New Build

New build mortgages - we’re here to help

 

Whilst there are numerous advantages to buying a new build property, such as lower running and maintenance costs, new build warranties and chain free conveyancing, there are some potential downsides to consider. 

One of these is the ‘new homes premium’, whereby you will generally pay more for a brand new home than you would for an older property of the same size in the same area. As a result of this, mortgage lending criteria tends to be stricter for new builds, due to their potential devaluation in the early years, as even newer developments pop up nearby. The loan-to-value ratio for new builds is also sometimes tiered, with some lenders requiring a larger deposit for new build flats than they do for new build houses.

There are however still options for obtaining a new build mortgage with a small deposit. The Deposit Unlock scheme, developed in collaboration with certain lenders and home builders, enables first time buyers and existing home owners to purchase a new build home with a 5% deposit, subject to criteria.

One final thing to consider is timescales. Developers often work to strict timescales and may expect you to exchange within 28 days of putting down your deposit. It can be challenging for lenders to complete your application within that time frame, which is why it pays to start the process early. Conversely, in the case of off-plan developments, delays on the part of the builders could result in your mortgage offer expiring, as most mortgage offers are only valid for a maximum of 6 months. This is where using one of our independent advisers is invaluable, as we are experienced at navigating the new build mortgage market and can assist with extensions where available, or help streamline the process should you need to re-apply.

Book a free consultation with one of our friendly advisers, who can talk you through your options.

TIP: if buying off-plan then get the developer to agree to a ‘long-stop’ completion date. This means that you are entitled to cancel your contract and have your deposit returned in full in the event that the building works overrun beyond this date. In mortgage terms, the long-stop date is normally set at the date of the expiry of your mortgage.

 

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