Table of Contents
1. Introduction
2. What Are New Build Mortgages?
3. How New Build Mortgages Differ from Standard Mortgages
4. Common Challenges with New Build Purchases
5. How the Bank of Mum and Dad Can Help
6 Government Schemes Supporting New Builds
7 Tips for Securing the Best New Build Mortgage
8 How EHF Mortgages Can Help
Introduction
The property market is always evolving, and with more new developments appearing across the UK, new build mortgages are becoming an increasingly popular route to homeownership. According to the National House Building Council (NHBC), over 150,000 new homes were registered in the UK in 2023 alone (NHBC). However, purchasing a new build property brings its own set of considerations, particularly when it comes to securing the right mortgage.
What Are New Build Mortgages?
New build mortgages are specialist mortgage products designed for buyers purchasing a newly constructed property. A new build is generally defined as a home that has been newly built within the past two years and not previously occupied. Lenders often have different criteria for these properties, including stricter loan-to-value (LTV) limits, tighter completion deadlines, and valuation processes that account for potential price fluctuations.
How New Build Mortgages Differ from Standard Mortgages
Securing a new build mortgage can be slightly more complex than obtaining a mortgage on an existing property. Depending on the type of property you wish to buy, the deposit can be as low as 5%, and often mortgage lenders will offer different products specific to the new build market. Buyers need to be aware that buying a new build home could mean that you are paying more to purchase a similar sized property compared to a previously owned option, there is a premium for new.
Developers often set strict deadlines for exchange of contracts, the point where you are committed to purchase. This is typically 4-6 weeks from when you reserve your property, which can add pressure to secure a mortgage offer that lasts long enough to meet their timelines. Some lenders offer special new build mortgage products with extended offer validity periods of up to 9 months to account for these challenges. It is important to discuss the dates for both exchange, and likely completion, to ensure your mortgage offer reflects this timescale
Common Challenges with New Build Purchases
One major challenge with new builds is “snagging” – minor defects that need to be corrected after moving in. It’s essential to have a professional snagging survey completed to identify issues early. Mortgage valuations can also be tricky, as the premium pricing for new homes sometimes means that properties initially lose value before stabilising, impacting future remortgaging opportunities. Working with a broker who understands the nuances of new build mortgages is crucial.
How the Bank of Mum and Dad Can Help
With high property prices and large deposit requirements, many first-time buyers turn to the Bank of Mum and Dad to assist with purchasing their first home. According to research from Legal & General, family lending now accounts for over £10 billion of housing market activity annually (Legal & General).
Parents or grandparents can help by:
Gifting a deposit
Offering a secured loan against their own property
Acting as a co-applicant on a mortgage. Some lenders even offer special products designed for family-assisted purchases, helping first-time buyers bridge the deposit gap and access competitive new build mortgage rates.
Government Schemes Supporting New Builds
Several government schemes are available to help buyers secure new build mortgages, including:
- Shared Ownership schemes, where you purchase a % of the property and you rent the remainder. Over time you can increase your % ownership to 100% of the property
- Own New – a mortgage option that give you the opportunity to buy a new build at reduced interest rates, depending the deposit amount.
- First Homes Scheme, offering discounts for key workers and first-time buyers These initiatives can lower deposit requirements and make homeownership more accessible, but it’s vital to understand eligibility and repayment obligations. Help to Buy Schemes – GOV.UK
Tips for Securing the Best New Build Mortgage
Negotiate with developers: Sometimes developers will contribute towards stamp duty, deposit, or offer property-based incentives.
Start early: Get a mortgage agreement in principle before you reserve a property.
Work with a specialist: Choose a broker familiar with new build mortgages.
Understand your timescales: Ensure your mortgage offer is valid long enough to cover build delays.
Budget for additional costs: New builds often have reservation fees and higher valuation costs.
How EHF Mortgages Can Help
At EHF Mortgages, we specialise in securing the right new build mortgage for your needs. Whether you’re a first-time buyer relying on the Bank of Mum and Dad, an experienced mover, or someone using a government scheme, we provide expert guidance from application to completion. As independent mortgage advisers, we search the whole of market to find competitive deals and help you navigate every challenge unique to new build properties.
We also offer advice on protection products such as life insurance and income protection insurance, helping you secure your future alongside your new home. Our team covers Essex, East Anglia, London, and across the UK, giving you peace of mind wherever you plan to buy.
Ready to get started? Contact EHF Mortgages today to discuss your new build plans and secure the
See what we are saying in the PRESS.
Further Reading:-
