New build - deposit required

[Bushman1]

Hi first time buyer wondering what is the required percentage a lender wants for a new build apartment or house. I seem to recall back in 2011/2012 it was 25% for a new flat/apartment and 15% for a new house. Is this still the case or are banks a bit laxed now.

[vescaegg]

I'm not sure new build is different to any other house in terms of mortgage?

You can get mortgages up to 95% of the property value but they kill you with rates at that level.

[Sarnie]

vescaegg said:

I'm not sure new build is different to any other house in terms of mortgage?

You can get mortgages up to 95% of the property value but they kill you with rates at that level.

The difference is fairly big.

Lenders do not like New Build properties, especially New Build flats.........

[vescaegg]

Sarnie said:

The difference is fairly big.

Lenders do not like New Build properties, especially New Build flats.........

You learn something new every day. Is it simply becuause they are priced at a premium so more risk of people entering negative equity?

[Sarnie]

vescaegg said:

You learn something new every day. Is it simply becuause they are priced at a premium so more risk of people entering negative equity?

Exactly that. New builds usually have lots of extras 'thrown in' that are basically just built in to the purchase price, giving a slightly inflated figure above the actual value.

Add that to a low deposit mortgage and most would be in negative equity immediately. And given that it's harder to shift a flat than a house, particularly city centre flats, lenders just don't like them.

We do a lot of purchases for clients who are buying repossessed properties and I would say about 90% of those properties are flats......

[chibbard]

I have recently paid a 10% deposit on a new flat that isn't going to be finished until next June/July. It sounds as though it varies somewhat.

[Bushman1]

So is there no definitive percentage I remember going to see a Cala new build flat in 2012 and the lady told me I'd require 25% deposit the flat was roughly £180k if remember correctly and she told me i'd need £45k.

So is this not the case anymore or was I misled.

I always thought for a new build house the pefered percentage was 15% as well.

[Sarnie]

Bushman1 said:

So is there no definitive percentage I remember going to see a Cala new build flat in 2012 and the lady told me I'd require 25% deposit the flat was roughly £180k if remember correctly and she told me i'd need £45k.

So is this not the case anymore or was I misled.

I always thought for a new build house the pefered percentage was 15% as well.

There is no definitive percentage as that would require all lenders to sync their lending LTVs with each other.....

The less you put down, the less choice of products and lenders you will have....

[chibbard]

And maybe that's why they only wanted 10% from me as I'm not mortgaging the rest. We are cash buyers!!

[Sarnie]

chibbard said:

And maybe that's why they only wanted 10% from me as I'm not mortgaging the rest. We are cash buyers!!

Different conversations

[robsdesk]

It varies per lender, we bought a new build earlier this year, the LTV limit with Santander (our mortgage provider) was 85% for a house & 80% for a flat. From memory of when we sorted the mortgage out these limits were reasonably consistent across the market.

[Burgmeister]

And of course then there is NewBuy and HTB:MG under which 95% LTV is available for new build.