If you’re thinking about buying a new build home, then it’s worth understanding how new build mortgages work, as the process is slightly different from getting a mortgage on an older house. But don’t worry, it’s not drastically different, and we’re here to run through everything you need to know in this article.

So, what is the definition of new build?

Let’s start from the top and explain exactly what makes a new build home, a new build. A ‘new build’ property is a home that hasn’t been lived in yet. It may be ‘off-plan’, which means it either hasn’t been built yet or is in the process of being built. Or it may be a newly built home that’s finished and ready to move into but hasn’t been bought yet.


Why you need to be organised

 You’ll often only have 28 days (sometimes less!) to exchange after you’ve put down your reservation fee. This means you’ll need to move quickly and be organised. One way to get ahead of the game is to speak to a mortgage adviser before you even start looking at houses, as knowing which mortgage you need will help speed things up.


Pros and cons of buying a new build

Like most things in life, there are always pros and cons to weigh up before deciding if a new build home is right for you. We’ve put together a list to help you make your decision:


  • Peace of mind - Most new build homes come with a 10-year protection warranty issued by the National House Building Council (NHBC) should there be any major defaults in the building work.
  • No upward chain- When you buy a new build home, you don’t need to worry about it falling through because a buyer has pulled out further up the chain. This usually means the process is less complicated.
  • Lower energy bills- New build homes are typically more energy efficient than older houses, so hopefully you’ll be able to save money on your energy bills.
  • Blank canvas- When you move into your new build home it’ll be freshly decorated and ready for you to put your own stamp on it. You won’t need to worry about ripping out a bathroom suite you don’t like or repainting rooms you don’t like the colour of. Plus, with some new builds you can choose things like the kitchen, so it’ll be exactly as you want it.


  • You’ll pay a premium- New build houses are typically more expensive than older homes. This makes them a good investment if you’re planning to live there for a long time, however if you sell after just a few years, you could lose money.
  • Reservation fees- Unlike when you buy an older property, most developers will need you to put down a reservation fee to secure your plot.
  • Delays- If you choose to buy a home before it’s been built, be aware that there could be delays in your home being finished that are out of your control


Housing schemes: what’s available for new builds?

Whilst doing your research, it’s a good idea to find out what schemes are available to help you secure your dream home.


The three main schemes are:

  1. Help to Buy Equity Loan - The government lends you up to 20% of the value of the house you’re buying (up to 40% if in London) You’ll need at least a 5% deposit, and you’ll take out a mortgage for the rest. However, regional price caps apply on the value of house you can buy through this scheme, up to a maximum of £600,000 in London.*
  2. Shared Ownership- You buy a share of a house of between 10%-75% and then pay rent on the remaining share. After you’ve moved in you can buy a larger share of your home. This is known as ‘staircasing’.
  3. Deposit Unlock- This is a new scheme devised between the housebuilding industry and lenders. It allows you to buy a new build home worth up to £750,000 from participating home builders with a 5% deposit.


Can you help me buy a new build?

Yes! If you’re interested in buying a new build and want to find out more information about new build mortgages, we have a team of experts here to answer all your questions. Plus, they’ll help you find the right mortgage for you too. 


*There are different Help to Buy equity loan schemes for England, Greater London, Wales and Scotland. They all vary; this information relates to England and Greater London only.