Buying a new build home: A complete guide
Want to buy a new build home in the UK but unsure where to start? Our guide outlines buying process, including the benefits of a new build and any pitfalls.
Key Takeaways
New build homes offer energy efficiency, modern features, and access to government or developer-backed schemes that can make buying more affordable
Potential mortgage delays, snagging issues, and complex warranties mean research and legal advice are essential
Government schemes like First Homes and Shared Ownership, can significantly reduce upfront costs, but each comes with specific eligibility criteria
Management or estate fees may still apply even to freehold homes, so always clarify all ongoing costs before committing
Buying a new build property in the UK offers the promise of modern design, energy efficiency, and a blank canvas for your new home
However, the process differs from buying an existing property and there are key points to understand before deciding on a new build.
Research new build developers thoroughly
Your new build home will only be as good as the developers that built it, so investigate the reputation of developers by:
Reviewing past projects. Visit completed developments to assess build quality
Checking online reviews. Platforms like Trustpilot, HomeViews and the Home Builders Federation provide insights into customer experiences
Engaging with current residents. Speak to homeowners in existing developments about their experiences, including any issues and how they were resolved
Explore government and developer help to buy schemes
There are several initiatives that can assist new build home buyers, even if you’re not a first-time buyer. These include:
The First Homes scheme is a government-backed initiative aimed at helping first-time buyers and key workers purchase a new-build home at a discount of 30–50% off the market value.
These homes are only available through participating developers in England and must be the buyer’s main residence. The discount is passed on to future buyers, ensuring ongoing affordability.
You must be a first-time buyer, have a household income under £80,000 (£90,000 in London), and be purchasing a property valued at £250,000 or less (£420,000 in London) after the discount.
Local councils may apply additional criteria like living or working in the area.
The Own New Rate Reducer scheme is a developer-supported mortgage initiative designed to lower monthly payments. It involves developers contributing funds (often 3–5% of the purchase price), which are passed to the mortgage lender to effectively buy down your mortgage interest rate. This results in lower monthly repayments for the initial fixed-rate period (typically 2–5 years).
Available to all types of buyers purchasing new-build properties with participating developers and lenders. There are no income caps, and buyers must pass affordability checks with the lender. It is particularly useful in a high-interest environment to improve affordability short-term.
Deposit Unlock is a scheme created by the Home Builders Federation (HBF) and reinsurance provider Gallagher Re, enabling buyers to purchase a new-build home with just a 5% deposit. It’s open to both first-time buyers and home movers, and it applies to properties from participating developers.
The scheme works by providing lender insurance to reduce the risk of low-deposit lending, which means buyers get access to 90–95% loan-to-value mortgages at competitive rates.
It’s open to anyone buying a new-build home up to £750,000, subject to lender affordability assessments. Participating developers and mortgage lenders must be used.
The Lifetime ISA is a government savings product that helps people save towards their first home (or retirement). You can deposit up to £4,000 per year, and the government adds a 25% bonus, up to £1,000 annually. The money can be withdrawn penalty-free to buy your first home after 12 months of saving.
You must be 18–39 years old when opening the account. The home must cost £450,000 or less, and the LISA must be used with a residential mortgage, not a buy-to-let. You must be a first-time buyer and intend to live in the home. Withdrawals for other reasons incur a 25% penalty.
In addition to official schemes, many house builders offer their own incentives to attract buyers. These come on a case-by-case basis and may include:
Covering a portion of your mortgage for the first 6–12 months
Paying 5–10% of your deposit
Covering your Stamp Duty Land Tax (SDLT)
Furniture packs or upgrades, including white goods and flooring
The developer buying your current home directly to facilitate a move
First Homes scheme
Own New Rate Reducer
Deposit Unlock
Lifetime ISA (LISA)
Developer incentives
Freehold vs leasehold: Know what you're buying
Before committing to a new build property, it’s vital to understand whether it is being sold as freehold or leasehold, as this affects your rights, responsibilities, and long-term costs.
With a freehold property, you own both the building and the land it stands on outright. There are no ongoing ground rents or service charges.
In contrast, a leasehold property means you own the building for a fixed term, but not the land it’s built on.
This arrangement is more common with new-build flats, but some new-build houses have controversially been sold leasehold too.
As a leaseholder, you may face:
Ground rent charges (although these are now banned for most new leases in England and Wales)
Service charges for communal areas and maintenance
Restrictions on alterations or subletting
Lease extension costs in future decades
Always ask the developer whether the property is leasehold or freehold and review the lease terms carefully with your solicitor.
Beware management fees
Buyers of new-build homes – whether leasehold or freehold – should be cautious of estate or management fees, which cover the upkeep of communal areas like roads, green spaces, or lighting.
These charges can apply even to freehold properties and are often uncapped, meaning they can rise unpredictably and are usually managed by a private company rather than the local authority.
Budget for additional costs
Beyond the deposit, consider you may also have to pay additional fees such as:
Stamp Duty Land Tax (SDLT)
Legal fees
Mortgage fees
Surveys
Removal costs
Obtain a Mortgage Agreement in Principle (AIP)
An AIP gives you a clear idea of how much you can borrow, making you a more credible buyer. It's typically valid for 60–90 days and can be obtained from banks, building societies, or mortgage brokers.
Getting a mortgage for a new-build property can be more complicated due to factors like build delays, which may cause your mortgage offer to expire before the home is ready.
If you're buying off-plan (i.e. before construction is complete), lenders may be cautious about valuing a property they can’t inspect yet, and you might need to reapply or extend your mortgage offer if the build overruns its expected timeline.
Engage a solicitor or conveyancer early
Choose a legal professional experienced in new-build transactions to ensure the terms are fair and your interests are protected.
They will conduct necessary searches on planning permissions, local developments, and environmental factors and help manage the timelines and financial transactions. You can find out more about the role of a conveyancer with our guide.
Understand the warranty
New build homes in the UK should come with warranties that should cover any issues that arise in the years after the sale. The most common warranty is the NHBC Buildmark, which provides a 10-year cover divided into:
During the first two years after legal completion, your builder is responsible for rectifying any defects arising from their failure to meet NHBC's Technical Standards. If the builder fails to address these problems, NHBC's Resolution Service can intervene to ensure necessary repairs are made.
From the third year onwards, the warranty provides insurance cover for specific structural defects such as problems with foundations, roofs, or load-bearing walls. It's important to note that this period covers only damage resulting from breaches of NHBC's Technical Standards.
Years 0–2
Years 3–10
Other providers offer similar 10-year warranties, but coverage details can vary, so review your specific policy documents carefully.
Remember, these warranties do not replace standard home insurance, which is necessary to cover risks like fire, theft, or accidental damage.
Note the reservation fee
When you're ready to secure a new-build home, you’ll typically be asked to pay a reservation fee, usually between £500 and £2,000.
This fee holds the property for a set period and is usually deducted from the final purchase price. However, it's important to check whether the fee is refundable and how long the cooling-off period lasts, in case you change your mind or encounter delays.
Arrange insurance
You're responsible for insuring the property from the time your exchange contracts.
Challenges with new builds can include new addresses not being immediately recognised by insurers and the Royal Mail may need to be contacted to make sure the address is on its database.
As well as buildings insurance, you might also want to take out contents insurance from the day you move in.
Conduct a snagging survey
Even new homes can have defects. A snagging survey identifies issues for the developer to rectify. Common snags include:
Paintwork Issues such as drips, cracks, or uneven finishes
Plumbing problems, from leaks or poor water pressure
Electrical faults, including non-functioning sockets or switches
Doors or windows that don't close properly
Surface damage from scratches on glass to gouges in countertops
While you can check for these yourself, a professional snagging company can be hired, especially if you're unfamiliar with construction standards.
Settle into your new home
As well as registering utilities such as gas, electricity, water, and council tax, and updating your address with banks, employers and friends and family, you should also keep an eye out for any defects or problems with the property – and report them to the developer or warranty provider when spotted.
What are the advantages and disadvantages of buying a new build home?
There are pros and cons of buying a new build, and it often comes down to personal preference:
Everything is brand new, so repairs and maintenance should be minimal in the early years
Most new builds come with a 10-year structural warranty for peace of mind
You can often choose finishes, fixtures, and upgrades to suit your taste
New builds are usually more energy efficient, helping to keep utility bills down
There’s no upward chain, reducing the risk of the sale falling through
Government schemes and developer incentives can make them more affordable
New builds may come at a premium compared to similar older homes
Room sizes and storage space can be smaller than in period properties
Properties may lose value, especially if bought at the peak of a development
Completion delays can occur, especially with off-plan purchases
Snagging issues and build quality concerns may arise post-completion
Freeholders may still face estate management fees for shared spaces
Advantages
Disadvantages
Personal Finance Expert
Our expert says
Buying a new-build home can offer energy efficiency, low maintenance, and access to government schemes or developer incentives, particularly for first-time buyers. However, buyers should be cautious of potential downsides, including premium pricing, smaller room sizes, and delays in completion, especially with off-plan properties. A new build isn’t always the perfect fit, but with due diligence, it can be a smart and secure investment.
Compare mortgages with MoneySuperMarket
Looking for a first-time buyer mortgage to take your first step on the property ladder? It’s easy to find and compare mortgages from a range of leading lenders with MoneySuperMarket.
Whether you’re looking for a fixed-rate, a tracker, or a discount mortgage, our mortgage comparison tool can help you find a great deal for you.
We’ll just ask you a few questions about the property you’re looking to buy or remortgage and how much you’ll need to borrow.
We’ll then show you results including the initial interest rate and your monthly repayments and any product fees you’ll be asked to pay.
