Wish you had nice summer. Quite frequent people are quite struggle if they should buy new
build or old houses, flats or houses. May note below regarding mortgage.

What is the difference in uk mortgage when choosing new build house

1. Deposit Requirements
   due to the perceived risk of value depreciation after initial occupancy, a higher deposits
   than usual may be required.
2. Loan-to-Value (LTV) Ratios

New Builds: Lenders cap LTV at 85-90% for houses and 75-85% for flats due to risks like
potential value drops or construction issues. Lower LTVs for new builds mean you need
to borrow less relative to the property’s value, but you must provide a larger upfront
deposit.

3. Mortgage Offer Validity
   New Builds: Mortgage offers typically last 6 months, but some lenders extend to 9-12
   months to account for construction delays, especially for off-plan purchases. If delays
   occur, you may need to reapply or request an extension, which could involve reassessing
   your finances.
4. Incentives and Their Impact
   New Builds: Developers often offer incentives (e.g., paying stamp duty, legal fees, or
   providing cashback) to attract buyers. However, lenders may deduct incentives
   exceeding 5% of the property’s value from the loan amount, reducing how much you can
   borrow.
5. Warranties
   New Builds: Most come with a 10-year structural warranty (e.g., NHBC Buildmark),
   covering major defects. Lenders often require this for mortgage approval.
6. Interest Rates and Fees
   New Builds mostly are more energy-efficient, lender may have some green products on
   these houses.: Interest rates may be slightly higher due to perceived risk, though some
   lenders offer competitive rates or discounts for energy-efficient homes
   What’s the difference between flats and houses
7. Property Type and Ownership Structure
   Flats: Typically leasehold, meaning you own the flat for a set number of years (e.g., 99 or
   125 years) but not the land or building. You may need to pay ground rent and service
   charges for maintenance of communal areas. Regular annual cost would reduce your
   max loan size you may get. Lenders would have a min lease term remain after the
   mortgage term. Some lenders would reject flat application due to the exposure risks.
   Least but not the least, similarly for some new build, house or flat, service charge would
   reduce the loan size too.
8. Mortgage Availability and Lender Criteria
   Flats: Lenders often view flats as higher risk due to factors like lease length, building
   condition, or cladding issues (post-Grenfell). Mortgages may be harder to secure for flats
   in high-rise buildings (5+ storeys) or those with short leases (<80 years), as these can be
   difficult to sell or remortgage. An EWS1 certificate (External Wall System) may be
   required to confirm safety from flammable cladding

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