What Is a Reservation Fee?
A reservation fee is a payment you make to the developer to take a specific plot off the market. Once you pay it, the developer agrees not to sell that plot to anyone else for a fixed period (the 'reservation period'), giving you time to instruct a solicitor, arrange your mortgage, and progress towards exchange of contracts.
The reservation fee is not the same as the exchange deposit. The exchange deposit (usually 10% of the purchase price) is a much larger sum paid when contracts are formally exchanged. The reservation fee is a smaller initial payment that precedes the formal legal process.
| Payment | When Paid | Typical Amount | Purpose | Part of Purchase Price? |
|---|---|---|---|---|
| Reservation fee | Day you reserve (in the sales office) | £500-£5,000 | Takes the plot off the market | Usually yes — deducted from the exchange deposit or purchase price |
| Exchange deposit | When contracts are exchanged (typically 4-12 weeks later) | 10% of purchase price | Contractually commits both parties to the sale | Yes — part of the purchase price |
| Completion balance | On completion day | Remaining 90% (minus mortgage) | Pays for the property in full | Yes |
How Much Is the Reservation Fee?
Reservation fees vary by developer, property type, and price. Here's what to expect:
| Developer Type | Typical Fee Range | Notes |
|---|---|---|
| National housebuilders (Barratt, Taylor Wimpey, Persimmon, Bellway) | £500-£1,000 | Standardised across most sites; sometimes waived during promotional events |
| Regional and mid-sized developers | £500-£2,000 | Varies more widely; may be negotiable |
| Premium/luxury developers (Berkeley, Crest Nicholson high-end) | £1,000-£5,000 | Higher fees on more expensive properties |
| Small/local developers | £250-£1,000 | More flexibility; some may accept lower amounts |
| Shared ownership (through housing associations) | £0-£500 | Some housing associations don't charge a reservation fee; others charge a nominal amount |
How the Fee Is Typically Paid
- Debit card: Most common method in the sales office
- Credit card: Some developers accept credit cards — this can give you Section 75 consumer protection on purchases over £100
- Bank transfer: Sometimes accepted if paying remotely
- Cheque: Occasionally accepted but rare in practice
Tip: If the developer accepts credit card payment, using a credit card for the reservation fee gives you additional protection under Section 75 of the Consumer Credit Act 1974. If the developer breaches the agreement and refuses to refund, you can claim from the credit card company. This only applies to credit cards, not debit cards.
The Reservation Agreement: What You're Actually Signing
When you pay the reservation fee, you'll also sign a reservation agreement. This is not the contract of sale (that comes later), but it is a binding document that creates obligations for both you and the developer. Here's what it typically contains:
| Clause | What It Says | What It Means for You |
|---|---|---|
| Plot identification | The specific plot number, house type, and site you're reserving | Confirms exactly which property you're buying — check this matches what you discussed |
| Purchase price | The agreed price for the property | This price is fixed from this point (subject to any incentives being finalised) |
| Reservation fee amount | How much you're paying and how it will be applied | Usually deducted from the exchange deposit — confirm this in writing |
| Reservation period | How long the developer will hold the plot for you (typically 28 days) | You must exchange contracts within this period or the reservation may be cancelled |
| Exchange deadline | The date by which contracts must be exchanged | If you don't exchange by this date, the developer can cancel and may keep your fee |
| Refund terms | When the fee is refundable and when it isn't | Critical — read these carefully before signing |
| Buyer obligations | You must instruct a solicitor, apply for a mortgage, and cooperate with the process | You're expected to act promptly — delays on your side may trigger cancellation |
| Developer obligations | Developer must instruct their solicitors to send the contract pack to your solicitor | If the developer delays sending the contract pack, this affects your ability to meet the exchange deadline |
| Incentives and extras | Any agreed incentives (flooring, appliance upgrades, financial contributions) | Get everything in writing here — verbal promises not in this document are hard to enforce later |
| Cancellation terms | How either party can cancel the reservation | Check whether the developer can cancel unilaterally and what happens to your fee if they do |
| Specification reference | Reference to the specification or show-home that you're buying against | Confirms what's included in the purchase |
| Anti-money laundering checks | You consent to identity and source-of-funds checks | Standard legal requirement — you'll need to provide ID and proof of deposit source |
The 28-Day Exchange Deadline: How It Works and Why It Matters
The most consequential clause in most reservation agreements is the exchange deadline — typically 28 days from the date you sign. Within this period, you're expected to:
- Instruct a solicitor (day 1-3)
- Apply for a mortgage and get an Agreement in Principle (should ideally be done before reserving)
- Wait for the developer's solicitors to send the contract pack to your solicitor (typically 1-3 weeks)
- Wait for your solicitor to review the contract pack and raise enquiries
- Wait for the developer's solicitors to respond to enquiries
- Wait for searches to be ordered and returned
- Receive a formal mortgage offer
- Sign and exchange contracts
Is 28 Days Realistic?
| Task | Realistic Timeframe | Common Delays |
|---|---|---|
| Contract pack sent by developer's solicitors | 1-3 weeks | Developer's solicitors handle hundreds of plots; packs are often late |
| Your solicitor reviews the pack | 3-7 days | If your solicitor is busy, it may take longer; new build packs are large and complex |
| Enquiries raised and answered | 1-3 weeks | Developer's solicitors batch-process replies |
| Searches ordered and returned | 2-4 weeks | Local authority search turnaround varies hugely by council area |
| Mortgage offer issued | 2-4 weeks from application | Valuation delays, lender processing times, additional information requests |
As you can see, 28 days is tight — especially if the developer's solicitors take 2-3 weeks to send the contract pack, which is common. Many buyers find it impossible to exchange within 28 days through no fault of their own.
What Happens If You Can't Exchange in Time?
If the 28-day deadline passes without exchange:
- The developer may extend the deadline (often by another 14-28 days) if progress is being made
- The developer may cancel the reservation and keep your fee
- The developer may cancel the reservation but refund your fee (more likely if the delay was the developer's fault)
- The developer may re-release the plot to other buyers while keeping your fee
In practice, most developers will grant an extension if they can see that the solicitor and mortgage process is progressing. They want to sell the plot, not cancel reservations. But if you haven't instructed a solicitor, haven't applied for a mortgage, or aren't responding to your solicitor's requests, the developer has grounds to cancel.
How to Protect Yourself Against the 28-Day Deadline
| Action | When | Why |
|---|---|---|
| Get a mortgage Agreement in Principle | Before visiting developments | Shows you can afford the property and speeds up the formal application |
| Research solicitors in advance | Before reserving | You can instruct them the same day you reserve, saving critical days |
| Choose a solicitor with new build experience | Before reserving | They'll review the contract pack faster and know which checks are critical |
| Respond to your solicitor promptly | Throughout the process | Every day you delay in responding adds to the timeline |
| Chase your mortgage broker | Weekly | Mortgage applications need active management; don't assume it's progressing |
| Ask the developer about typical pack turnaround | At reservation | If they say '2-3 weeks for the contract pack,' you know 28 days is unrealistic |
| Negotiate a longer reservation period | At reservation | 42 days is more realistic; some developers will agree if asked |
Is the Reservation Fee Refundable?
This is the question every buyer asks — and the answer depends on the circumstances and the specific terms of the reservation agreement.
| Scenario | Fee Refundable? | Explanation |
|---|---|---|
| You exchange contracts and complete the purchase | Yes (deducted from price) | The reservation fee is usually offset against the exchange deposit or final purchase price |
| Developer withdraws the property from sale | Yes | Consumer Code requires a full refund if the developer withdraws the plot |
| Developer fails to send the contract pack within a reasonable time | Should be yes | Consumer Code requires the developer to progress within a reasonable period; failure to do so should trigger a refund |
| Your mortgage is declined and you can't proceed | Varies | Some developers refund in this situation; others don't. Check the agreement terms |
| Your solicitor identifies a serious legal issue | Varies | A legitimate reason to withdraw, but some agreements don't distinguish between reasons for withdrawal |
| Survey or valuation comes back unsatisfactory | Varies | Similar to mortgage decline — some developers refund, some don't |
| You simply change your mind | Usually no | Most agreements state the fee is non-refundable if you withdraw without cause |
| You can't exchange within the reservation period (your fault) | Usually no | If you failed to instruct a solicitor or progress the mortgage, the developer is likely to keep the fee |
| You can't exchange within the reservation period (developer's fault) | Should be yes | If the contract pack was late or the developer's solicitors caused delays, you have a strong case for a refund |
Consumer Code Protection
The Consumer Code for Home Builders (2024 edition) provides specific protections regarding reservation fees:
- The reservation agreement must clearly state the terms under which the fee is refundable
- The developer must reimburse the reservation fee if they withdraw the plot from sale
- The developer must reimburse the reservation fee if they fail to provide the contract pack within a reasonable time (allowing for the exchange deadline)
- The developer must not put unreasonable time pressure on the buyer to exchange
However, the Consumer Code doesn't require a refund in all circumstances. If you withdraw voluntarily or fail to progress the purchase without good reason, the developer can retain the fee. The code's dispute resolution service can hear complaints about unreasonable refusal to refund.
How to Maximise Your Chance of Getting a Refund
- Document everything: Keep records of when you instructed your solicitor, when the contract pack was (or wasn't) received, and what caused any delays
- Communicate in writing: Use email rather than phone calls so you have a paper trail
- Reference the Consumer Code: If you believe the developer should refund your fee, cite the specific code requirements
- Escalate formally: Write to the developer's customer service or complaints team, not just the sales office
- Use the dispute resolution service: If the developer refuses a refund you believe is owed, the Consumer Code's independent dispute resolution scheme can adjudicate
- Credit card chargeback: If you paid by credit card and the developer is in breach, you may have a claim under Section 75
What the Reservation Agreement Should Include
Before signing, check that the agreement includes all of the following:
| Essential Element | Why It Matters | Red Flag If Missing |
|---|---|---|
| Full plot details (number, house type, address) | Confirms exactly what you're buying | Vague descriptions could allow the developer to switch plots |
| Agreed purchase price | Locks in the price from this date | No price means the developer could increase it later |
| Reservation fee amount and how it will be applied | Confirms the fee is deducted from the purchase price | Fee described as 'administration charge' or 'non-refundable processing fee' that isn't offset against the price |
| Reservation period (with specific end date) | Gives you a clear timeline | No end date or 'at the developer's discretion' — gives the developer total control |
| Clear refund terms | Tells you when you can and can't get your money back | No refund terms at all — or blanket 'non-refundable in all circumstances' |
| Developer's obligation to provide contract pack | Creates accountability for the developer to progress | No mention of when the contract pack will be sent — gives the developer licence to delay |
| Any agreed incentives in writing | Documents the deal you've agreed | Incentives mentioned verbally but not written in the agreement |
| Cooling-off period (if applicable) | Some developers offer a short cooling-off period after signing | No cooling-off period isn't necessarily a red flag — it's not required — but check if one exists |
| Developer's registration with Consumer Code | Confirms Consumer Code protections apply | Developer not registered — means you don't have the Consumer Code safety net |
Common Problems with Reservation Agreements
| Problem | How It Happens | How to Avoid It |
|---|---|---|
| Pressure to sign immediately | Sales adviser says 'another buyer is interested' or 'this is the last plot at this price' | Ask for 24 hours to consider. A genuine developer won't lose a sale over one day. If they pressure you, that's a warning sign |
| Fee described as non-refundable in all circumstances | Agreement makes no distinction between buyer withdrawal and developer breach | Push back before signing. Consumer Code protections should override blanket non-refundability |
| Incentives not written down | Sales adviser verbally agrees to flooring/stamp duty contribution but it's not in the agreement | Refuse to sign until all agreed incentives are documented in the reservation agreement |
| Contract pack delays | Developer's solicitors take 3-4 weeks to send the pack, eating into your 28-day exchange deadline | Ask the sales office when the pack will be sent. If they can't give a clear answer, raise this with your solicitor |
| Unrealistic exchange deadline | 28 days is impossible given the developer's own delays in providing documents | Negotiate a 42-day or 56-day reservation period before signing. If the developer insists on 28 days, build in your readiness beforehand |
| Hidden terms | Agreement references other documents (specifications, estate plan) that you haven't seen yet | Ask to see all referenced documents before signing. Don't agree to terms based on documents you haven't reviewed |
| Developer changes the plot or specification after reservation | Developer allocates you a different plot or changes the specification before exchange | The reservation agreement should specify your exact plot and reference the agreed specification. Any change should trigger a refund option |
What to Do Before You Pay a Reservation Fee
The reservation fee creates the first financial and legal commitment of the buying process. Before you pay, make sure you've completed these steps:
Financial Preparation
| Step | Why It Matters | Done? |
|---|---|---|
| Get a mortgage Agreement in Principle (AIP) | Confirms you can borrow enough; speeds up the formal application | |
| Confirm your deposit amount and source | You'll need to declare where your deposit is coming from (anti-money laundering) | |
| Check your credit report | Surprises on your credit report can derail a mortgage application | |
| Budget for all costs (not just the purchase price) | Solicitor fees, searches, stamp duty, moving costs — see our deposit guide for full cost tables | |
| Understand the ongoing costs | Council tax, service charges, estate charges — see our running costs guide |
Legal Preparation
| Step | Why It Matters |
|---|---|
| Research and shortlist solicitors | Ready to instruct on the day you reserve — don't waste days finding a solicitor |
| Choose a solicitor with new build experience | They'll review the contract pack efficiently and spot new build-specific issues |
| Ask the solicitor about their typical turnaround | Ensure they can work within the exchange deadline |
| Understand the conveyancing process | Know what happens after reservation — see our conveyancing guide |
Property Due Diligence
| Step | Why It Matters |
|---|---|
| Visit the development (ideally more than once) | See the location at different times of day; check transport, amenities, noise levels |
| Ask about the specification | What's included? What's the show-home vs what you actually get? |
| Ask about estate/service charges | Know the ongoing costs before you commit — see our service charges guide |
| Check the EPC rating | New builds should typically be A or B; anything lower is surprising |
| Research the developer | Check reviews from other buyers, NHBC registration, build quality reputation |
| Ask about the build timeline | When will the property be ready? Is it off-plan or nearing completion? |
| Check planning applications nearby | Are there future developments, roads, or commercial buildings planned nearby? |
Reservation Fees by Major Developer
While fees change over time and may vary by site, here's what the major UK housebuilders typically charge as of early 2026:
| Developer | Typical Reservation Fee | Typical Reservation Period | Refund Policy (General) |
|---|---|---|---|
| Barratt / David Wilson | £500 | 28 days | Deducted from purchase price; refund depends on circumstances |
| Taylor Wimpey | £500 | 28 days | Non-refundable if buyer withdraws; refundable if developer withdraws |
| Persimmon / Charles Church | £500 | 28 days | Deducted from price; refund terms in agreement |
| Bellway | £500-£1,000 | 28 days | Varies by site |
| Redrow | £500-£1,000 | 28 days | Refund depends on reason for withdrawal |
| Berkeley Group | £1,000-£5,000 | 28 days | Higher fees on premium properties; terms vary |
| Crest Nicholson | £500-£1,000 | 28 days | Standard terms; check specific site agreement |
| Vistry (Bovis / Linden) | £500 | 28 days | Standard terms |
Important: These are general indications. The actual fee, reservation period, and refund terms are set out in the specific reservation agreement you sign for your plot. Always read the agreement rather than relying on general information.
Can You Negotiate the Reservation Fee?
Yes, in some circumstances:
| Negotiation | Likelihood of Success | When It Works Best |
|---|---|---|
| Reduce the fee amount | Low for national developers; Medium for smaller developers | Slow sales period; developer needs sales to hit targets |
| Make the fee fully refundable | Low | Very slow market; developer desperate for sales |
| Extend the reservation period to 42+ days | Medium | When you explain the realistic timeline for conveyancing; particularly if buying off-plan |
| Add incentives to the agreement | Medium-High | Developer motivated to secure the sale; incentives cost less than losing a buyer |
| Waive the fee entirely | Low for standard sales; occasionally offered during promotional events | Developer promotions ('reserve for free this weekend') |
The most valuable negotiation is usually extending the reservation period rather than reducing the fee. An extra 14-28 days reduces the risk of losing your fee due to conveyancing delays.
What Happens After You Reserve?
Once you've paid the reservation fee and signed the agreement, the conveyancing process begins in earnest. Here's the typical sequence:
| Step | Who Does It | Typical Timeframe |
|---|---|---|
| 1. Instruct your solicitor | You | Day 1-3 (ideally same day) |
| 2. Submit formal mortgage application | You / your broker | Day 1-7 |
| 3. Developer instructs their solicitors | Developer | Day 1-5 |
| 4. Developer's solicitors prepare and send the contract pack | Developer's solicitors | 1-3 weeks (sometimes longer) |
| 5. Your solicitor receives and reviews the contract pack | Your solicitor | 3-7 days after receipt |
| 6. Your solicitor raises enquiries | Your solicitor | Same week as review |
| 7. Developer's solicitors answer enquiries | Developer's solicitors | 1-3 weeks |
| 8. Searches ordered and returned | Your solicitor | 2-4 weeks (ordered early, ideally at step 5) |
| 9. Mortgage valuation and offer issued | Lender | 2-4 weeks from application |
| 10. Your solicitor provides report on title | Your solicitor | Once enquiries and searches are complete |
| 11. You review the report and sign the contract | You | 1-3 days |
| 12. Exchange of contracts | Both solicitors | Once all elements are in place |
For a detailed guide to each stage, see our complete new build conveyancing guide. For what to look for in the contract itself, see our new build contracts guide.
Cooling-Off Periods
Unlike some consumer purchases, there is no automatic statutory cooling-off period for reservation agreements on new build homes. Once you sign and pay, you're committed to the terms of the agreement.
However:
- Some developers voluntarily offer a cooling-off period (typically 7-14 days) — check the agreement
- The Consumer Code for Home Builders states that buyers should have 'adequate time' to consider the reservation terms — but doesn't specify a cooling-off period
- If you paid by credit card and were misled by the developer, you may have additional cancellation rights
- If the developer is using high-pressure sales tactics ('sign now or lose the plot'), this could constitute a breach of the Consumer Code and potentially the Consumer Protection from Unfair Trading Regulations 2008
Shared Ownership Reservations
Reserving a shared ownership new build is slightly different from a standard purchase:
| Element | Standard Purchase | Shared Ownership |
|---|---|---|
| Who you reserve with | The developer's sales team | Usually the housing association (not the developer directly) |
| Reservation fee | £500-£5,000 | £0-£500 (often lower or waived) |
| Eligibility check | Not required | You must pass an eligibility assessment (household income, existing property ownership, local connection) |
| Financial assessment | Your choice of mortgage broker/lender | Often required to use the housing association's approved financial adviser (free) |
| Reservation period | Typically 28 days to exchange | Can be longer — shared ownership conveyancing is more complex |
| The share you're buying | N/A — you buy the whole property | Typically 25-75% — agreed at reservation |
| Rent on remaining share | N/A | Set by the housing association — confirmed in the reservation |
For a comprehensive guide to shared ownership, including staircasing, costs, and eligibility, see our shared ownership guide.
What If the Developer Cancels Your Reservation?
Developers can cancel reservations for several reasons:
- Exchange deadline passed: You didn't exchange within the reservation period
- Lack of progress: You haven't instructed a solicitor or applied for a mortgage
- Anti-money laundering failure: You couldn't pass identity or source-of-funds checks
- Developer withdraws the plot: Plot taken off the market for commercial reasons
If the developer cancels:
| Reason for Cancellation | Your Refund Rights |
|---|---|
| Developer withdraws the plot from sale | Full refund — Consumer Code requires this |
| Developer fails to provide contract pack in time | Strong case for full refund under Consumer Code |
| Exchange deadline passed due to developer delays | Strong case for full refund — document the delays |
| Exchange deadline passed due to your delays | Refund unlikely unless agreement states otherwise |
| You failed AML checks | Usually refunded minus any administration fee |
| Developer found a higher-paying buyer (though they won't admit this) | Full refund — and potentially a Consumer Code complaint |
Reservation Agreement Checklist
Before signing the reservation agreement and paying the fee, confirm all of the following:
- The plot number, house type, and price are correct
- All agreed incentives and extras are written in the agreement
- The reservation period is clearly stated with a specific end date
- The refund terms are clear and you understand when you can and can't get your money back
- The fee will be deducted from the purchase price (not treated as a separate administration charge)
- You have a mortgage Agreement in Principle in place
- You have a solicitor ready to instruct
- You have visited the development and are confident about the location
- You understand the specification — what's included and what's not
- You know whether the property is leasehold or freehold and understand the implications
- You've asked about estimated service charges and estate charges
- You've asked about the build timeline and expected completion date
- You've researched the developer's reputation and build quality
- You have the deposit funds available (or a clear plan to accumulate them before exchange)
- You're not being pressured into signing immediately — you've had time to consider
Frequently Asked Questions
Can I reserve more than one plot?
Technically yes, but each reservation requires a separate fee and agreement. Most developers won't allow you to hold multiple reservations on the same development. Reserving multiple plots with different developers is possible but you'll need separate mortgage applications and solicitor instructions for each, and you'll lose the reservation fee on any plot you don't proceed with.
Can I change the plot after reserving?
Sometimes. If you want to switch to a different plot on the same development, the developer may agree to transfer your reservation (potentially with a different price). This is at the developer's discretion — they're not obligated to agree. The original reservation agreement would typically be cancelled and replaced with a new one.
What if I can't get a mortgage?
If your mortgage application is declined, check the refund terms in your reservation agreement. Some developers will refund the fee in this situation; others won't. If the agreement doesn't specifically address mortgage decline, you may have a case for a refund on the basis that you couldn't reasonably proceed, but this isn't guaranteed.
Is the reservation fee the same as an option fee?
Similar concept, different context. 'Option fee' is more commonly used in self-build or land purchases, where you pay for the exclusive right to buy a piece of land within a set period. 'Reservation fee' is the standard term for new build developer sales. The practical effect is similar: you pay money to hold a specific property for a limited time.
Do I need a solicitor before I reserve?
Legally, no — you don't need a solicitor to sign a reservation agreement. But practically, having a solicitor already identified (even if not formally instructed) means you can instruct them immediately after reserving, maximising the time available within the 28-day deadline.
What if the developer increases the price after I reserve?
The reservation agreement should lock in the price. If the developer tries to increase the price after you've signed, this would typically be a breach of the reservation agreement and the Consumer Code. You should be entitled to proceed at the agreed price or receive a full refund.
Related Guides
- New Build Conveyancing: The Complete Process from Instructing a Solicitor to Getting Your Keys
- How New Build Conveyancing Differs from Resale
- New Build Contracts Decoded: Every Clause Explained and What to Negotiate
- Shared Ownership: The Complete Guide to Buying a New Build on Shared Ownership
- How Much Deposit Do You Need for a New Build Home?