Buying off-plan means committing quickly and completing slowly. Developers typically want exchange within 28 days of reservation, while the property itself may not be finished for six to twelve months. Most mortgage offers last three to six months, so the offer can expire before you can use it. Handling that gap is the single most important part of a new build purchase, and it is why the choice of lender matters more here than almost anywhere else.
The offer expiry problem
If your offer expires before completion, it has to be re-issued — which means a fresh credit check and reassessment against current criteria and current rates. Some lenders offer extended validity specifically for new builds, holding the offer for longer than standard. Choosing one of those at the outset avoids a scramble later.
Deposit and loan-to-value
- Many lenders cap new build houses at a lower loan-to-value than second-hand homes
- New build flats are often capped lower still
- Developer incentives — paid stamp duty, cashback, white goods — can reduce the value a lender will lend against
- Deposits paid to the developer at reservation are usually part of, not additional to, your total deposit
The valuation question
New builds carry a price premium in much the same way a new car does. Surveyors sometimes value below the purchase price, which leaves you to bridge the difference in cash. It is worth understanding what comparable resale properties on the same development are achieving before you commit.
Warranties and what they cover
Lenders require a recognised structural warranty — NHBC or an equivalent — usually running ten years. Check which one applies and that it's in place, as a missing or unrecognised warranty will narrow your lender choice considerably.