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HomeBuy to LetNew build buy-to-let mortgages

New build buy-to-let mortgages

Last updated on 18th December 2023 by Martin Alexander

A new build property can make an excellent buy-to-let investment for many reasons. Low maintenance, energy efficiency, and immaculate interior are just a few reasons why investing in a new home can have its advantages.

A buy-to-let mortgage for a new build property requires different criteria from buying an older home, which we’ll explore in this guide.

Can I get a buy-to-let mortgage on a new build?

You can get a buy-to-let mortgage on a new build, but the application process is far more strict when compared to older properties. You can improve your chances by having a 25% deposit and applying with a lender that accepts buy-to-let on new homes, as not all do.

It’s difficult for lenders to establish a rental value for new builds, as there is little or no comparable data. Lenders use rental income as a key factor when assessing buy-to-let mortgages, which can cause problems, as there’s no data to verify.

There’s a risk of snagging issues with newly built homes. Although developers usually rectify them, they could cause early void periods and your ability to pay the mortgage. Lenders factor this into their affordability checks.

What about an off-plan property?

You can get a mortgage to buy off-plan, but you’ll have even fewer lenders to apply with. Lenders recognise the risk of buying property off-plan, as they can’t physically assess or survey your property. So, it’s difficult for lenders to decide whether a mortgage will be viable.

Property prices can also change before building works are complete. If lenders approve a mortgage for a certain amount, you have a shortfall, which can put you and your lender at risk.

Delays in completing the build can also occur, which your lender will consider. Even so, if you meet a lender’s buy-to-let criteria, you can get a mortgage, but there are more risks to consider. It also helps to have a well-prepared mortgage application to support your assessment.

What’s the difference between a buy-to-let mortgage and a new build buy-to-let mortgage?

The main difference is that fewer lenders consider buy-to-let for new builds. Furthermore, a lender’s buy-to-let criteria are stricter for new homes than older homes.

Getting a mortgage may be easier on an older, more established home. Deposit requirements start from 20%, and you can get a better rate as there are more lenders to approach. Applications are typically much faster, as lenders have ample rental data to assess compared to new builds.

Criteria and eligibility for a new build buy-to-let

To qualify for a new build mortgage on a buy-to-let, you’ll need to meet the following criteria:

  • 25% deposit. Most buy-to-let mortgages require a 25% deposit, whether you’re buying a new build or an older property.
  • Rental income. Your rental income must meet at least 125% of your mortgage. As there’s not much data for new builds, a rental valuation from a RICS surveyor can support your application.
  • Income from employment. Having another income source can help your application. Lenders need to be confident you can pay your mortgage when your buy-to-let is vacant.
  • Sufficient credit history. You’ll need to pass a credit check to be eligible, as you would with any mortgage type. You can get a buy-to-let mortgage with bad credit, but you’ll likely pay higher rates and a 30% deposit.
  • Landlord experience. Already owning a buy-to-let can give you an advantage when buying a new build to rent out. As newly built homes are high-risk, your experience as a landlord helps.

Advantages and disadvantages of new build buy-to-let

Investing in a new build has advantages, but there are also some disadvantages to consider before applying for a mortgage.


  • There’s often a high tenant demand for new builds. You can charge a premium rent and will likely rent the property faster than usual.
  • New homes are energy efficient, which is now also a landlord requirement. All energy performance certificates (EPC) must be an E or above.
  • New builds require less maintenance, so you’ll have fewer unexpected costs, such as changing a boiler or replacing carpets.
  • Your property should have a 10-year warranty, protecting you against structural defects.
  • Developers may offer buyer incentives, such as an upgraded interior and free appliances.


  • Fewer lenders can result in you paying higher mortgage rates than usual.
  • Strict criteria around new build mortgages mean your application must be watertight. This involves having a good credit rating, a 25% deposit and a high enough income.
  • Snagging issues are common with new builds. Developers usually rectify such problems, but repairs can inconvenience you and your tenants.
  • House prices are more likely to drop as new builds have premium price tags. As a result, it can be harder to remortgage, especially if you have little or no equity.
  • As you pay more for a new build, your mortgage will likely be higher, affecting your rental profit.

How to start your mortgage application

If you’ve found a property or are considering investing in a new build, speak to an advisor. Having a buy-to-let mortgage in place is something you’ll want to have before agreeing to anything else. This way, you’ll have a budget and understand the rent you’d need to qualify for a mortgage.

You can also check the mortgage rates across each lender to determine whether the rent you hope to charge is sufficient. Once you have a budget and an idea of your costs, you can decide whether buying a new build will be profitable for buy-to-let.

About the author

Martin Alexander
Senior Mortgage Advisor

Martin is a senior mortgage advisor who has held a CeMAP qualification for over 15 years while completing an MBA in Global Banking and Finance.