Buying a new build is one of the more straightforward routes onto the property ladder, or up it: a warranty on the building, no chain to manage, and a finish you don’t have to touch for years. The mortgage side works a little differently to buying an older home, and once you know how, it’s easy to plan around.
Here’s a plain-English guide to how new build mortgages work, what to ask your broker, and how to make sure your deposit and your offer line up smoothly with your completion date.
New Build Mortgage Deposits: The Numbers
On an older property, a 5% deposit is often enough to get started. New builds work on a slightly different scale, and once you know the figures, they’re easy to plan for:
- New build houses: most lenders go up to 90% LTV, so a 10% deposit is the typical minimum.
- New build flats: lenders typically cap at 85% LTV, so 15% is the usual minimum deposit.
Lenders set these slightly higher thresholds because a new build’s price includes a premium for being brand new, which settles back to the local market level over time. Building in a bit more deposit from the outset keeps your loan comfortably within the property’s long-term value, which works in your favour too.
With Help to Buy now closed, the mortgage guarantee scheme and gifted deposits from family are both widely used routes to bridge the gap, and a broker who specialises in new builds will know exactly which lenders are most flexible on this. The key is finding that out before you reserve, not after, which is exactly the conversation a good broker is there to have with you early.
Valuations: Why a Second Opinion Is Part of the Process
As part of any mortgage application, the lender arranges an independent valuation. On a new build, this sometimes lands a little below the developer’s asking price, simply because the surveyor is comparing your home to the nearest genuine resales rather than the developer’s current price list.
If that happens, the lender mortgages against the surveyor’s figure, and any gap to the agreed price can usually be covered in one of three ways: topping up from savings, renegotiating the price with the developer, or in rarer cases, walking away with your reservation fee intact at the early stages. Plenty of buyers close this gap through developer incentives or a small additional contribution and complete on schedule without a hitch.
It’s most useful to ask your broker, before you pay a reservation fee, how that particular development has valued historically. Brokers who work regularly with new build developments usually have a good feel for this, and it turns a potential surprise into a known quantity from day one.
Retention Clauses: A Normal Part of Buying Off-Plan
Because new builds often complete before every last communal element of the development is finished, some mortgage offers include a retention: the lender approves your full loan, but holds back a portion, typically £5,000–£15,000, until specific outstanding work, such as landscaping, communal areas, or snagging, is independently signed off.
You still complete and move in on schedule with your full mortgage in place. The retained amount is simply released to the developer once the work is verified, rather than at completion. Timelines vary, from a few months to longer on larger developments, so it’s worth asking upfront exactly what triggers release and who verifies it. Knowing this in advance means there are no surprises, just a clear checklist to follow.
If your offer includes a retention clause, your broker can talk you through exactly what it covers and what reasonable timing looks like for that specific developer, so you go into completion with full visibility.
Mortgage Offer Timing: Easy to Plan Around
Standard mortgage offers run for six months, sometimes twelve. Because new builds are often reserved off-plan ahead of an estimated completion date, and build programmes can shift, it’s worth matching your offer’s validity to your expected completion from the outset.
The good news: a number of lenders offer extended validity periods specifically for new builds, in some cases up to 24 months, more than enough to cover most build programmes. This simply needs to be flagged as a new build and requested in writing at application stage. A broker experienced in new build purchases will do this as standard, so your offer comfortably outlasts your build timeline.
New Build vs Older Property: Different, Not Riskier
Older properties bring their own considerations, such as non-standard construction, shorter leaseholds, or issues that surface at survey. New builds bring a different, and arguably more predictable, set of considerations: deposit thresholds, valuations, retentions, and offer timing. The advantage with a new build is that all four of these are well understood, lender-documented, and entirely plannable with the right broker from the outset.
Frequently Asked Questions
What is the minimum deposit for a new build mortgage in the UK?
For new build houses, most lenders ask for a minimum 10% deposit (90% LTV). For new build flats, it’s typically 15% (85% LTV). A specialist broker can point you to the lenders most willing to flex on this.
Why do new builds require a higher deposit than older properties?
New build prices include a premium for being brand new, which settles over time. The slightly higher deposit keeps your mortgage comfortably aligned with the property’s long-term value, protecting your equity position from day one.
What is a new build retention clause on a mortgage?
It’s where the lender approves your full loan but holds back a portion, often £5,000–£15,000, until specific outstanding development work is independently verified as complete. You still complete your purchase and move in on schedule with your mortgage in place.
How long does it take to get a retention clause released?
It varies by development, from a few months to longer where communal works are involved. Asking your broker upfront what triggers release and who verifies it gives you a clear timeline to expect rather than an open question.
What happens if my mortgage offer expires before my new build completes?
You’d need to reapply with updated affordability and credit checks. This is straightforward to avoid: many lenders offer extended validity, up to 24 months in some cases, for new builds specifically, as long as it’s requested at the outset, which an experienced broker will do as a matter of course.
What is a down-valuation on a new build?
It’s when the lender’s independent surveyor values the property below the developer’s asking price. Any gap is typically closed through savings, developer renegotiation, or incentives already on offer, and your broker can flag developments with a track record on this before you reserve.
Are there mortgage products specifically designed for new builds?
Yes. A number of lenders have dedicated new build ranges, including extended offer validity and competitive LTV options on houses. A broker with strong new build experience will know which lenders suit your development best and which have a track record of smooth completions.
The information contained in this blog is accurate at the date of publishing on 17.06.26.
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About the Author: Doug Hall, Director at 3mc
This article was written by Doug Hall, a Director at 3mc, one of the UK’s leading mortgage packagers, distributors and brokers. Doug has over 35 years of experience in the mortgage and specialist lending industry, giving him an unparalleled understanding of the challenges and opportunities facing landlords, brokers, and property investors across the UK. A recognised voice in the industry, Doug regularly speaks at major industry events and is widely respected by lenders, intermediaries, and fellow professionals alike. His insight is shaped by three decades on the front line of mortgage distribution, working closely with the brokers and lenders who keep the UK property market moving.