First-Time Buyer New Build Mortgage
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First-Time Buyer New Build Mortgage
What are the requirements for getting a mortgage on a new build as a first-time buyer?
Obviously, there are the standard requirements that apply to any mortgage – income, credit history, deposit and affordability.
There can also be slightly tighter criteria for new build properties – but that has relaxed a lot in recent years. Specifically on new build flats, some lenders have different deposit thresholds. The minimum deposit generally is 5% but lenders like Halifax, Barclays and Nationwide will request more – while Santander, Skipton and a few others will still accept 5% [information correct at the time of recording in December 2025].
New build houses don’t usually have the same criteria as flats. A lot of developers set reservation deadlines which mean we need to work quickly. But if you do find a new build property you like, we will discuss all the details with you.
How much deposit do I need for a mortgage on a new build?
There are definitely lenders that consider a 5% deposit on new build flats and houses for first-time buyers. But to have a larger lender pool, we usually want at least 10% deposit on a house and up to 15% on a flat.
It depends on what you’re looking to do, plus affordability and credit history. It’s definitely possible with 5%, so it’s worth a conversation.
Also, some developers offer incentives on new build homes. They might gift 5% equity or offer parking spaces – a multitude of things. There are schemes out there specifically for new builds as well, depending on the developer.
I suggest to my clients that they send me a link to a new build property they like. I’ll see if there are any schemes that might apply and run the figures.
Can I use government schemes to buy a new build?
There are definitely schemes out there – some developer-specific ones and some government ones.
An example is shared ownership, where instead of buying 100% of a house, you can buy a share. You might buy 50%, and then the other 50% is owned by the local authority or a housing association. You pay a mortgage for 50% of the house, and rent for the other 50%.
There’s also the First Home scheme, the Mortgage Guarantee Scheme, and Deposit Unlock, which I won’t go into too much. Sometimes developers gift deposits or give you a discounted rate. It’s worth having a chat with us to see what schemes are available and whether that will work for you.
What types of new build properties can I get a mortgage for as a first-time buyer?
Not many properties are unavailable to first-time buyers. New build homes are absolutely fine.
To open up the largest lender pool, you’re looking at a 10% deposit, but 5% is definitely doable. Some developers will gift you a 5% deposit – so if you’ve got 5%, they top it up to 10%. That can definitely help.
Flats can have stricter criteria where some lenders require slightly higher deposits. Again, it’s possible at 5%, and more lenders are getting into that space. Flats are usually sold on a leasehold basis, which means there’s additional liability for ground rent and service charges. Your solicitor will look at the details of the lease.
You may find unique or quirky properties out there that require a slightly specialist approach. But most people buy standard houses and flats – and there will almost definitely be a lender out there for you.
What should I consider when choosing a mortgage adviser for new build properties?
You want someone that knows what they’re doing, is experienced and has good reviews. Maybe someone you know has used them before.
Look for someone that’s proactive and good with developers’ timelines, who knows how to appease them and potentially get extensions. A mortgage offer from a lender is normally valid for six months, and sometimes we do need to get them extended.
The adviser needs knowledge of new building incentives and how they work, so they can explain them to you. They should also be able to pre-check any valuation risks.
With new builds, clients often send me a link and I’ll have a look. Sometimes new builds can overlook or sit on top of commercial premises. They may potentially have cladding and other specifications that could be looked at closely by lenders. I never try to discourage people, but I will make them aware of anything unusual to look out for.
We know where the schemes are, how they work and which lenders are okay with them. You might not be aware of these or understand quite how they work, and we’ll explain everything.
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Are there any special considerations for first-time buyers around new build properties and getting a mortgage?
There’s a whole array of developers out there – massive ones, and those only working on specific smaller plots. Lots of things can come into play.
Mortgage offers may expire before completion. When you reserve a property, it might take 12 months for the property to be built. If we’ve started the mortgage process and that offer is valid for six months, we will have to extend the offer or potentially reapply.
From our perspective, there’s no cost to that and the solicitors we deal with won’t charge you for another application. The main thing is just timeframes, and potentially getting up-to-date documents at the time of extension or reapplication.
Developers may pressure you for a quick exchange, and we pacify them. We get things moving as quickly as possible and we have good internal connections. We like to think everyone here is experienced and proactive, and the team gets offers out pretty quickly.
Any incentives from developers need to be declared to lenders, and they may reduce your maximum borrowing as a result. Gifted deposits, parking spaces included in the purchase price, things like that – we can cover that case by case.
Other things to consider include checking the developers have the appropriate warranties. Certain builders haven’t got the best reputation, which is worth knowing.
What are the pros and cons of buying a new build home?
The pros of a new build include lower running costs because they’re more energy-efficient. You usually have a 10 year structural warranty; you can customise them; they’re chain-free. It’s only you and the developer in the transaction, which makes it simpler.
One drawback is potentially higher prices. There can potentially be a premium to have a brand new home. It can be slightly more cost-effective to go for an older property.
There can also be snagging issues when you first move into the property that need fixing by the builder. But usually that work is completely free for the first two years.
How long does the mortgage process for a new build take? Are there any differences if you are a first-time buyer?
The mortgage offer is what we’re aiming for. An offer states that the lender’s willing to give you the money and fund the purchase of the property. That usually takes two to three weeks.
We’ve had cases much quicker than that, but that’s a rough estimate.
Completion or moving in can be delayed due to builder deadlines. We may need to arrange an offer extension. Most developers I’ve dealt with are pretty good around timeframes. Getting extensions or reapplying for a mortgage isn’t stressful – we just need updated documents.
The big benefit for first-time buyers in buying from a developer is that there’s no chain involved. In that regard, it’s usually a lot less stressful. The thing that takes the time is getting the house built, but you could also reserve a property that’s already built. It all depends.
How do I get a mortgage on a new build as a first-time buyer?
First you get an Agreement in Principle or Decision in Principle to secure your plot. We have a chat and work out what you can do. We produce a document to show the developer that you’re serious and can have the mortgage and you then reserve the property with the developer.
Usually, you pay a reservation fee to secure that house, and then no-one else can make offers on the property. We put the mortgage application in with the lender and they arrange a valuation, look at your income and credit.
Once we’ve got an offer, where the lender says they are happy to give you the money for that property, the solicitor does legal checks on planning, warranty, lease terms and searches.
You exchange contracts, and you’re now legally liable for the property. That usually happens within 28 days. If the property is not built, you wait for the build to be completed. We do final checks and at completion you collect the keys and move in.
After that, there may be some snagging reviews with the developers – that’s the standard process. The only thing that changes is the timeframe.
How can a mortgage broker help here? Any final thoughts?
We’re here to help on affordability, credit and deposit advice. We make sure you understand the developers’ incentives, ensure we meet their deadlines and navigate valuation risks.
We’re there in your corner with your best interests at heart. When you’re buying a property, it’s easy to feel a bit lost. We give you honest, objective advice – I’m biased, of course, but I always recommend having a broker to support you.
Key Takeaways:
- While a 5% deposit is generally the minimum for a new build, having 10% for a house and up to 15% for a flat will open up access to a larger pool of lenders. New build flats often have stricter deposit criteria.
- Various schemes like Shared Ownership, First Home scheme, and Deposit Unlock can be used, and developers often offer incentives (e.g., gifted deposits, parking); however these must be declared to lenders and may reduce your maximum borrowing.
- A mortgage offer typically takes two to three weeks but is only valid for six months. Since new builds can take up to 12 months to complete, you may need an offer extension or reapplication, which your broker can facilitate.
- The process starts with an Agreement in Principle (AIP) to secure the plot, followed by reserving the property, submitting the mortgage application, and then the legal checks and contract exchange (usually within 28 days).
- An experienced mortgage adviser is crucial to help with affordability, meeting developer deadlines, navigating potential valuation risks, and understanding the complex array of new build schemes and warranties.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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