New-Build Flat Mortgages (2026): Why Lenders Lend Less & What to Check
Lenders treat a new-build flat as the riskiest mainstream property type: most cap the mortgage at 75–85% of the price, against 95% for a resale home. On a £300,000 flat that’s £30,000–£60,000 more deposit. Here’s why, the cladding and lease checks that decide whether a lender will touch it, and the routes to a smaller deposit.
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Quick answer
You can get a mortgage on a new-build flat, but lenders lend less on them than on almost any other mainstream property. Most cap new-build flats at 75–85% loan-to-value — meaning a 15–25% deposit — compared with 85–90% for new-build houses and 95% for existing homes. On a £300,000 flat, that’s a deposit of £45,000 at 85% or £75,000 at 75%, against £15,000 for a resale property. Lenders do this because new builds carry a price premium that erodes on resale, flats are harder to sell on than houses, and since Grenfell, tall blocks carry fire-safety risk. Three flat-specific checks decide whether a lender will proceed at all: cladding — in buildings over 11 metres (roughly four storeys or more) lenders usually want an EWS1 fire-safety certificate, and a poor rating can rule the flat out; the lease — most lenders want 70-plus years remaining and ground rent no higher than 0.1% of the value with no doubling clauses; and developer incentives — anything over 5% of the price reduces the value the lender uses, and over 10% many decline. Buy-to-let new-build flats are capped lower still, often 70%. Deposit-saving routes exist — Deposit Unlock lets you buy with 5% through participating builders, and shared ownership cuts the deposit to a fraction — but 95% deals on flats are far scarcer than on houses. Because so few lenders play in this space and their rules change often, a broker with new-build experience is close to essential. This is general information, not advice. As of September 2026.
In this guide
Why lenders lend less on new-build flats
If you’ve been surprised to find that a lender will offer you 95% on an existing house but only 85% — or 75% — on a new-build flat, you’re not alone; it’s the single most common shock for buyers of new apartments. Lenders apply stricter loan-to-value limits to new-build flats for three interlocking reasons. First, the new-build premium: brand-new properties sell for more than comparable second-hand ones simply because they’re new, and that premium erodes — a flat bought new for £280,000 in 2023 might be worth £250,000 as a resale in 2026 against similar existing stock. A lender underwriting against the long-term value of the property builds in that expected drop by lending less. Second, liquidity: flats have a thinner resale market than houses, and a block of near-identical new flats coming to market at once can depress prices, so if the lender ever had to repossess and sell, a flat is harder to shift. Third, fire safety: since Grenfell, tall residential blocks carry a cladding and external-wall risk that houses simply don’t, and lenders price that in. The result is that new-build houses are capped at 85–90% by most lenders (with 95% available through schemes), while new-build flats are typically capped at 75–85%. Our guide to new-build mortgages covers the general new-build picture — the 5% incentive rule, offer validity and so on; this page focuses on what’s different about flats.
What the LTV cap means for your deposit
Same £300,000 price, very different deposits
| Property | Typical max LTV | Deposit needed | Mortgage |
|---|---|---|---|
| Existing house or flat | 95% | £15,000 | £285,000 |
| New-build house | 90% | £30,000 | £270,000 |
| New-build flat (generous lender) | 85% | £45,000 | £255,000 |
| New-build flat (typical lender) | 75% | £75,000 | £225,000 |
So a new-build flat needs £30,000 to £60,000 more deposit than a resale property at the same price. Which end of that range you land on depends on the lender: some building societies and specialists go to 85% on new-build flats, but a good number of mainstream lenders stop at 75%. That’s why “how much can I borrow on a new-build flat” has no single answer — it’s a question of which lender you use. A 25% deposit gives you the widest lender access; at 10–15% your options narrow sharply, and at 5% you’re looking at scheme-backed products only. For buyers with a 10–15% deposit, it’s worth knowing that a new-build house (where 90–95% products exist) is considerably easier to mortgage than a new-build flat. Understanding your loan-to-value band is the key to seeing where you stand.
Cladding, EWS1 & high-rise blocks
This is the check that can stop a new-build flat mortgage dead, so it’s worth understanding properly. In buildings over 11 metres tall (broadly four storeys and above), lenders generally want evidence that the external wall system is safe before they’ll lend — usually an EWS1 form (External Wall System fire-review certificate) from a qualified fire engineer. The EWS1 gives the building a rating: an A rating (no combustible materials) or B1 (combustible materials present but risk acceptable) are generally lendable; a B2 rating (remediation required) is almost always declined by mainstream lenders, with only a handful of specialists considering it — and then only where a funded remediation programme is confirmed and under way, at reduced LTVs (often 75% maximum) and higher rates. For new builds specifically, the picture is usually better than for older blocks, because modern building regulations mean the developer should be able to provide the fire-safety documentation up front — but you must ask. The practical advice: if the flat is in a block of four storeys or more, raise fire-safety documentation with your solicitor and broker at the very start, not at the end, because a missing or unfavourable EWS1 can collapse a purchase weeks in. Very tall blocks (over 18 metres) fall under the Building Safety Fund for any remediation costs. If a flat has cladding issues, a broker who knows which lenders are flexible on EWS1 is genuinely essential.
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Lease, ground rent & the other checks
New-build flats are almost always leasehold, and lenders apply a set of flat-specific checks on top of the LTV cap:
- Lease length. Most lenders want at least 70 years remaining (many prefer 80-plus). New-build leases are usually long — 125, 250 or 999 years — so this is rarely a problem on a brand-new flat, but do confirm it.
- Ground rent. Many lenders won’t lend where ground rent exceeds around 0.1% of the property’s value, or where the lease contains escalation clauses (doubling every 10 or 15 years). Since June 2022, ground rent on new leases must be a peppercorn (effectively zero), so a genuinely new lease should be fine — but check, and see our guide to ground rent.
- Service charges. Lenders factor the annual service charge into affordability, and new blocks with lifts, gyms and concierge can carry high charges that reduce what you can borrow.
- Minimum floor area. Some lenders won’t lend on flats below around 30 square metres, and several refuse studio flats outright — a real issue with compact city-centre new builds.
- Flats above commercial premises (shops, restaurants) face extra restrictions from some lenders.
- Offer validity. If you’re buying off-plan, the flat may not complete for months; standard mortgage offers last around six months, so you’ll want a lender offering 9–12 month validity, or you risk reapplying at different rates.
None of these is unique to new builds, but they stack up on new-build flats in particular. For the broader decision between a flat and a house, see our comparison of flat vs house.
The incentive trap
Developers routinely sweeten new-build flat purchases with incentives — cashback, paid stamp duty, paid legal fees, free flooring or kitchen upgrades. These are genuinely useful, but they interact with your mortgage in a way that catches buyers out. All incentives must be disclosed to the lender (on a standard UK Finance disclosure form — omitting them can be treated as mortgage fraud). Lenders then apply a rule: incentives up to around 5% of the purchase price are usually fine; between 5% and 10%, many lenders reduce the property value they lend against by the incentive amount; and above 10%, most decline. Here’s the sting on a flat. Take a £300,000 new-build flat with £21,000 (7%) of incentives: the lender may treat the value as £279,000, so an 85% mortgage is £237,150 — and your deposit needs to be £62,850, not £45,000. The incentive that looked like free money has effectively raised your deposit by nearly £18,000. This is why a generous developer package on a flat needs to be run past your broker before you accept it — sometimes a lower headline price with fewer incentives leaves you better off with the lender.
Routes to a smaller deposit
If a 15–25% deposit is out of reach, there are ways to buy a new-build flat with less — though they’re narrower than for houses:
- Deposit Unlock. A developer-backed scheme allowing a 5% deposit on new builds through participating builders and lenders — and it does include flats, unlike some routes. See our guide to Deposit Unlock for the current position.
- Mortgage Guarantee Scheme. Government-backed 95% lending, made permanent in 2025 and covering properties up to £600,000 — but 5% deals on new-build flats are far less widely available than on houses, and often restricted to specific lender panels.
- Own New Rate Reducer. The developer contributes 3–5% of the price to cut your interest rate during the initial fixed period — it lowers the monthly cost rather than the deposit, but it helps affordability.
- Shared ownership. Many new-build flats are offered through shared ownership: you buy a 25–75% share with a mortgage only on that share, so the deposit is a fraction of the full price. See shared ownership mortgages.
- A gifted deposit from family to bridge the gap to 15%, which opens up far more lenders — see gifted deposits.
Note that on buy-to-let, new-build flats are capped lower again — often 70% LTV, against 75% for a new-build house — so a landlord needs a 30% deposit; see our buy-to-let guide. Most buy-to-let lending is not regulated by the FCA.
The bottom line
A new-build flat is mortgageable, but it’s the property type lenders are most cautious about: expect a 75–85% loan-to-value cap and therefore a 15–25% deposit — £30,000 to £60,000 more than a resale home at the same price — because the new-build premium erodes, flats are less liquid, and tall blocks carry fire-safety risk. Before you commit, check three things that can sink the mortgage: the EWS1 position if the block is over 11 metres, the lease terms (70-plus years, peppercorn ground rent, no doubling clauses), and the developer’s incentives (over 5% of the price cuts the value the lender uses). If the deposit is a stretch, Deposit Unlock, shared ownership and family help are the realistic routes, since 95% deals on flats are scarce. Above all, because only a limited set of lenders lend generously on new-build flats and their rules shift, use a broker who deals with new builds every week.
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New-build flat mortgages: FAQs
What deposit do I need for a new-build flat?
Typically 15–25% of the purchase price, because most lenders cap new-build flats at 75–85% loan-to-value — compared with 85–90% for new-build houses and 95% for existing homes. On a £300,000 flat, that means a deposit of £45,000 with a lender going to 85%, or £75,000 with one capping at 75%, against just £15,000 for a resale property. A 25% deposit gives you the widest choice of lenders; at 10–15% your options narrow considerably; and 5% deals on new-build flats exist only through specific schemes such as Deposit Unlock or restricted lender panels. Lenders lend less on new-build flats because the new-build price premium erodes on resale, flats are harder to sell than houses, and tall blocks carry fire-safety risk. Which end of the 75–85% range you get depends entirely on the lender, so a broker who knows the generous ones can save you tens of thousands in deposit.
Why will a lender only offer 85% on a new-build flat?
Lenders apply lower maximum loan-to-value limits on new-build flats than on almost any other mainstream property, for three reasons. First, the new-build premium: brand-new properties sell for more than comparable second-hand ones, and that premium erodes — a flat bought new for £280,000 might be worth £250,000 as a resale a few years later — so a lender underwriting against long-term value builds in that expected drop by lending less. Second, liquidity: flats have a thinner resale market than houses, and a block of similar new flats can depress prices, making a repossessed flat harder to sell. Third, fire safety: since Grenfell, tall residential blocks carry cladding and external-wall risk that houses don’t. The combination means most lenders cap new-build flats at 75–85%, with some mainstream lenders stopping at 75%. It’s a lender-by-lender decision, which is why borrowing capacity on the same flat varies so widely.
Do I need an EWS1 certificate for a new-build flat?
If the flat is in a building over 11 metres tall — roughly four storeys or more — lenders will usually want evidence that the external wall system is fire-safe, typically an EWS1 form from a qualified fire engineer. The EWS1 rates the building: A (no combustible materials) or B1 (combustible materials but acceptable risk) are generally lendable, while B2 (remediation required) is almost always declined by mainstream lenders, with only a few specialists considering it at reduced loan-to-value and higher rates where funded remediation is under way. For new builds the position is usually better than for older blocks, because modern building regulations mean the developer should be able to supply the fire-safety documentation up front — but you must ask for it. Raise the EWS1 question with your solicitor and broker at the very start of the purchase, because a missing or unfavourable certificate discovered late can collapse the deal.
Do developer incentives affect a new-build flat mortgage?
Yes, significantly, and it catches many buyers out. All developer incentives — cashback, paid stamp duty, paid legal fees, free upgrades — must be disclosed to the lender, and lenders apply a rule to them. Incentives up to around 5% of the purchase price are usually accepted without adjustment. Between 5% and 10%, many lenders reduce the property value they lend against by the incentive amount, which effectively increases your deposit. Above 10%, most lenders decline. On a £300,000 flat with £21,000 (7%) of incentives, the lender may treat the value as £279,000, so an 85% mortgage becomes £237,150 and your deposit rises from £45,000 to £62,850 — the incentive has cost you nearly £18,000 in extra deposit. Always run a developer’s incentive package past your broker before accepting it; a lower price with fewer incentives sometimes leaves you better off with the lender.
Can I get a 95% mortgage on a new-build flat?
Rarely through standard lending, but possibly through schemes. Most lenders cap new-build flats at 75–85% loan-to-value, so a straightforward 95% mortgage on a new-build flat is uncommon. The main routes to a 5% deposit are Deposit Unlock — a developer-backed scheme that allows 5% deposits on new builds, including flats, through participating builders and lenders — and the government-backed Mortgage Guarantee Scheme, which covers properties up to £600,000, though 5% deals on new-build flats under it are far less widely available than on houses and are often limited to specific lender panels. Shared ownership is another practical option, letting you buy a 25–75% share of a new-build flat with a mortgage only on that share, so the deposit is a fraction of the full price. A gifted deposit from family to reach 15% opens up many more lenders. A broker can tell you which of these routes is available on the specific development.
Are buy-to-let mortgages on new-build flats different?
Yes — the loan-to-value caps are lower again. Where a buy-to-let mortgage on a new-build house might go to 75% LTV, new-build flats are commonly capped at around 70%, meaning a landlord needs a 30% deposit rather than 25%. On a £300,000 flat that’s a £90,000 deposit against £75,000 for a house. The same flat-specific checks apply — cladding and EWS1 in taller blocks, lease length, ground rent, service charges (which also reduce the rental income lenders count) and minimum floor area — and some lenders won’t lend on new-build flats for buy-to-let at all. Rental affordability is assessed on the interest cover ratio, and a high service charge on a new block can make that harder to pass. Fewer lenders operate in this niche, so a broker experienced in new-build buy-to-let is valuable. Note that most buy-to-let mortgages are not regulated by the Financial Conduct Authority.
- GOV.UK — Building Safety Fund
- GOV.UK — Leasehold property
- MoneyHelper — free, government-backed money guidance
Important information
nextmove is an introducer, not a lender, mortgage adviser, surveyor or solicitor. This article is general information only and does not constitute financial, legal or fire-safety advice. Lender loan-to-value limits, cladding and EWS1 policies, lease and ground rent requirements, incentive rules and scheme availability vary between lenders and developments and change frequently; the figures here are illustrative examples based on the market as of 2026, not quotes. Always obtain the building’s fire-safety documentation and lease terms through your solicitor before committing. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. We introduce you to FCA-regulated, whole-of-market mortgage brokers who can advise on new-build flat mortgages, and we may receive a fee or commission for doing so.
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