Do New build homes lose value?

Buying a new build is exciting — spotless bathrooms, a brand-new kitchen, great energy efficiency, and no chain to worry about. But one question often lingers in the background: do new builds lose value once you move in?

At Strive, we’re new build mortgage experts working with buyers across the UK. We’ve seen how prices behave — the early premium, the short-term dips, and the long-term recovery. Here’s what actually happens, why values can fall at first, and how you can protect your equity from day one.

Why do new builds lose value in the short term?

It’s common for new builds to lose value in the first couple of years, and there are several reasons why:

• The new build premium – You pay more for being the first owner. Once someone’s lived in it, that premium disappears and the value adjusts to local resale prices.

• Warranties lose value over time – A key selling point is the 10-year structural warranty. When you sell after a few years, the buyer only benefits from what’s left, which makes your home slightly less appealing. You can learn more about what these warranties cover in our guide on new build warranty requirements.

• Incentives can inflate the headline price – Developer perks like cashback, stamp duty paid, or free upgrades make your deal look better but don’t necessarily reflect the true market value. Valuers and lenders strip these out when assessing your home later.

• No Help to Buy or First Homes incentives on resale – Schemes like Help to Buy don’t apply to second-hand sales, and if you bought under the First Homes scheme, resale values can be capped by local restrictions.

• Oversupply in the area – When lots of similar homes go up nearby, the market can become saturated. Too much supply naturally softens prices until demand catches up.

• Market timing – Buying near a market peak means you might see a temporary dip once conditions normalise.

How your deposit affects your risk

Your deposit plays a big part in how protected you are from short-term price movements:

• Small deposit (5%–10%) – You’re more exposed. Even a small price drop could push you into negative equity, making it harder to remortgage later.

• Medium deposit (15%–25%) – You’ve got a buffer, and you’ll usually qualify for better rates too.
  
• Large deposit (40%+) – You’re well-protected. Even if values dip, your low loan-to-value means flexibility and strong remortgage options.

At Strive, we look at your full picture — deposit, developer incentives, build stage, and timing — to find the right lender for your circumstances. You can explore the best new build mortgage lenders to see which providers tend to offer competitive rates and flexible criteria.

Do new builds go up in value?

Yes, over time most do — especially in strong locations. Once the development is complete and the local area matures, values usually recover and rise in line with the wider market.

You’re most likely to see strong growth when:

• You buy early in a development before later price rises
• The area benefits from new infrastructure, schools, or transport links
• You negotiate a fair price rather than paying full list value
• Local supply becomes limited and demand picks up

Over five to ten years, good-quality new builds in desirable areas tend to perform just as well — or better — than older homes nearby.

Can you negotiate on a new build?

Absolutely. Developers have targets and timelines to hit, and there’s often room to move if you time it right. You’ll have the best chance if you:

• Can move quickly
• Buy near the end of a developer’s financial quarter or year
• Have no chain
• Choose a plot that’s been sitting unsold

If they won’t budge on price, negotiate extras like flooring upgrades, appliances, or a stamp duty contribution. These add real value without changing the recorded sale price — which can also help future valuations.

How falling values affect your mortgage and remortgage

If your property value dips, your loan-to-value (LTV) rises — and that can limit your remortgage options or mean higher rates.

For example, if you bought with a 5% deposit and the property value falls by 5%, your equity is effectively gone. You’ll still own the home, but moving to a new lender could be tricky unless you pay extra off the balance.

If you started with a larger deposit, you’ll have more flexibility and likely stay within a favourable LTV band when your fixed rate ends.

At Strive, we think ahead. We’ll structure your mortgage to keep options open — whether that’s a longer fix, strategic overpayments, or lender choices that suit your long-term goals.

How to avoid negative equity on a new build

Negative equity happens when your mortgage balance is higher than your home’s market value — something new build buyers can be more exposed to in the early years. The good news? With the right approach, you can protect yourself and build equity faster.

Here are a few smart ways to stay ahead:

• Choose a five-year fixed rate – It gives you stability and protects you from short-term market dips, letting your property value settle before you need to remortgage.

• Make regular overpayments – Even small monthly overpayments can make a big difference, helping you reduce your balance and grow equity faster.

• Opt for a shorter mortgage term (if affordable) – Paying your loan off sooner means more of your monthly payment goes towards the capital, not just the interest.

• Put down the largest deposit you comfortably can – The more equity you start with, the less vulnerable you are to price fluctuations — and you’ll usually get access to better rates too.

• Buy in areas with strong fundamentals – Focus on locations with good transport links, employment hubs, and limited new build supply. These factors tend to support steady long-term growth.

By combining these steps, you’ll strengthen your financial position and stay in control — even if property values move around in the short term.

Strive, New Build Mortgage Experts

New builds can dip in value soon after completion — but that’s normal. Over time, quality homes in the right areas tend to recover and appreciate. The key is going in with a clear plan: understanding your mortgage options, deposit size, and the market you’re buying into.

At Strive, we specialise in new build mortgages. We know how lenders view new developments, how to manage off-plan purchases, and how to structure your loan to protect your investment long term.

If you’re thinking about buying new, explore our full new build mortgage guide or get in touch with our team for tailored advice. We’ll help you secure the right deal — and the peace of mind that comes with it.