Quick Deposit Overview: What You Need at a Glance
| Property Type | Minimum Deposit | Recommended Deposit | Best Rate Threshold | Notes |
|---|---|---|---|---|
| New build house | 5% (some lenders) | 10–15% | 25%+ | Most lenders accept 5–10% |
| New build flat | 10% (most lenders) | 15–20% | 25%+ | Many lenders require 15% minimum |
| Off-plan house | 10% | 15% | 25%+ | Fewer lenders; some require 15% |
| Off-plan flat | 15% (most lenders) | 20% | 25%+ | Limited lender choice below 15% |
| Shared ownership | 5% of your share | 10% of your share | N/A | Deposit based on share value, not full price |
These are general market patterns — individual lenders set their own criteria, and a whole-of-market mortgage broker experienced with new builds can identify which lenders will accept your deposit level for your specific property.
How New Build Deposits Work Differently
When you buy a resale property, you pay your deposit on exchange and the rest on completion — usually a few weeks apart. New builds work differently because you often reserve months before you exchange, and exchange can be months before completion. This creates a multi-stage payment structure that catches many buyers off guard.
The Three-Stage Payment Structure
| Stage | When | Typical Amount | What Happens to the Money | Refundable? |
|---|---|---|---|---|
| 1. Reservation fee | Day you choose your plot | £500–£2,000 (sometimes up to £5,000) | Held by developer; usually deducted from purchase price | Sometimes — depends on reservation agreement terms |
| 2. Exchange deposit | When contracts are exchanged (typically 28 days after reservation) | 10% of purchase price (negotiable to 5% in some cases) | Held by solicitor or stakeholder | No — you lose it if you pull out after exchange |
| 3. Completion balance | When keys are handed over | Remaining purchase price minus mortgage | Transferred to developer | N/A |
Stage 1: The Reservation Fee
The reservation fee takes the property off the market while solicitors prepare contracts. Key points:
- Typical range: £500 for apartments in slower markets, up to £5,000 for premium houses in high-demand developments
- Deducted from price: Most developers deduct the reservation fee from the total purchase price, so it forms part of your deposit — it is not an additional cost
- Refundability: The Consumer Code for Home Builders (2024 edition) requires developers to set out clearly when the reservation fee is refundable. Many agreements give you a cooling-off period (often 10–14 days) during which you can get a full refund. After that, refundability depends on the reason for withdrawal
- What to check: Read the reservation agreement carefully before paying. Confirm whether the fee is refundable if your mortgage is declined or if the developer delays beyond the longstop date
Stage 2: The Exchange Deposit
When you exchange contracts, you commit to buying the property. The exchange deposit is the most critical payment:
- Standard amount: 10% of the purchase price is conventional, but some developers accept 5% — especially for first-time buyers or when market conditions favour buyers
- Where it is held: The deposit should be held by the developer's solicitor as "stakeholder" (meaning they cannot release it to the developer until completion). If it is held as "agent" for the developer, the developer can spend it before completion — this carries risk if the developer becomes insolvent. Always ask your solicitor to negotiate stakeholder terms
- Your reservation fee is included: If you paid a £1,000 reservation fee and the exchange deposit is 10% of a £300,000 property (£30,000), you pay £29,000 at exchange — the reservation fee makes up the difference
- Source of funds: The exchange deposit must come from your own savings, gifts, or other provable sources. Your mortgage lender does not provide this — the mortgage funds arrive at completion
Stage 3: Completion
On completion day, the remaining balance is paid. Your mortgage lender releases the loan funds to your solicitor, who combines them with any remaining deposit and transfers the total to the developer. If your total deposit is 15% and you paid 10% at exchange, the remaining 5% comes from your savings at this stage — though some buyers arrange for their mortgage to cover the difference.
Timeline Implications
For off-plan purchases, there can be 6–24 months between exchange and completion. During this time your 10% exchange deposit is locked away. This has practical implications:
- You cannot use that money for anything else during the build period
- You do not earn interest on it (unless held in a stakeholder interest-bearing account — rare but worth asking)
- If the property is down-valued by your mortgage lender at completion, you may need to find additional funds
- If your circumstances change (job loss, relationship breakdown), you cannot easily recover the deposit after exchange
Deposit Size by LTV Tier: What You Get for Each Level
Your deposit determines your loan-to-value (LTV) ratio, which directly affects the mortgage rates available to you. The relationship is not linear — there are specific thresholds where rates drop meaningfully.
| Deposit % | LTV | Indicative Rate (2-year fix, Feb 2026) | Monthly Payment (£300k, 30yr) | Lender Availability | Notes |
|---|---|---|---|---|---|
| 5% | 95% | 5.5–6.0% | £1,703–£1,799 | Limited for new builds; very few for new build flats | Expect higher fees; some lenders add new build loading |
| 10% | 90% | 4.8–5.3% | £1,572–£1,659 | Good choice for new build houses; some new build flats | The most common starting point for new build buyers |
| 15% | 85% | 4.4–4.9% | £1,496–£1,590 | Wide availability for all new build types | Opens up most new build flat lenders |
| 20% | 80% | 4.1–4.5% | £1,440–£1,516 | Most lenders available | Meaningful rate improvement over 85% LTV |
| 25% | 75% | 3.8–4.2% | £1,385–£1,456 | Full market access | Best rates typically available from this tier |
| 40%+ | 60% | 3.5–3.9% | £1,327–£1,399 | Full market access | Marginal improvement over 75% LTV |
Rates are illustrative based on market conditions in early 2026. Actual rates vary by lender, borrower profile, and product type. Use these figures for comparison between tiers rather than as quotes.
The Real Cost Difference Between 5% and 15%
Consider a £300,000 new build house. The difference in monthly payments between 5% and 15% deposit is roughly £130–£210 per month. Over a 2-year fixed term, that is £3,120–£5,040 in additional interest. Meanwhile, the difference between saving £15,000 (5%) and £45,000 (15%) is £30,000 — which at the higher interest rate takes roughly 6–10 years of payment savings to recover. This is why the "save the biggest deposit possible" advice is not always correct: for many buyers, getting on the ladder sooner at 5–10% and remortgaging to a lower LTV as the property appreciates can be more effective than waiting years to save 15–20%.
New Build Lender Restrictions to Know
| Restriction | What It Means | Workaround |
|---|---|---|
| New build flat minimum LTV | Many lenders cap at 80–85% LTV for new build flats (requiring 15–20% deposit) | Use a broker to find lenders who accept 90% LTV on new build flats — they exist but are fewer |
| Off-plan restrictions | Some lenders will not lend on properties that will not be completed within 6 months | Get a mortgage agreement in principle early, but be prepared to re-apply closer to completion |
| Developer incentive caps | Most lenders cap the value of developer incentives at 5% of the property price (some allow less) | Negotiate a price reduction instead of incentives above the cap — the effect is the same but lenders treat it differently |
| High-rise restrictions | Some lenders will not lend on buildings above a certain number of storeys, or require additional fire-safety documentation | Check EWS1 form requirements early; some lenders have relaxed criteria for buildings with remediation plans |
| New build premium concern | Lenders' valuers may value the property below the purchase price, effectively requiring a larger deposit | Get the developer to reduce the price rather than offer incentives; consider a survey early to flag potential issues |
How Much Cash Do You Actually Need? Deposit Plus Other Upfront Costs
Your deposit is the largest upfront cost, but it is not the only one. Buyers who save exactly their deposit amount often find themselves short when other costs arrive. Here is a realistic picture of total cash needed:
| Cost | £250,000 Home (10% Deposit) | £350,000 Home (10% Deposit) | £450,000 Home (15% Deposit) |
|---|---|---|---|
| Deposit | £25,000 | £35,000 | £67,500 |
| Reservation fee (deducted from deposit) | (£500–£1,000) | (£1,000–£2,000) | (£1,000–£2,000) |
| Solicitor / conveyancing fees | £1,500–£2,500 | £1,800–£3,000 | £2,000–£3,500 |
| Mortgage arrangement fee | £0–£999 | £0–£999 | £0–£999 |
| Mortgage valuation fee | £0–£300 | £0–£400 | £0–£500 |
| Stamp duty (SDLT) | £0 (FTB relief) | £2,500 (FTB) / £5,000 (standard) | £11,250 (standard) |
| Searches and disbursements | £300–£500 | £300–£500 | £300–£500 |
| Moving costs | £500–£1,500 | £800–£2,000 | £1,000–£3,000 |
| Total Cash Needed | £27,800–£30,800 | £40,400–£43,900 | £82,050–£88,000 |
The reservation fee is shown in brackets because it is deducted from the deposit — you pay it first, but it is not additional. First-time buyer stamp duty relief applies on properties up to £425,000 (as of April 2025 thresholds). For a comprehensive cost breakdown including furnishing and ongoing expenses, see our Complete New Build Budget Planner.
Saving for Your Deposit: Strategies That Actually Work
The Lifetime ISA (LISA)
The Lifetime ISA remains the single most effective deposit-saving tool for first-time buyers under 40:
| Feature | Detail |
|---|---|
| Annual contribution limit | £4,000 per tax year |
| Government bonus | 25% — up to £1,000 per year |
| Maximum bonus over time | £33,000 bonus on £132,000 saved (age 18 to 50) |
| Property price cap | £450,000 |
| Must be open for | At least 12 months before using for a property purchase |
| Penalty for non-property withdrawal | 25% of the withdrawal amount (you lose the bonus plus 6.25% of your own contributions) |
| Cash or stocks and shares | Both available — cash for short-term saving, S&S for 5+ year horizons |
LISA Strategy for New Build Buyers
Practical example: You open a LISA today and contribute £4,000 before 5 April. You contribute another £4,000 from 6 April. After 12 months, you have £8,000 of contributions plus £2,000 in bonuses = £10,000. If you continue for 3 years at maximum contributions, you accumulate £12,000 in contributions + £3,000 bonus = £15,000 (plus any interest). That is a meaningful portion of a 5–10% deposit on a property up to £300,000.
Key timing point: Open your LISA as early as possible, even with just £1. The 12-month clock starts from the date you open it, not from when you make your main contributions. Many buyers lose months because they did not know about this requirement.
Regular Savings Accounts
Several banks offer regular savings accounts paying 5–7% on monthly deposits of £25–£300. While the absolute returns are modest, they enforce saving discipline. Consider setting up a standing order on payday so the money leaves your account before you can spend it.
Saving Milestones by Target
| Target Deposit | Monthly Saving | Time to Reach (No Bonus) | Time with LISA Bonus | Property Value at 10% LTV |
|---|---|---|---|---|
| £15,000 | £500 | 2 years 6 months | ~2 years 2 months | £150,000 |
| £25,000 | £500 | 4 years 2 months | ~3 years 8 months | £250,000 |
| £25,000 | £750 | 2 years 10 months | ~2 years 6 months | £250,000 |
| £35,000 | £750 | 3 years 11 months | ~3 years 5 months | £350,000 |
| £35,000 | £1,000 | 2 years 11 months | ~2 years 7 months | £350,000 |
| £50,000 | £1,000 | 4 years 2 months | ~3 years 9 months | £500,000 |
LISA bonus estimates assume maximum annual contributions of £4,000 with 25% bonus. Actual timelines depend on interest rates and contribution patterns.
Other Deposit-Boosting Strategies
- Reduce rent temporarily: Moving back with family for 12–24 months is the single biggest accelerator. If your rent is £900/month, that is £10,800–£21,600 freed up for your deposit
- Salary sacrifice: Some employers allow salary sacrifice into savings schemes with tax efficiency. Check if your employer offers any house-purchase support
- Bonus and windfall strategy: Commit to saving 100% of any bonuses, tax refunds, or one-off payments. These irregular sums add up faster than monthly savings alone
- Reduce high-interest debt first: If you are paying 20%+ on credit cards while saving at 4%, paying off the debt first gives a better effective return. Mortgage lenders also consider your debt-to-income ratio
- Side income: Even modest additional income (freelancing, overtime, selling unused items) directed entirely to savings can cut months off your timeline
Gifted Deposits: Rules, Requirements, and What Lenders Need
Many first-time buyers receive deposit gifts from parents or family members. Lenders accept gifted deposits but have specific requirements:
What Lenders Require
| Requirement | Detail | Why It Matters |
|---|---|---|
| Gifted deposit letter | A signed letter from the giftor confirming the money is a gift, not a loan, and they have no interest in the property | Lenders need to confirm it will not need to be repaid (which would affect affordability) |
| Proof of source | Bank statements showing where the gift money came from (typically 3–6 months) | Anti-money laundering regulations require proof of the source of all funds |
| Relationship to buyer | Most lenders require the giftor to be an immediate family member (parent, grandparent, sibling) | Some lenders will not accept gifts from friends, partners (unmarried), or distant relatives |
| Giftor ID | Passport or driving licence copy of the giftor | Part of anti-money laundering checks |
| No repayment expectation | The gift must be unconditional with no expectation of repayment | If the giftor expects repayment, it is a loan and must be declared as a financial commitment |
Things to Watch Out For
- Inheritance tax implications: If the giftor dies within 7 years of making the gift, it may be subject to inheritance tax (taper relief applies). This is a tax matter, not a mortgage matter, but both parties should be aware
- Mixed deposits: Using a combination of your own savings and a gift is completely normal and accepted by all lenders. Just document both sources clearly
- Timing: The gift should ideally be in your bank account for at least one full statement cycle before you apply for the mortgage. Some lenders want to see it "seasoned" in your account
- Partial gift, partial loan: If a family member wants to give some money as a gift and lend you some, declare the loan portion to your mortgage broker. Undeclared loans discovered later can void your mortgage offer
Family Assistance Alternatives to Gifting
| Scheme | How It Works | Family Commitment | Key Consideration |
|---|---|---|---|
| Family offset mortgage | Family member's savings are held in a linked account and offset against the mortgage balance, reducing interest | Savings are locked for an agreed period (typically 3–5 years) | Family keeps their money; it is returned after the offset period |
| Family deposit mortgage | Family member deposits 10% of the property value into a savings account held by the lender | Savings locked for 3–5 years | Buyer gets 100% LTV mortgage; family gets savings back with interest |
| Joint borrower sole proprietor | Family member is on the mortgage but not the title deed | Family member's income is assessed for affordability | Family member has mortgage liability but no property ownership; affects their own borrowing capacity |
| Guarantor mortgage | Family member guarantees the mortgage; their property or savings provide security | Family member's home or savings are at risk if you default | High risk for the guarantor; fewer lenders offer this now |
Developer Deposit Contributions: Free Money or Hidden Cost?
Many new build developers offer "deposit contributions" as an incentive — the developer effectively gives you part of your deposit. This sounds straightforward, but the reality is more nuanced.
How Developer Deposit Contributions Work
The developer agrees to pay a percentage (typically 3–5%) of the purchase price towards your deposit. In practice, this is usually structured as a price reduction rather than a cash payment — the developer gives your solicitor a credit at completion. From the lender's perspective, the property price remains unchanged, and you need less of your own cash.
The Lender Cap Problem
Most mortgage lenders cap total developer incentives at 5% of the property value. Some cap at 3% for high-LTV mortgages. If the developer offers a 5% deposit contribution plus £5,000 towards stamp duty plus free flooring upgrades worth £3,000, and the property costs £300,000, the total incentive is £23,000 — or 7.7% of the price. That exceeds most lenders' caps. The lender will either:
- Reduce their valuation of the property by the excess incentive amount, or
- Decline the application entirely
Price Reduction vs. Incentive
Here is the critical distinction:
| Approach | Lender Treatment | Your Benefit |
|---|---|---|
| Developer reduces price by £15,000 | Property valued at the lower price; LTV calculated on that amount | Lower purchase price, lower stamp duty, lower mortgage amount |
| Developer offers £15,000 "incentives" at full price | Lender values at full price but may cap incentives at 5%; excess reduces their valuation | Higher purchase price recorded, potentially higher stamp duty, but less cash needed upfront |
Practical advice: If developer incentives exceed 5% of the property value, ask the developer to convert the excess into a price reduction. Your broker and solicitor can advise on the most advantageous structure for your situation.
Does a Deposit Contribution Affect the Valuation?
Mortgage valuers are aware of new build incentive structures. If comparable properties on the same development have sold at different prices with different incentive packages, the valuer takes this into account. A property listed at £300,000 with £15,000 of incentives may be valued at £285,000 — the effective price after incentives. If this happens and you were relying on a 90% LTV mortgage, your required deposit jumps from 10% of £300,000 (£30,000) to 10% of £285,000 (£28,500) plus the £15,000 shortfall — totalling £43,500 instead of £30,000.
This is called a "down-valuation" and is one of the biggest risks with developer-incentive-heavy purchases. Your mortgage broker should stress-test this scenario before you commit.
Shared Ownership Deposits
Shared ownership reduces the deposit barrier dramatically because you only need a deposit on the share you are buying, not the full property value:
| Full Property Value | Your Share (25%) | Deposit at 5% of Share | Deposit at 10% of Share | Rent on Remaining 75% |
|---|---|---|---|---|
| £250,000 | £62,500 | £3,125 | £6,250 | ~£390–£470/month |
| £300,000 | £75,000 | £3,750 | £7,500 | ~£470–£560/month |
| £350,000 | £87,500 | £4,375 | £8,750 | ~£550–£660/month |
| £400,000 | £100,000 | £5,000 | £10,000 | ~£625–£750/month |
Rent estimates based on typical housing association rates of 2.75% of the unsold share value per year. Actual rents vary by provider.
Shared Ownership Deposit Considerations
- Smaller deposit, but total monthly cost is higher: You pay a mortgage on your share plus rent on the housing association's share. Always calculate total monthly costs, not just the mortgage
- Staircasing: You can buy additional shares over time (staircasing) until you own the property outright. Each staircase purchase requires a valuation and potentially a new deposit/mortgage arrangement
- Resale restrictions: The housing association usually has first right to find a buyer, which can slow down selling. New-model shared ownership (post-2021) allows staircasing in 1% increments for the first 15 years
- New build shared ownership: Many new build developments include shared ownership plots, often managed by a housing association partner. The deposit process is the same as standard new builds but applied to your share value
Deposit Unlock and Other Developer Schemes
Deposit Unlock
Deposit Unlock is a scheme backed by the Home Builders Federation where participating developers provide an insurance policy to the mortgage lender, enabling 95% LTV mortgages on new builds — including flats — that would otherwise require larger deposits. Key features:
- Available through specific lenders (the developer arranges the insurance, not the buyer)
- Allows 5% deposit on new build houses and flats from participating developers
- The developer pays an insurance premium to cover the lender's additional risk
- You do not pay for the insurance — it is the developer's cost
- Not all developments participate; ask the developer whether they are enrolled in Deposit Unlock
Other Developer Deposit Assistance
| Scheme Type | How It Works | Watch Out For |
|---|---|---|
| Assisted move | Developer helps sell your existing home (estate agent fees, part-exchange) | Part-exchange typically offers 90–95% of market value — you may get more selling independently |
| Part-exchange | Developer buys your current home and applies the equity to your new build deposit | Convenient but you are unlikely to get full market value; get independent valuations for comparison |
| Key worker schemes | Some developers and housing associations offer deposit discounts for NHS workers, teachers, emergency services | Eligibility criteria vary; often limited to specific developments |
| Forces Help to Buy | Ministry of Defence scheme lending up to 50% of salary (max £25,000) interest-free for Armed Forces personnel | Must be a regular service member; the loan must be repaid and is treated as a commitment by lenders |
Deposit Protection During Off-Plan Builds
If you exchange on an off-plan property and pay your 10% deposit, that money sits with someone for months or even years. Protecting it is critical:
Stakeholder vs. Agent
| Deposit Held As | What It Means | Your Risk |
|---|---|---|
| Stakeholder | The solicitor holds the deposit and cannot release it to the developer until completion | Low — your deposit is protected even if the developer goes bust before completion |
| Agent | The solicitor holds the deposit on behalf of the developer, who can access it immediately | High — if the developer becomes insolvent, your deposit may be lost (you become an unsecured creditor) |
Always insist on stakeholder terms. If the developer insists on agent terms, your solicitor should advise you on the additional risk. Some buyer protection insurance policies cover deposit loss in the event of developer insolvency — ask your solicitor about these.
NHBC and Other Warranty Provider Protections
The NHBC Buildmark policy provides deposit protection of up to £100,000 if the developer is registered with NHBC and goes insolvent before completion. Similar protections exist with LABC, Premier Guarantee, and other warranty providers. Check:
- Is the developer registered with a recognised warranty provider?
- Does the warranty cover your deposit in the pre-completion period?
- What is the maximum deposit protection amount?
- Does the protection apply regardless of whether deposits are held as stakeholder or agent?
Worked Deposit Examples by Buyer Type
Example 1: First-Time Buyer — Apartment at £250,000
| Item | Amount | Notes |
|---|---|---|
| Purchase price | £250,000 | New build apartment |
| Deposit target | 10% = £25,000 | Minimum for most new build flat lenders |
| Own savings | £15,000 | Saved over 2 years |
| LISA balance + bonus | £5,000 | £4,000 saved + £1,000 bonus (1 year) |
| Gift from parents | £5,000 | With gifted deposit letter and proof of source |
| Total deposit | £25,000 | 10% LTV achieved |
| Additional cash needed (fees, costs) | £3,000–£4,500 | Solicitor, searches, moving |
| Total cash required | £28,000–£29,500 |
Example 2: Second-Time Buyer — Family House at £350,000
| Item | Amount | Notes |
|---|---|---|
| Purchase price | £350,000 | New build 3-bed semi |
| Deposit target | 15% = £52,500 | Targeting 85% LTV for better rates |
| Equity from existing home sale | £65,000 | After repaying mortgage and sale costs |
| Total deposit available | £65,000 | 18.6% — between 85% and 80% LTV tiers |
| Option: increase to 20% = £70,000 | £5,000 additional savings | Unlocks 80% LTV rates — saving ~£30–50/month |
| Stamp duty (standard rate) | £5,000 | £350,000 purchase; no FTB relief for second-timers |
| Other costs | £4,000–£6,000 | Solicitor, searches, moving, etc. |
| Total cash required (with 15% deposit) | £61,500–£63,500 |
Example 3: Shared Ownership Buyer — House at £300,000 (25% Share)
| Item | Amount | Notes |
|---|---|---|
| Full property value | £300,000 | New build 2-bed house |
| Your share (25%) | £75,000 | |
| Deposit at 10% of share | £7,500 | Only 2.5% of the full property value |
| Mortgage on your share | £67,500 | |
| Monthly mortgage (4.5%, 30yr) | ~£342 | |
| Monthly rent on 75% (at 2.75%) | ~£516 | |
| Service charge | ~£100–£150 | |
| Total monthly cost | ~£958–£1,008 | |
| Solicitor and other fees | £2,000–£3,500 | |
| Total cash required | £9,500–£11,000 | The lowest deposit route onto the new build ladder |
Example 4: Off-Plan Buyer — House at £400,000
| Stage | When | Amount | Cumulative Cash Committed |
|---|---|---|---|
| Reservation fee | January 2026 | £2,000 | £2,000 |
| Exchange deposit (10% minus reservation) | February 2026 | £38,000 | £40,000 |
| Solicitor fees on exchange | February 2026 | £1,500 | £41,500 |
| Build period | February 2026 – January 2027 | £0 (but deposit is locked) | £41,500 |
| Mortgage valuation fee | December 2026 | £400 | £41,900 |
| Completion: additional deposit (5% to reach 15%) | January 2027 | £20,000 | £61,900 |
| Stamp duty | January 2027 | £7,500 (FTB) | £69,400 |
| Remaining solicitor fees | January 2027 | £1,000 | £70,400 |
| Moving costs | January 2027 | £1,500 | £71,900 |
This example illustrates the cash-flow challenge of off-plan buying: you need £41,500 upfront and then a further £30,400 approximately 12 months later. Planning these two cash milestones is essential — see our Complete Guide to Buying Off-Plan for the full process.
Common Deposit Mistakes to Avoid
| Mistake | What Goes Wrong | How to Avoid It |
|---|---|---|
| Not opening a LISA early enough | 12-month minimum holding period means you cannot use it even if you have the money | Open a LISA immediately with even £1; you can add funds later |
| Saving exactly the deposit amount | Solicitor fees, searches, and other costs leave you short | Budget for deposit + 10–15% extra for fees and costs |
| Not declaring all deposit sources | Mortgage offer delayed or withdrawn if undeclared sources are discovered during checks | Tell your broker about every source of deposit funds upfront — savings, gifts, loans, investments |
| Gifted deposit without proper documentation | Solicitor cannot proceed without proof of source; delays exchange | Get the gifted deposit letter, ID, and bank statements from the giftor before you need them |
| Relying entirely on developer incentives | Lender caps incentives; down-valuation wipes out the benefit | Have a fallback plan if the lender values the property below the purchase price |
| Forgetting stamp duty is separate from deposit | Stamp duty is due on completion and is not part of your deposit — but it is a large cash cost (second-time buyers especially) | Calculate stamp duty separately and ensure those funds are available alongside your deposit |
| Assuming 5% is always available for new builds | Many lenders require 10–15% for new build flats and off-plan; 5% may only be available through Deposit Unlock | Check specific lender criteria for your property type before assuming deposit level |
| Moving deposit money around before completion | Solicitor needs a clear audit trail; moving money between accounts creates compliance questions | Keep deposit funds in one account once you start the buying process. If you must move funds, keep clear records |
Deposit Checklist: Before You Reserve
| ✓ | Action | Why It Matters |
|---|---|---|
| ☐ | Confirm your total deposit amount and source documentation | Mortgage application requires proof of every pound |
| ☐ | Get a mortgage agreement in principle for a new build at your deposit level | Confirms lenders will lend on a new build at your LTV — not all will |
| ☐ | Check LISA eligibility and 12-month rule if applicable | Cannot use LISA funds if account is less than 12 months old |
| ☐ | If using a gifted deposit, prepare the letter, ID, and bank statements now | Delays at this stage hold up the entire purchase |
| ☐ | Calculate stamp duty separately from your deposit budget | Stamp duty is a separate cash cost — do not include it in your deposit figure |
| ☐ | Budget an additional £3,000–£5,000 for fees and moving costs | These costs are on top of your deposit and stamp duty |
| ☐ | Ask the developer about Deposit Unlock or deposit contribution schemes | May allow a lower deposit than standard lender requirements |
| ☐ | Ask your solicitor to negotiate stakeholder deposit terms | Protects your exchange deposit if the developer faces financial difficulty |
| ☐ | Understand the reservation agreement refund terms before paying | Know your rights before the reservation fee leaves your account |
| ☐ | Have contingency funds for a potential down-valuation | If the lender values the property below the purchase price, you need to cover the difference |
Stamp Duty and Your Deposit: A Quick Reference
Stamp duty (SDLT in England and Northern Ireland) is separate from your deposit but is a major cash cost that must be available at completion. Current rates from April 2025:
| Price Band | First-Time Buyer Rate | Standard Rate | Additional Property Rate |
|---|---|---|---|
| Up to £125,000 | 0% (nil-rate up to £300,000 for FTB) | 0% | 5% |
| £125,001–£250,000 | 0% (within FTB nil-rate) | 2% | 7% |
| £250,001–£300,000 | 0% (within FTB nil-rate) | 5% | 10% |
| £300,001–£425,000 | 5% (FTB relief applies up to £425,000) | 5% | 10% |
| £425,001–£925,000 | 5% (no FTB relief above £425,000) | 5% | 10% |
| £925,001–£1,500,000 | 10% | 10% | 15% |
| Over £1,500,000 | 12% | 12% | 17% |
Scotland uses Land and Buildings Transaction Tax (LBTT) with a nil-rate band of £145,000 and 8% additional dwelling supplement. Wales uses Land Transaction Tax (LTT) with a nil-rate band of £225,000 and 4% higher rates surcharge. For a full stamp duty breakdown with worked examples, see our Complete New Build Budget Planner.