Why new builds need careful lending
Lenders treat new builds cautiously because they can carry a price premium that fades after purchase. Many cap the loan-to-value, especially on flats. The best new build mortgage is one from a lender comfortable with new builds, your property type, and any scheme you're using — that can also meet the developer's completion deadline.
1. New build house mortgages
Most lenders lend on new build houses at standard or near-standard LTVs (often up to 90–95%). Best for buyers of new build houses with clean credit — broadly similar to any residential mortgage.
2. New build flat mortgages
Lenders are more cautious on new build flats, often capping LTV at 75–85%, meaning a bigger deposit. Best for flat buyers who can put down more — a broker will know which lenders are most generous.
3. Scheme-linked new build mortgages
If you're using a first-time buyer or shared ownership scheme on a new build, the best mortgage is one from a lender that supports both the scheme and new builds. Best for scheme buyers — compatibility matters.
4. Mortgages that meet developer deadlines
New builds often require exchange within 28 days of reservation and completion on a set date. Best to choose a lender (and broker) who can move quickly and offer a long enough mortgage offer validity for build completion.
Key considerations
- LTV caps — especially on flats (often 75–85%)
- Valuations — lenders may value below the asking price
- Deadlines — fast exchange and offer validity for completion
- Warranties — a recognised new build warranty (e.g. NHBC) is usually required
How to find the best new build mortgage
A whole-of-market broker knows which lenders are comfortable with new build flats, schemes and developer timelines. Find a mortgage broker through Nesto — free, no obligation.
Frequently asked questions
Are new build mortgages harder to get?
Slightly — lenders are cautious, especially on flats where they may cap the loan-to-value. New build houses are more straightforward.
How much deposit for a new build flat?
Often 15–25%, as many lenders cap LTV on new build flats at 75–85%.
Why do lenders value new builds lower?
New builds can carry a premium that fades after purchase, so lenders sometimes value cautiously to protect against future falls.
Can I use a scheme to buy a new build?
Yes — first-time buyer and shared ownership schemes are common on new builds. Use a lender that supports both the scheme and new builds.
What's the rush with new build deadlines?
Developers often require exchange within 28 days, and your mortgage offer must stay valid until build completion — so speed and offer validity matter.