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Saving a deposit for new build homes

Natalie Wilson

Mar 16, 2023

When you’re looking to buy a new home, the first thing that springs to mind is probably the deposit.

You’ll start asking yourself how little, or how much, you’ll need to make an offer that’s tangible, realistic, and works best for you. Knowing how much you need to save overall and how this might differ for a new build over a second-hand home is really important. You’ll also want to know when you pay a deposit on a new build, how much will you need to save, and if there any additional deposits you need to consider. Find out all of this and more; just keep reading, and browse our full range of homes when you’re finished!

How much will a new build deposit cost?

A deposit for a new build will differ from older properties, as these housing types typically require a 10%, and sometimes even a 5% deposit. Whereas for a new build deposit, you'll be paying a minimum of 15% to a maximum of 30% deposit. And if you’re searching for a new build flat rather than a house, you’ll require around 25% of the property cost as a minimum deposit.

Why are new build home deposits higher?

New build properties require higher deposits than some other property types because they reap so many benefits. For instance, a new build home has never been lived in before, which means you’ll be the first person to live there. This means you’ll be the first person to reap the rewards of sustainable construction, including excellent energy efficiency, resulting in cheaper bills.

When do you pay a deposit on a new build house?

The deposit will need to be paid a few weeks (1-2) before the total purchase is complete, and the money is sent from your mortgage lender. You’ll just need to pay the agreed deposit after exchanging contracts; this provides you and the seller with a good amount of time to organise everything between exchange and completion.

What is a reservation deposit?

Many new build house purchases require a reservation deposit, also known as a reservation fee – this is different to your mortgage deposit.

A reservation deposit is a sum of money you pay to the home builder to secure your plot.
This deposit then takes your dream house off the market, better securing the property for you to buy.
The reservation deposit can differ depending on the builder, but at Strata our standard reservation fee is £500.

Ensure you read the T’s and C’s of your reservation deposit first

Before laying out the cash for your reservation deposit, ensure you read the terms and conditions thoroughly. After all, you need to know whether this deposit is refundable, in the unlikely event that you need to pull out of the sale, as this isn’t always guaranteed - and will depend on the housebuilder.

You also need to check the T’s and C’s because your reservation deposit should be listed as part of the full purchase price.
For example, you need to find evidence that the early deposit will later be deducted from the house price. So, it’s really important to properly check your reservation deposit agreement with the home builder.

Also, you will be asked to sign a contract, agreeing to buy the new build at the price that it’s currently advertised at, and you’ll be signing an agreement to pay off the balance at completion, too. The home builder usually arranges this process.

How long does it take to buy a new build house?

There’s no set timescale when you buy a new build home, as the time it takes depends on the development itself, as well as the home builder. However, the quicker you source your deposit and sign the agreement, the faster things can start moving.

Then, once you’ve found your dream new build home, you’ll need to source a solicitor because they will manage all of the legal work for you. Buying a new build quickly is also based on how speedily you’re able to complete the conveyancing process, which can differ from company to company, and person to person.