Why New Build Costs Are Different from Resale Properties
Buying a new build has a different cost profile to buying an older property. Some costs are lower — you don't need a homebuyer's survey, for example, and you won't face immediate repair bills. But other costs are higher or unique to new builds: reservation fees, premium pricing over comparable resales, and the reality that you're moving into a completely empty, unfurnished home with no curtain rails, no shelving, and sometimes no turf in the garden.
The biggest mistake first-time buyers make is budgeting only for the deposit and assuming everything else is minor. On a £300,000 new build, the "everything else" can easily exceed £15,000. Planning for these costs upfront prevents the stress of scrambling for cash in the weeks before completion.
Stage 1: Before You Start Looking (£0–£500)
Credit Report Check — Free
Before anything else, check your credit report with all three agencies: Experian, Equifax, and TransUnion. Use free services like ClearScore, Credit Karma, or MSE Credit Club. Fix any errors — a wrong address or a missed payment you've actually paid can reduce your mortgage options and increase your interest rate, costing thousands over the mortgage term.
Agreement in Principle (AIP) — Free
Most lenders offer a free AIP (also called a Decision in Principle). This tells you the maximum you can borrow and shows developers you're a serious buyer. Some developers won't let you reserve a plot without one. AIPs typically last 60–90 days and use a soft credit search, so they don't affect your credit score.
Mortgage Broker Fee — £0–£500
Some brokers charge nothing upfront and earn commission from the lender. Others charge a flat fee of £300–£500 for a whole-of-market search. A good broker is almost always worth it on a new build — they know which lenders accept new build valuations, which ones allow developer incentives, and which have the fastest turnaround times to meet build completion dates. Many first-time buyers use a fee-free broker and get excellent results.
Stage 2: Reserving Your Plot (£500–£1,500)
Reservation Fee — £500–£1,000
When you choose a plot, the developer takes it off the market in exchange for a reservation fee. This is typically £500 for homes under £300,000 and £1,000 for properties above that. The fee is usually deducted from your purchase price at completion, but read the terms carefully — some developers make all or part of it non-refundable if you pull out after a specified period (often 28 days).
On new builds, the reservation agreement is a critical document. It locks in the purchase price, any agreed upgrades or incentives, and sets a deadline (usually 28 days) to exchange contracts. Your solicitor should review this before you sign.
Upgrades and Options — £0–£10,000+
Most developers offer optional upgrades: upgraded kitchen worktops (£1,500–£4,000), built-in wardrobes (£800–£2,500 per room), underfloor heating (£2,000–£5,000), or enhanced tiling packages (£500–£2,000). These are added to the purchase price or paid separately. They're tempting, but be selective — some upgrades (like an enhanced kitchen) add genuine value, while others (like special light switches) are overpriced compared to getting them fitted independently after completion.
If you're using a government scheme like Shared Ownership, check whether upgrade costs affect your share percentage or are treated separately.
Stage 3: Mortgage and Valuation Costs (£0–£2,500)
Mortgage Arrangement Fee — £0–£1,999
Some of the best mortgage rates come with an arrangement fee (also called a product fee). This ranges from £0 to £1,999. You can pay it upfront or add it to your mortgage — but adding it means you pay interest on the fee for the entire mortgage term, which on a £999 fee at 4.5% over 30 years adds roughly £900 in interest.
Fee-free mortgages exist but typically come with a slightly higher interest rate. Run the numbers both ways. On a £300,000 mortgage, a 0.1% rate difference costs approximately £300 per year, so a £999 fee is worth paying if it saves you more than 0.33% on the rate.
Mortgage Valuation — £0–£500
Your lender needs to confirm the property is worth what you're paying. Many lenders offer free valuations, especially for first-time buyers or on certain product ranges. Where charged, expect £150–£500 depending on property value. On new builds, the valuation is desk-based or a brief site visit — the valuer checks comparable sales in the area, not the condition of the property.
Important: new builds sometimes down-value. If the valuer decides the property is worth less than the purchase price, your lender will only mortgage the lower figure. This means you need a larger deposit to cover the gap — or you renegotiate the price with the developer. This happens more often than developers admit, particularly on early phases of large developments. Read our guide on mistakes first-time buyers make to prepare for this scenario.
Higher Lending Charge — Rare
If you're borrowing above 90% loan-to-value, a small number of lenders charge a higher lending charge (HLC) to cover their additional risk. This is increasingly rare but can be £100–£300 if applicable. Your broker will flag this.
Stage 4: Legal and Conveyancing Costs (£1,500–£3,500)
Solicitor's Fees — £1,200–£2,500
Your solicitor (or licensed conveyancer) handles the legal transfer of ownership. New build conveyancing is more complex than resale because they also review:
- The developer's title and planning permissions
- Building regulations compliance certificates
- NHBC (or equivalent) warranty documentation
- Section 106 agreements and any planning obligations
- Management company setup and service charge structure
- Adoption of roads and sewers (Section 38 and Section 104 agreements)
For this reason, new build conveyancing typically costs £200–£500 more than resale conveyancing. Get a fixed-fee quote that includes all the items above. Avoid solicitors who quote low then add disbursements for every additional document — you can end up paying more overall.
Searches — £250–£400
Your solicitor will order local authority searches, environmental searches, and water/drainage searches. These check for things like flood risk, contaminated land, planned road schemes, and whether the property is connected to mains drainage. On a new build, these are especially important because the development may be on former industrial land or in an area with planned infrastructure changes.
- Local authority search: £100–£200 (varies hugely by council — some take 2 weeks, others take 8)
- Environmental search: £40–£80
- Water and drainage search: £40–£60
- Chancel repair liability search: £20–£30
- Mining/tin/clay search (if applicable): £30–£50
Land Registry Fee — £95–£270
Registering your ownership with HM Land Registry costs £95–£270 depending on the property price. For a £300,000 property, the fee is £270. If you apply electronically (which most solicitors do), there's a small discount.
Stamp Duty Land Tax — £0–£6,250 for FTBs
First-time buyers in England and Northern Ireland currently pay no stamp duty on the first £300,000, then 5% on the portion between £300,001 and £500,000. So on a £300,000 new build, you pay zero stamp duty. On a £350,000 property, you'd pay £2,500 (5% of the £50,000 above £300,000). Properties above £500,000 don't qualify for first-time buyer relief, and you pay standard rates.
Note: These thresholds changed in April 2025 when the temporary increase ended. The current first-time buyer nil-rate band is £300,000 (down from the temporary £425,000). Always verify the current rates at gov.uk before budgeting.
Leasehold Costs (If Applicable) — £100–£500
If your new build is leasehold (common for flats, increasingly rare for houses after the leasehold scandal), there may be additional legal costs: reviewing the lease, checking ground rent escalation clauses, and ensuring the freeholder's management company terms are acceptable. Some solicitors include this in their new build fee; others charge extra. Ask upfront.
Stage 5: The Deposit (5%–10% of Purchase Price)
How Much Do You Actually Need?
The deposit is your largest single cost. Most first-time buyers aim for 5–10% of the purchase price:
- 5% deposit on £300,000: £15,000 — available with many lenders, but you'll pay higher mortgage rates and need to pay mortgage insurance (built into the rate)
- 10% deposit on £300,000: £30,000 — significantly better mortgage rates (typically 0.3–0.5% lower), which saves £900–£1,500 per year on repayments
- 15% deposit on £300,000: £45,000 — the sweet spot for the best mainstream rates
On a new build, your deposit might be structured differently. You'll typically pay 10% at exchange of contracts (held by a stakeholder or the developer's solicitor). If you only have a 5% deposit, your mortgage lender covers the difference between your deposit and the exchange deposit — but this needs to be arranged in advance. Some developers accept a 5% exchange deposit on certain plots.
Where Can Your Deposit Come From?
Savings accounts, Lifetime ISA (up to £1,000/year government bonus), gifts from family (lenders require a gifted deposit letter confirming it's not a loan), or government schemes like Shared Ownership (where you only need a deposit on your share). Help to Buy equity loans are no longer available in England (closed March 2023).
Stage 6: Insurance Costs (£300–£800/year)
Buildings Insurance — £150–£400/year
Your mortgage lender requires buildings insurance from the date of exchange (or completion, depending on the contract). On a new build, the developer's insurance covers the structure until legal completion, but you need your own policy from day one of ownership. New builds tend to have lower buildings insurance premiums because everything is new and built to current regulations — no old wiring, no aging roof, no subsidence history.
On a leasehold flat, buildings insurance is usually arranged by the freeholder and charged through the service charge — you don't arrange it separately.
Contents Insurance — £100–£300/year
Not legally required but strongly recommended. You're filling a brand new home with brand new furniture — the replacement cost is higher than you think. Get a policy before you move anything in.
Life Insurance — £10–£50/month
Not compulsory but most mortgage advisers recommend level term life insurance to cover the mortgage if you die during the term. For a £285,000 mortgage over 30 years, a healthy 30-year-old might pay £12–£25 per month. Joint life policies for couples are slightly cheaper than two single policies. Your broker can arrange this alongside your mortgage.
Stage 7: Moving and Settling In (£1,000–£5,000)
Removals — £300–£1,500
If you're a first-time buyer moving from rented accommodation, your removal costs are typically lower than a family upsizing. A man-and-van service costs £300–£600 for a one-bed flat's worth of belongings. A professional removals company with packing for a two-bed flat runs £600–£1,200. If you're moving long distance (over 50 miles), add 30–50% to these figures.
Utility Setup — £0–£200
New builds come with all utilities connected, but you need to set up accounts. Gas and electricity will be with a default supplier — you can switch immediately. Broadband takes 1–2 weeks to activate (order it 2 weeks before completion if the development has been connected). Budget £50–£100 for a broadband router if needed, and £100–£150 per month for combined energy/broadband/water going forward.
Council Tax — Immediate
You're liable for council tax from completion day. New builds are assessed by the Valuation Office Agency, and the band might not be assigned for several weeks — you'll pay an estimated amount initially. First-time buyers sometimes get a shock: a new four-bed detached in Band E or F can cost £2,500–£3,500 per year depending on the local authority. Check the likely band before committing — you can search existing properties on the same development at gov.uk/council-tax-bands.
Royal Mail Redirect — £36–£99
Redirect your post for at least 6 months (£36 for 3 months, £52 for 6 months, £71 for 12 months). On a new build, your address might not be recognised by all databases immediately — update your address with your bank, DVLA, employer, GP, dentist, subscriptions, and electoral register as soon as possible.
Stage 8: Furnishing a Brand New Home (£3,000–£15,000+)
This is the cost that catches first-time buyers most off-guard. A new build comes with nothing except the kitchen units, bathroom fittings, and a boiler. Everything else is on you.
Essential Items (Budget Minimum: £3,000–£5,000)
- White goods (washing machine, fridge-freezer, dishwasher, tumble dryer): £1,200–£2,500. Some developers include integrated appliances — check your specification
- Oven and hob: Often included with the kitchen, but check. If not: £300–£800
- Bed and mattress: £400–£1,200 per bedroom
- Sofa: £400–£2,000 (delivery can take 8–12 weeks for made-to-order)
- Curtains or blinds: £300–£1,500 for a whole house. New builds have larger windows than older properties, which means larger (more expensive) window coverings. Measure after completion — developers' dimensions aren't always exact
- Lighting: £100–£400. Most new builds come with basic pendant fittings — you might want to upgrade living areas
Less Obvious Essentials
- Curtain poles or tracks: £15–£40 per window (not included)
- Toilet roll holders, towel rails, mirrors: £50–£150 total
- TV aerial/satellite: New builds have aerial points but you may need a communal aerial connection (check with the developer) or a dish installed (£80–£150)
- Garden basics: A new build garden is often just turfed (or not even that). Fencing between properties may not be included. Budget £200–£1,000 for basic garden setup
- Shelving and storage: £100–£300. New builds often lack built-in storage beyond bedroom wardrobes (if included)
Smart Strategy: Phase Your Spending
You don't need everything on day one. Prioritise: bed, sofa, white goods, blinds for bedrooms (for privacy and sleep). Everything else can come over the first 6 months as you figure out what you actually need in each space. Living rooms are often bigger or smaller than expected — measure before buying furniture.
Stage 9: Ongoing Monthly Costs in Year One
Beyond the mortgage payment, your monthly outgoings on a new build include:
- Mortgage repayment: On £285,000 at 4.5% over 30 years — approximately £1,444/month
- Council tax: £150–£300/month (depends on band and area)
- Energy (gas and electric): £100–£180/month. New builds are significantly cheaper to heat than older properties — EPC A/B rated homes typically cost 40–60% less in energy than a D-rated Victorian terrace
- Water: £30–£50/month
- Broadband: £25–£45/month
- Buildings and contents insurance: £25–£50/month
- Service charge (if applicable): £100–£250/month for flats; £20–£80/month for houses on managed estates. Covers communal areas, landscaping, bin stores, and any shared facilities
- Ground rent (leasehold only): £0–£250/year. New leases from June 2022 onwards should have a peppercorn (zero) ground rent
Total monthly cost beyond the mortgage: typically £450–£850. This is the figure that often surprises first-time buyers — budget for it from the start. Read more about service charges and running costs to understand what you're committing to.
Worked Example: Buying a £300,000 New Build as a First-Time Buyer
Here's every cost, itemised, for a first-time buyer purchasing a £300,000 three-bed new build house with a 10% deposit:
Upfront Costs (Before Completion)
- Deposit (10%): £30,000
- Reservation fee (deducted from price): £500 (effectively £0 extra)
- Mortgage arrangement fee: £999
- Mortgage valuation: £0 (free with most FTB products)
- Solicitor's fees: £1,800
- Searches and disbursements: £350
- Land Registry fee: £270
- Stamp duty (FTB relief): £0
Total upfront costs: £33,919 (of which £30,000 is your deposit/equity in the property)
Moving and Setup Costs
- Removals: £500
- Royal Mail redirect (6 months): £52
- White goods (washer, fridge-freezer, dishwasher): £1,500
- Bed and mattress (x2): £1,000
- Sofa: £800
- Curtains/blinds (whole house): £800
- Curtain poles, bathroom accessories, odds and ends: £200
- Garden basics (if needed): £300
Total moving/setup: £5,152
First Year Insurance
- Buildings insurance: £250
- Contents insurance: £180
- Life insurance (12 months at £20/month): £240
Total insurance (year 1): £670
Grand Total: Cash Needed
Deposit: £30,000
Fees and legal costs: £3,919
Moving, furnishing, and setup: £5,152
First year insurance: £670
Total cash needed: approximately £39,741
That's nearly £10,000 more than the deposit alone. On top of this, your monthly housing costs (mortgage + bills + council tax) will be approximately £1,900–£2,300 per month. Having an emergency fund of £2,000–£3,000 on top of all this is strongly recommended.
How to Reduce Your Costs
Negotiate Developer Incentives
Most developers offer incentives that directly reduce your upfront costs: stamp duty paid (worth up to £2,500 on a £350k FTB purchase), free flooring and window coverings (worth £2,000–£5,000), contribution to legal fees (£500–£1,000), or free upgrades. These are most available on unsold stock, end-of-phase plots, or during quiet sales periods (January and summer holidays). See our guide on negotiating developer incentives.
Use a Lifetime ISA
If you're under 40, a Lifetime ISA gives you a 25% government bonus on savings up to £4,000/year (maximum £1,000 bonus annually). A couple each saving £4,000/year for 3 years would accumulate £24,000 in savings plus £6,000 in bonuses — £30,000 toward a deposit. The property must cost £450,000 or less.
Choose a Fee-Free Mortgage
If your deposit is tight, a fee-free mortgage saves £999 upfront. The slightly higher interest rate typically costs less than the arrangement fee over a 2 or 5-year fixed term — run the numbers with your broker.
Phase Your Furnishing
Buy essentials only for the first 3 months. You'll save money and avoid buying things that don't fit or that you don't actually need once you're living in the space.
Check What the Developer Includes
Every developer's specification is different. Some include integrated appliances, turf, and fencing as standard. Others charge extra for everything. Ask for the full specification document before you budget — it lists exactly what's included and what isn't.
The Hidden Cost Nobody Mentions: Opportunity Cost
Tying up £30,000–£40,000 in a house means that money isn't earning returns elsewhere. But for most first-time buyers, the alternative is paying rent — which is a guaranteed 0% return. If your mortgage payment is similar to your rent (or lower, which it often is on a new build with a long mortgage term), you're building equity instead of funding someone else's. The maths usually favour buying, especially when you factor in the stability of fixed-rate mortgage payments versus annual rent increases.
The real cost to watch is overextending. Buying the most expensive property you can technically afford leaves no buffer for interest rate rises when your fixed rate ends, unexpected costs, or changes in your income. Budget conservatively, keep that emergency fund, and remember you can always overpay your mortgage later when your income grows.
Your Cost Checklist
Print this and tick off each item as you budget for it:
- ☐ Credit check and AIP — free
- ☐ Mortgage broker fee — £0–£500
- ☐ Reservation fee — £500–£1,000
- ☐ Mortgage arrangement fee — £0–£1,999
- ☐ Mortgage valuation — £0–£500
- ☐ Deposit — 5–10% of purchase price
- ☐ Solicitor — £1,200–£2,500
- ☐ Searches — £250–£400
- ☐ Land Registry — £95–£270
- ☐ Stamp duty — check FTB relief eligibility
- ☐ Buildings insurance — from exchange date
- ☐ Contents insurance — from moving day
- ☐ Life insurance — recommended
- ☐ Removals — £300–£1,500
- ☐ White goods and appliances
- ☐ Furniture essentials (bed, sofa, dining)
- ☐ Curtains/blinds
- ☐ Garden setup
- ☐ Emergency fund — £2,000–£3,000 minimum
- ☐ First month's bills (council tax, energy, water, broadband)