A lower share of the price
There is no single maximum for a new-build flat. About 85% of the lower of the price and the valuation is common. Some lenders will go to 90%, and on a smaller loan some will consider 95%. A larger loan can bring that share down again. A coach house on a development is often treated as a flat, not a house. A conversion, such as a mill or an office turned into flats, can be treated as a new build and sometimes at a lower share again. We say which of those applies to the apartment you have reserved, and what deposit that means.
The lease and the block
A new-build flat is often expected to have a long lease, well over 100 years, and a ground rent that is no more than a peppercorn. A short lease, or a ground rent that rises, can stop the loan even when the deposit is fine. Cladding and fire safety can hold a valuation, particularly in a taller block. Lenders also limit how many homes they will take on one development. A flat can be declined because that lender is already full on the site, not because of your income. Those are things we check against the plot, rather than discovering them in underwriting.
What the builder adds
The incentive rules are the same shape as for a house. Cash or costs paid by the developer are often capped at about 5% of the price, and you should still expect to put in about 5% of your own money. Upgrades to the kitchen, flooring or appliances are usually treated more gently than cash. On a flat, the service charge and ground rent sit beside that. We put the whole cost in front of you, not just the mortgage payment.
The warranty
A flat needs a structural warranty a lender will accept, usually for about 10 years. Cover arranged after the building was finished is often refused. On a block, the warranty also has to be enough to reinstate the building, not just the one apartment. We check that with the developer before you are committed.
These are typical lending positions, not a mortgage offer and not a promise of what a lender will do. Rules change, and the result depends on the plot, the price and your circumstances. We check the detail and tell you what can actually be done.
Talk to us before you reserve