First-Time Buyer New Build Mortgage
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First-Time Buyer New Build Mortgage
Kelly McGarry explains how the new build mortgage process works for first-time buyers.What are the requirements for getting a mortgage on a new build as a first-time buyer?
The requirements are very similar to first-time buyers in general. We’ve actually done a podcast on this already, so check that out.
To get a mortgage on a new build property as a first-time buyer, you would need to be a UK resident over the age of 18. You need to have a deposit saved – and you may need slightly more deposit on a new build than on a second-hand home.
A good credit history is always ideal, but some lenders are okay with a little bit of adverse credit – that’s something that we can look into.
You also need to earn an income that fits with lenders’ affordability criteria. Typically, they lend around 4.5 to five times what you earn. That’s the case whether you’re salaried, self-employed or a contractor.
How much deposit do I need for a mortgage on a new build property? Any differences here for first-time buyers?
There may be some slight differences when we’re looking at deposit sizes for a new build property. It’s possible for first-time buyers to apply for a mortgage with just a 5% deposit – and actually some lenders will go to 2% and even 0%.
But lenders tend to consider new build homes as a bit more risky, and so they often limit the Loan to Value ratio. It means you probably need around 10% to 15% deposit for a new build house, and for a new build flat you could be looking at as much as 15% to 25%.
Some first-time buyer incentives may be available on new builds just like second-hand property, but lower deposits are something lenders are quite stringent on.
Some lenders accept a ‘builder’s gifted deposit’ and other cash incentives as part of the deposit. This is normally capped at 5%, however, and you would still need to contribute a minimum of at least 5% on top of that.
The reason lenders class new builds as higher risk is because they often fall in value once they’re owned and lived in. If a lender has to repossess a new build property they can sometimes be harder to resell – often because the wider development is still ongoing and there are high levels of competition for buyers.
We can always discuss deposits with clients in more detail if you want to know more.
Can I use government schemes to get a mortgage on a new build?
Yes, absolutely. There are standard government schemes like the Stamp Duty Land Tax relief, where you pay less tax as a first-time buyer. There’s shared ownership, where you buy a portion of the property and then rent the rest. There are also Lifetime ISAs, where the government matches your savings for a house deposit by up to 25% or £1,000 per year.
These schemes all apply whether you’re buying a new build property or a home that’s been lived in before. There’s also the First Home Scheme, specifically designed for first-time buyers, where new build homes are sold at a discounted price. The discount is usually 30%, but it can go up to 50%.
That discount stays with the property when you sell – so bear that in mind if you plan to move in the future. The First Home scheme is usually run by local councils who sometimes prioritise certain buyers like key workers.
Again, this is something that we could look into with you based on your specific circumstances [information correct at the time of recording in February 2026].
What types of new build properties can I get a mortgage for as a first-time buyer?
You can get a mortgage on most new build houses or flats as a first-time buyer. Any type of new build house is usually fine from a lender’s perspective, whether it’s terraced, detached or semi-detached.
Flats can be more challenging for lenders, as they could come with short leases, high service charges and ground rent clauses. That’s why lenders tend to cap their Loan to Values and require a higher deposit.
It’s worth paying attention to the construction methods used in new build properties, as this can also impact how comfortable a lender may be to offer on a mortgage. The size of the development overall can also have an impact.
If there’s a large number of identical units on the site, the lender could view this as a high concentration of the same property type, which makes it harder to sell that property if they had to repossess.
What should I consider when choosing a new build mortgage advisor?
Experience is crucial. Make sure the advisor you’re working with has previously sourced mortgages for clients on new builds. It’s important that your advisor knows what to look for, and will discover any issues with the property itself early on. At Mortgage Style we have over 100 years’ experience in mortgages across our team. There aren’t many types of case or property purchase that we haven’t seen before. Another thing to check is that the mortgage broker has strong working relationships with lenders. Good links with business development managers (BDMs) mean that the broker is always kept up to date on lending criteria. We can always pick up the phone to a BDM and discuss cases before submitting an application, to ensure that the process goes as smoothly as possible.
At Mortgage Style we meet with different lenders most weeks to ensure that our knowledge is as up to date as possible. It means we can pinpoint the right lender quickly for our clients. Another important point is to pick an advisor that can access a wide range of lenders, as they can then find a lender for any property or situation. Many in-house estate agency brokers are tied to a limited panel of firms, but we’ve got access to literally thousands of mortgages. Plus, there are some occasions where we can get exclusive rates that aren’t available direct – and sometimes not to other brokers, either.
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Are there any special considerations or terms and conditions for a first-time buyer on a new build property? What are the benefits and drawbacks of new build homes?
Firstly, it’s the deposit. Given the higher risk to lenders from a resale perspective, you do tend to need a bigger deposit on a new build, whether you’re a first-time buyer or not.
Another thing is valuations. These can be quite conservative on new build properties – especially when comparing with second-hand properties nearby. The valuer might decide there’s an inflated asking price, boosted by developer incentives.
If your valuation comes back lower than the price you’ve agreed to pay for the property, the lender will base their decision on the revised value – and might actually lend you less. You would either need to increase your deposit to cover the shortfall, or renegotiate the price you’re paying for the property.
Incentives are another key area. Some lenders are a little dubious about developer incentives offered to buyers, which might include Stamp Duty being paid or your legal fees being covered. The developer could potentially overinflate the price to account for things like this being tacked on.
It’s best if the value of incentives offered by developers stays below 5% of the asking price. It’s something we always need to declare upfront to lenders on the application, as it could otherwise impact their decision later down the line.
There can be downsides around application and completion practicalities. New build projects can easily overrun, and your new property might not be ready until after the expiry date of your mortgage offer. This can be resolved, but it’s something to bear in mind when considering a new build.
How long does the mortgage application process take for a new build property?
The mortgage application process itself is the same, no matter what kind of property you’re buying or what type of buyer you are. You could be making your first purchase or your 21st – it makes no difference.
Any offer made by the lender typically takes around two months to come through, once all the paperwork is submitted. With new builds, problems can sometimes arise when the property that you’re buying isn’t ready to complete before the mortgage offer expires. Typically, mortgage offers last six months from when they are issued.
Certain lenders actually have new build specific products which come with a longer expiry date. Otherwise, we are sometimes able to extend mortgage offers for new build properties – it’s lender-dependent. For lenders where we’re not able to extend that mortgage offer, we may need to submit a new application.
This is where working with a mortgage broker can be a real benefit – because we’ll already have all your details on file. We can resubmit the application on your behalf quickly and efficiently. It could be with the same lender who gave you the offer the first time, or there could potentially be a more cost-effective option at that point with a new lender.
How do I get a mortgage on a new build property as a first-time buyer? What’s the process?
We would recommend speaking to a multi-award winning mortgage broker like ourselves. After a conversation to understand your needs and goals, we would send you a link to our secure client portal, where you can provide details about your finances and upload any documents that we’ve asked for.
From there, we can get you a Decision in Principle, which is a document from a lender confirming that they would, in principle, lend you a certain amount of money. This is useful when buying a home as it shows the estate agent or vendor that you’re serious about the purchase and you have the funds ready to back up your offer.
If your offer is accepted, we would research thousands of mortgage deals and recommend some that suit your specific situation. When you’ve reviewed our advice and are happy to go ahead, we would make the mortgage application on your behalf.
If there are then any delays or queries raised, we act as the go-between and pick those up on your behalf. We can also link with anyone else involved in the purchase, like your solicitor and surveyor.
You’ve demonstrated how a mortgage broker can help throughout this episode. Have you got anything else to add?
Just to summarise, using a mortgage broker can save you time and reduce stress. Researching mortgage products and comparing lenders can be time-consuming and confusing, especially for first-time buyers.
As industry experts, we keep up to date with a wide range of lenders and products, so we can quickly identify suitable options for you. We also have access to competitive deals that may not be available on the high street, giving you more choice and potentially better value.
With that visibility across a range of lenders, we can really tailor recommendations to your individual needs and circumstances. It’s our role to give you greater peace of mind, by offering clear impartial advice that’s always in your best interests.
We’re not tied to any lenders, so our recommendations are based solely on what’s right for the client. There’s no bias. We also help you make informed choices about insurance, to protect yourself and your family when purchasing a home.
Key Takeaways:
- Lenders consider new build properties to be higher risk, meaning first-time buyers often need a larger deposit, typically 10% to 15% for a house and up to 15% to 25% for a flat.
- First-time buyers can benefit from government initiatives, including standard schemes like Lifetime ISAs and the First Home Scheme, which provides new build homes at a discounted price, usually 30% to 50%.
- Valuations for new builds can be conservative, potentially resulting in the lender basing the loan on a revised, lower value, which would require the buyer to cover the shortfall or renegotiate the sale price.
- New build construction delays often mean the property is not ready before the standard six-month mortgage offer expires, necessitating a mortgage offer extension or a full re-application.
- When choosing an advisor, look for one with specific experience in new build mortgages, who maintains strong relationships with lenders.
YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP TO DATE WITH YOUR MORTGAGE REPAYMENTS.
A fee may be payable if we progress your application. Our average fee is around £200 and the maximum you may pay is £995 for Retirement Interest Only mortgages.
Mortgage Style Ltd, trading as Mortgage Style, is an appointed representative of HLPartnership Limited, which is authorised and regulated by the Financial Conduct Authority.