Do new build mortgages have different rules?

Yes. New build properties are assessed differently by lenders. Most lenders cap LTV lower on new builds than on established homes, particularly for flats. Developer incentives can affect the valuation. And because you are buying something under construction, mortgage offers need to remain valid for longer than on a standard purchase. Not every lender is set up to handle this well, which is why working with a broker who specialises in new build makes a significant difference.

How much deposit do I need for a new build?

The minimum deposit for a new build house is typically 5 to 10 percent, though many lenders cap at 85 to 90 percent LTV on new builds compared to 95 percent on resale. For new build flats, lenders are often more conservative and may require a 20 to 25 percent deposit. The exact requirement depends on the lender, the property type, and any developer incentives attached to the purchase. We will tell you exactly what you need before you reserve.

What happens if my new build is delayed?

Mortgage offers typically last six months. If the developer's programme runs late, your offer may expire before completion. We manage this proactively, liaising with the lender before the deadline to request an extension where needed. Most lenders will extend where there is good reason, but it needs to be handled well in advance rather than at the last minute. We have done this many times and know how to keep the application on track.

Can developer incentives affect my mortgage?

Yes. Cashback, stamp duty contributions, upgraded fixtures, or legal fee payments from the developer are all viewed by lenders as reducing the effective purchase price. They can lead to a lower valuation and affect how much the lender is prepared to offer. We know which incentives each lender will accept and how they need to be disclosed. Getting this wrong can cause a mortgage application to be declined at valuation stage.

New Build Mortgage Broker | Alexander Southwell

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Why New Build?

What Makes New Build Mortgages Different?

When you buy a new build property, you are often buying something that does not yet exist in its finished form. This creates challenges that do not apply to established properties: mortgage offers need to be valid for longer, lenders are sometimes more cautious about valuations, and the whole transaction moves at the pace of the developer's construction programme rather than a standard sales timeline.

If you’re looking for new build mortgages and planning on buying a new build home, Alexander Southwell Mortgage Services are your perfect mortgage advisers.

We have processed 2000 new build mortgages over the last few years as we have work with some national UK house developers.We understand that getting a new build mortgage is a big commitment, so our experts are on hand to talk you through the options available to you and support you during the application process.

They have plenty of experience dealing with new build mortgages and our advice won’t cost you a penny, so get in touch today and find out what AS Mortgages can do for you.

"Get mortgage advice before you visit a development, not after. Being mortgage-ready from the start gives you confidence, impresses the developer, and means you can reserve with confidence when you find the right plot."

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Blank Canvas

Put your own stamp on the property from day one: no unwanted décor or layout compromises.

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Energy Efficient

New builds meet the latest energy standards, meaning lower utility bills and a smaller carbon footprint.

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10-Year Warranty

Most new builds come with a full 10-year structural warranty, giving you peace of mind from the start.

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No Chain

Buying new means no property chain to slow things down or cause stress during the purchase process.

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Developer Incentives

Developers often offer incentives such as stamp duty contributions or reduced legal fees to attract buyers.

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Government Schemes

Several government schemes exist to make new builds more affordable, especially for first-time buyers.

In-Depth Guides

Everything You Need to Know

We have broken down the new build buying journey into focused guides. Explore each topic in detail, from understanding what makes new build mortgages different, to government schemes, buying off-plan, and comparing new build versus resale.

New Build

Using Government schemes to help buy a new build home

Many government schemes are available for first time buyer & Homemovers, a lot of these are aimed at specific groups of people, like local residents or certain people who earn under a certain wage.

After speaking to one of our expert mortgage brokers we will be able to tell you which new build scheme will be available for you and what purchase price you can look up to.

Please Note: Help to Buy Equity Loan will close to new applications on 31 October 2022.

Shared Ownership

The shared ownership scheme was introduced by the government to help families on lower incomes to become home owners. Shared ownership homes are provided through the housing association.

They work by offering buyers a share of the property ownership and you will need to pay rent on the remaining share. Typically you can buy between 25% and 75% of the property value.You’ll need a mortgage to help buy the share of the property, but much like the government’s help to buy scheme you can put a smaller than average deposit down, a lot of the time you will only require a 5% deposit instead of forking out a much larger deposit like 10% to 20%. This is based only the part of the property that you are purchasing and not the full price.Over time, buyers have the opportunity to increase the share of the property they own, either by borrowing more from the lender and increasing the size of their mortgage or by making a large cash payment, this process is known as “Staircasing”.

Incentives

Some property developers have been known to offer incentives if you buy their property. These can include: wavering stamp duty, reducing legal fees, for example.

Developers tend to do this rather than reduce the price of the property, and these incentives can work well with first time buyers who are looking to cut costs wherever possible.

Some lenders have issues with certain incentives and how they are used, with our vast experience within the new build sector we will make sure we proceed with the right lender for you.

Why use a specialist

How a New Build Mortgage Broker Helps You Buy

Before Alexander Southwell, I spent four years working as a specialist new build mortgage broker, sitting alongside the sales teams on some of the busiest developments in the south. The same problems came up week after week, and nearly all of them could have been avoided with the right advice at the start. Here is what we actually do for you when you buy one of the new homes going up near you.

How new build mortgages work

A new build mortgage is a normal residential mortgage, but lenders apply stricter criteria because the property is brand new and has never been sold before. Most banks and building societies will lend on new build homes, but they often cap the loan to value lower, look closely at the price, and want to know about every incentive the developer is offering. Your offer also has to stay valid until the home is finished, which can be months away.

The right mortgage, not just the cheapest rate

The best deal on paper is not always the right mortgage for a new build. A slightly higher rate with a nine or twelve month offer can be far better than a cheaper deal that runs out before completion. We compare mortgage products from across the market, including mortgage deals from lenders that only work through brokers, and match them to your build date, your deposit and your income.

Deposits on new build homes

Some lenders now go up to 95% on new build houses, but plenty still cap it at 85% or 90%, and new build flats are usually lower again. That can mean a bigger deposit than you would need on older properties. We know which lenders are going highest on new homes right now, so you are not caught out after you have paid a reservation fee.

First time buyers and new homes

Most people buying on a new development are first time buyers, and several schemes only apply to new build homes. We will tell you straight whether a scheme helps you or whether a standard mortgage works out better, and explain when you would start paying back anything you borrow through it. Our guide to government support with new build covers each option.

Exchange deadlines and off plan purchases

Developers usually want you to exchange contracts within 28 days of reserving. If you are buying off plan, completion could be six months or more after that. We get your application in quickly, keep your solicitor and the sales office updated, and sort out offer extensions before they are needed. Our new build buying process guide walks through every stage.

Credit history, self employed and trickier cases

If your credit history has a few marks on it, you are self employed, or a chunk of your income is bonus or overtime, the list of mortgage options gets shorter. It does not disappear. Over the past two years we have placed plenty of cases like this, and we know which lenders will look at the whole picture rather than just a score.

What about self build mortgages?

Self build mortgages are a different product altogether. They release money in stages as you build your own home, rather than paying a developer in one go on completion. If you are building rather than buying from a housebuilder, talk to us first and one of our expert advisers will explain how stage payments and valuations work.

Reserving a plot soon? Speak to us before you pay the reservation fee, not after.

Call 03300 432 428

We are fee free on over 90% of cases. Where a fee does apply, it is £299 on mortgages under £100,000 or up to £995 on more complex or adverse cases, and we always tell you before any work starts.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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New Build Mortgage Broker You Can Trust