remortgaging, your income and your timescale, and tell you honestly what is achievable.
Documents Gathered
We tell you exactly what each lender will want and collect it once, rather than drip-feeding requests later.
Whole-of-Market Search
We compare lenders on total cost over the deal period and on whether they will accept the property and your circumstances.
Recommendation
You get a clear explanation of what we recommend and why, including the costs, before anything is submitted.
Application Submitted
We submit, chase the valuation and handle underwriter queries so you are not the one waiting on hold.
Offer and Completion
We stay with the case through to offer and completion, and keep your solicitor and agent updated.
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Read More From Our Guides
The decisions that come up most often on a new build purchase.
Stamp Duty Explained
Current rates, first-time buyer relief and the surcharges that catch people out.
Large Mortgage Loans
Lending above the high street ceiling, and the underwriting behind it.
Buying a new build?
We will total the incentives the way a lender will, check the warranty against lender criteria, and pick a lender whose offer lasts long enough for the build.
Read our mortgage guide, view our frequently asked questions, or see new build advice in Essex, Kent, London, Surrey, Sussex, Hertfordshire and Buckinghamshire.
New Build and Scheme Guides
The three things that go wrong most often on a new build purchase, and the schemes most often used alongside one. Each guide sets out published lender criteria, checked October 2026.
Where to go next
The rules are the same everywhere; the local evidence is not. These pages cover what a valuer and a lender will actually see in each county.
Local pages: new build mortgages in London, Kent, Essex, Surrey, Sussex, Hertfordshire and Buckinghamshire. Building your own home instead? See self-build mortgages in London, Kent, Essex, Surrey, Sussex, Hertfordshire and Buckinghamshire.
New Build Mortgages: Frequently Asked Questions
How long does a new build mortgage offer last?
Usually six months, which is the single most common problem on an off-plan purchase, because a build can easily run longer than that. Some lenders offer nine months specifically for new build, and a handful will extend an existing offer on request. If the offer expires it has to be re-issued on whatever criteria and rates apply at that point, with a fresh valuation, so a rate you fixed eighteen months ago is not a rate you keep. The practical step is to ask, before you reserve, what your lender’s new build offer validity is and whether it will extend. Choosing a lender on validity rather than on a headline rate is frequently the cheaper decision over the life of the purchase.
What happens if a new build is down-valued?
The lender lends against the lower of price and valuation, so the shortfall comes out of your pocket rather than the developer’s. It is the most common problem on new build purchases, and it happens because new build carries a premium over equivalent second-hand stock while an early phase has almost no resale evidence behind it: the only recent sales near the plot are other plots on the same price list. Three things reduce the risk. Know the local second-hand average for the property type before you agree a price. Total the incentives, because a large package can pull the effective price down in the lender’s eyes. And keep some flexibility in the deposit, because a down-valuation is settled in cash or not at all.
Can the developer pay my stamp duty?
Yes, and it is common — but it is not free. A stamp duty contribution is declared to the lender on the UK Finance Disclosure Form, along with any deposit paid by the seller, cashback, legal fees or other financial incentive, and it counts towards the incentive cap. That cap is usually 5% of the purchase price or valuation: Virgin Money, Nationwide, Leeds Building Society and Accord all publish the same limit. Anything above 5% is deducted from the price before the loan to value is calculated, and several lenders refuse incentives entirely above 90% loan to value. So on a package worth more than 5% of the price, the part above the cap effectively becomes extra deposit you have to find. Add the incentives up before you agree them.
Do I need a bigger deposit for a new build?
Often, yes. Many lenders cap new build houses at 90% loan to value and new build flats at 85%, where an equivalent second-hand property might reach 95%. On a £300,000 new build flat that is a £45,000 deposit rather than a £15,000 one. Several lenders also refuse to count developer incentives at all above 90% loan to value, which removes the usual way of bridging the gap. And the service charge or estate management charge is deducted from your affordability before the income multiple is applied, so the same income supports a smaller loan on an estate with a charge than on one without. None of this makes a new build harder to buy; it does mean the deposit needs to be planned against new build criteria rather than against the general market.
What warranty does a lender need on a new build?
A recognised ten-year structural warranty, and lenders are specific about which providers they will accept. NHBC is the most widely accepted, with Premier Guarantee, LABC Warranty, Checkmate and Build-Zone among the others that appear on lender lists — but the accepted list differs from lender to lender, so the warranty provider can decide the lender list before income is even discussed. Separately from the warranty, since October 2022 developers registered with the New Homes Quality Board must follow the New Homes Quality Code, which replaced the Consumer Code for Home Builders. It gives you a right to a pre-completion inspection by a qualified professional, restricts high-pressure selling and early-bird arrangements, and requires a complaints procedure concluded within 56 days. Unresolved complaints go to the New Homes Ombudsman Service, whose decisions bind the developer and can award up to £75,000 for loss.
We are a whole-of-market broker, advising on new build purchases across Essex, Kent, Surrey, Sussex, Buckinghamshire, Hertfordshire and London. Alongside this page, MoneyHelper publishes free and impartial government-backed guidance on buying a home.
Have a different question? Get in touch or read our full mortgage FAQs.
Written and reviewed by Osman Emin, CeMAP, mortgage and protection adviser · FCA register OCE01003 · Updated