Buy-to-Let
Buy-to-Let Mortgages on New Build Property
New builds can make good rentals, with low maintenance and strong energy ratings. But lenders are more cautious, especially with new build flats, and valuations often come in below the asking price. A bigger deposit and careful timing help.
Written and reviewed by Davi Thakar, CeMAP qualified mortgage and protection adviser Updated
Yes, you can get a buy-to-let mortgage on a new build, but lenders are more cautious than with older homes. They often cap loan-to-value lower on new build flats, lend on the price after incentives, and value against resales rather than the developer’s list price.
New build homes appeal to landlords: modern, low maintenance, often with good energy ratings and popular with tenants. Lenders like the quality but worry about new build premiums, where prices fall back once the property is no longer new, and about having too much lending in one block.
This guide covers what lenders check, off-plan timing, incentives, costs and the mistakes to avoid. For the wider picture, see our complete buy-to-let mortgage guide.
Can you get a buy-to-let mortgage on a new build?
Yes, from many buy-to-let lenders. Houses are usually treated much like any other purchase, often at up to 75% loan-to-value. New build flats are where lenders tighten up, with some capping them at 70% or lower. Plan for a valuation below the asking price, and make sure your offer lasts until the property is finished.
What do lenders check on a new build?
| Typical position | |
|---|---|
| Loan-to-value | Often 75% on houses. Some lenders cap new build flats at 70% or lower |
| Valuation | Based on comparable resales, not the developer’s price |
| Developer incentives | Usually deducted from the price the lender lends on |
| Concentration | Some lenders limit how many flats they lend on in one block |
| Rent | A realistic figure, often checked by the valuer |
| Warranty | A recognised structural warranty, usually for 10 years |
Illustration only
A new build flat is priced at £230,000 with a £10,000 incentive from the developer. The lender values it at £215,000. At 75% it would lend £161,250, so the buyer needs £68,750 rather than the £57,500 they expected at 75% of the asking price.
Why do new build valuations come in low?
Developers price new homes with a premium for being brand new, plus incentives such as paid fees or furniture packs. The lender’s valuer looks at what similar resale homes nearby have sold for, and takes off the value of incentives. The gap between the two figures comes out of your deposit, not the lender’s loan.
The valuer will also give a rent figure. If it is below the developer’s estimate, the loan may be cut to pass the rental test. Check rents on similar flats already let nearby, not just the figure in the sales brochure.
Can you buy off-plan with a buy-to-let mortgage?
Buying before the property is built can secure a lower price, but your mortgage offer has to last until completion. Offers are usually valid for six months, sometimes longer for new builds. If the build runs late, you may need an extension or a new application, possibly at a different rate. Some lenders will not issue an offer until the property is close to finished, so ask the developer for a realistic completion date.
Which situations do lenders see most?
These are illustrative situations, not Option Finance client outcomes.
New build house to let
You buy a house on a new estate. Most lenders treat it close to a normal purchase, subject to the valuation.
Houses are the easier new buildFlat in a large block
You want a flat in a development where many units are investor owned. Some lenders will cap their exposure or lower the loan-to-value.
Check the block before you reserveOff-plan with a long build
You reserve a year before completion. Your offer may run out before the keys are ready.
Time the application carefullyBig incentive package
The developer offers cashback and paid fees. The lender lends on the price after those incentives.
Incentives often mean a bigger depositWhat should you check before you buy?
- Ground rent and service charges on flats, which reduce your profit and can affect lending.
- Rents on similar resale properties, not just the developer’s estimate.
- Cladding and fire safety documentation on blocks.
- Warranty, usually a 10-year structural warranty that lenders require.
- The lease length and terms on flats. Our leasehold mortgage guide covers what lenders look for.
- Completion dates and what happens if the build is delayed.
What does it cost to buy a new build to let?
New build buy-to-lets attract the same higher Stamp Duty rates for additional homes as any other purchase. In England and Northern Ireland that is 5% above the standard residential rates. GOV.UK explains the rules for buying an additional residential property. Use our Stamp Duty calculator to check the figure.
Also budget for legal fees, the lender’s arrangement fee, furnishing if you plan to let furnished, and a few months of service charges before the first tenant moves in.
Our broker fee is £499 in total: £299 on application and £200 when a mortgage offer is issued. The £299 is fully refundable if the application is declined. Your initial consultation is free.
Frequently asked questions
Can I get a buy-to-let mortgage on a new build?
Yes. Many lenders lend on new build houses, though some limit loan-to-value on new build flats.
How much deposit for a new build buy-to-let?
Usually 25%, sometimes 30% or more on new build flats, and more if the valuation comes in below the price.
Do lenders accept developer incentives?
Usually up to a limit, but they normally lend on the price minus the incentives.
Can I buy off-plan with a buy-to-let mortgage?
Yes, if the mortgage offer lasts until completion or can be extended.
Why did my new build valuation come in low?
Valuers compare with resales nearby and strip out incentives, so they often value below the developer’s price. The shortfall usually has to come from your deposit.
Do I need a structural warranty?
Lenders usually require a recognised 10-year structural warranty on a new build.
Can I buy a new build to let through a limited company?
Yes. Many limited company buy-to-let lenders accept new builds, with the same caution on flats and incentives.
Speak to Option Finance about a new build buy-to-let
We will tell you straight which lenders will lend on the development, what deposit you really need and how to time an off-plan purchase.
Book a free initial consultation using the enquiry form below. See our buy-to-let mortgage advice, our new build mortgage guide and our limited company buy-to-let guide.
Talk through your mortgage options
Tell us about your plans and circumstances. Your initial consultation is free.
Some buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Regulation depends on the mortgage type and circumstances.
Talk through your mortgage options
Tell us about your plans and circumstances. Your initial consultation is free.
Written and reviewed by Davi Thakar
Director & Senior Mortgage Broker
CeMAP Qualified Mortgage and Protection Adviser
Davi founded Option Finance with a vision to deliver transparent mortgage advice from a wide panel of lenders. With over 10 years in financial services, he specialises in complex cases including adverse credit, self-employed borrowers with limited trading history, and large buy-to-let portfolios. He works directly on complex cases and explains each option clearly.
Meet Davi Thakar
