In a UK new-build purchase, the reservation fee, exchange deposit, warranty and completion date are separate contractual matters. Read the reservation agreement before paying, have an independent conveyancer check the sale contract and warranty documents, and do not assume a “10-year warranty” covers every defect or that an advertised handover date is guaranteed. The exact rights depend on the developer, the home’s registration, the contract and any consumer code that applies.
What you pay, and when
A typical purchase can involve a reservation fee first, a contract deposit at exchange, and the balance of the price at completion. These payments can be credited against one another, but that is not automatic: the reservation agreement and sale contract must say how they are treated.
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| Payment or event | What it means | What to verify |
|---|---|---|
| Reservation fee | Money paid to reserve a particular plot for a stated period while you progress the purchase. | Amount, reservation period, refund conditions, deductions and whether it is credited toward the purchase price. |
| Exchange deposit | The deposit paid when contracts are exchanged and the purchase becomes legally binding. | Amount, payment deadline, who holds it, and protection if the developer becomes insolvent. |
| Completion funds | The remaining purchase money transferred on the completion date. | Mortgage drawdown timing, final statement, transfer arrangements and what happens if completion is delayed. |
Reservation fees are not automatically refundable
GOV.UK guidance says a reservation fee may be refundable only in specified circumstances. The small print should identify the circumstances, the deadline for refund, permitted deductions and what happens if you cannot obtain a mortgage or decide not to proceed. Ask your conveyancer to review the agreement before you pay, rather than relying on a sales-office explanation.
Many developers require exchange and payment of a contract deposit soon after reservation. The agreement should state the exchange deadline; coordinate it with your lender and conveyancer so a mortgage valuation, searches and legal checks can be completed in time. A reservation fee should not be assumed to substitute for the exchange deposit.
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The 14-day cancellation period under the NHQB Code
The New Homes Quality Board (NHQB) Code of Practice, Version 2 (March 2026), defines a 14-day period after the Reservation Agreement is signed in which a customer can end the agreement and receive the reservation fee back in full. This is not a universal statutory rule for every new-build transaction. Confirm that the developer and your purchase fall within the Code before treating the 14 days as your right, and follow the agreement’s required cancellation method.
What exchange changes
Exchange of contracts is the point at which you and the seller make a legally binding commitment. GOV.UK conveyancing guidance says the completion date is confirmed at exchange. If you withdraw afterward without a contractual right, you may face loss of the deposit and other legal consequences.
How long between exchange and completion?
For ordinary transactions, GOV.UK gives an indicative interval of around two to four weeks between exchange and completion, although exchange and completion can occur on the same day. That estimate is not a promise for a new home, particularly one still being built. The contract may set a fixed date, permit completion after a notice that the property is ready, or use another mechanism.
Questions to put to your conveyancer before exchange
- Is completion on a fixed calendar date, or can the developer serve a notice requiring completion?
- What event makes the home “ready”—for example, practical completion, building-control sign-off or issue of a warranty cover note?
- How much notice must be given, and by what delivery method?
- Is there a long-stop date after which you can terminate or claim another remedy?
- What happens to your deposit, mortgage offer and temporary accommodation costs if the date moves?
There is no single long-stop period or notice period that applies across all developers. The signed contract controls, so obtain a plain-English explanation of those clauses before becoming bound.
Protecting your deposit if the developer fails
NHBC Buildmark is one example of a new-home warranty and insurance arrangement; it is not universal. Its pre-completion cover can apply after exchange to specified risks, including builder insolvency, subject to policy requirements, exclusions and financial limits. NHBC says the policy may repay a lost deposit or instead pay a reasonable additional amount toward completing construction. It does not mean every amount you have paid is automatically protected.
Check whether the home and vendor qualify
NHBC purchaser-solicitor guidance warns that if the vendor is not registered, NHBC protection may not cover the deposit and other contract payments when the vendor becomes insolvent between exchange and completion. Before exchange, ask your conveyancer to verify:
- the legal identity of the developer and whether it is registered with the named warranty provider;
- that the particular plot is registered or otherwise eligible;
- the policy number, cover note status and documents that will form part of the contract;
- the maximum amount and types of pre-completion protection;
- any conditions you must meet to preserve cover.
Keep evidence of every payment and confirmation of where the money is held. If the developer proposes a different warranty or insurance provider, obtain that provider’s terms rather than assuming NHBC rules apply.
What a “10-year warranty” actually covers
A ten-year label describes the potential duration of a scheme, not a promise that every defect reported during ten years will be repaired. Under NHBC’s stated Buildmark structure, the stages are:
| Period | Type of cover | Practical meaning |
|---|---|---|
| After exchange, before completion | Pre-completion insolvency cover | Specified protection if the builder fails before completion, subject to eligibility, limits and policy conditions. |
| Years 0–2 from legal completion | Builder warranty period | The builder is responsible for covered defects under the warranty’s standards and exclusions. Follow the policy’s reporting process. |
| Years 3–10 from legal completion | Insurance cover for defined issues | Claims are limited to the defects, damage, thresholds and financial limits set out in the policy; ordinary wear, maintenance and exclusions remain outside cover. |
The exact duration, definitions, excesses, claim deadlines and exclusions vary by provider and policy edition. Ask for the full policy and any technical standards, not just a brochure saying “10 years.”
Do not complete before the cover note is issued
NHBC guidance says a cover note is issued only when it is satisfied that construction substantially complies with its Technical Requirements. Its purchaser-solicitor guidance advises against completing or moving in before an NHBC cover note has been issued. Your conveyancer should confirm whether the contract makes the document a completion requirement and what remedy exists if it is outstanding.
Getting the keys when the home is unfinished
Off-plan contracts commonly separate the date you sign from the date the home is ready. The sales estimate is not the same as a contractual completion date. Your conveyancer should identify the operative trigger and explain the notice procedure.
Fixed-date completion
A fixed date appears in the contract and is binding unless the parties agree a variation or another contractual clause applies. Confirm how bank holidays, weekends and late mortgage funds are handled, and whether the developer can extend the date for specified reasons.
Notice-based completion
Some contracts allow the developer to serve notice once construction reaches the required stage. Check the minimum notice period, the acceptable form of notice and whether you can inspect before the notice expires. Make sure your lender can release funds within that window; a mortgage offer expiring before notice is a buyer risk that needs early management.
Long-stop protection
A long-stop date is the final contractual deadline for completion. The contract may give you a right to terminate, recover the deposit or claim another remedy if it is missed. No standard long-stop period applies to every developer, so record the date in your own diary and ask what notice you must give to exercise any right.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Independent inspection and snagging
The NHQB Statement of Principles says: “Make sure that customers know they should appoint independent legal advisers when buying a new home and that they have the right to ask for an independent pre-completion inspection.” An inspection is a practical opportunity to identify incomplete work, damage and faults before you become responsible for the home.
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- Ask the developer, in writing, when access will be available and whether an independent inspector may attend.
- Instruct an appropriately qualified independent inspector; a printed checklist can help you prepare but is not a substitute for professional inspection or legal advice.
- Request a report that identifies each item, its location, severity and recommended action.
- Send the report to the developer and conveyancer before completion, asking which items will be corrected, when and under which warranty or contract provision.
- Reinspect where possible, photograph unresolved items and keep a dated record. Do not sign a variation or completion acknowledgment without understanding its effect.
An inspection does not automatically give you a right to delay completion. Your contract and the applicable consumer code determine how defects and outstanding work are handled.
How to compare two new-build homes
Compare the documents, not just the headline warranty length or estimated handover date.
| Comparison point | Evidence to request |
|---|---|
| Provider and registration | Named warranty provider, developer registration and plot eligibility. |
| Deposit protection | Pre-completion cover, insolvency limits, exclusions and whether the vendor is registered. |
| Post-completion cover | Builder-warranty period, insurance years, defect definitions, thresholds, limits and claim process. |
| Completion method | Fixed date or notice trigger, notice period and conditions for readiness. |
| Long-stop rights | Final date, termination procedure, deposit treatment and any other remedy. |
| Consumer code and inspection | Applicable code, reservation cancellation terms and right to request an independent inspection. |
A buyer’s timeline
- Before reservation: obtain the reservation agreement, refund rules, reservation period and proposed exchange deadline.
- During reservation: appoint an independent conveyancer, arrange the mortgage application and ask which consumer code applies.
- Before exchange: verify the warranty provider, plot registration, cover note requirements, deposit protection and completion mechanism.
- At exchange: confirm the legally binding completion terms, deposit receipt and any long-stop date.
- Before completion: arrange the independent inspection, resolve or record snags, confirm mortgage funds and check that required warranty documents are issued.
- At completion: transfer the balance only through the conveyancer’s verified bank details, collect keys when legal completion occurs and retain every document.
Common mistakes and how to avoid them
- Calling the reservation fee the deposit: use the agreement’s definitions and confirm whether the fee is credited.
- Assuming 14 days always applies: check that the NHQB Version 2 Code covers this developer and transaction.
- Relying on “10 years” alone: read the provider’s stages, exclusions, limits and claim deadlines.
- Using a developer-referred adviser without checking independence: GOV.UK says you are not obliged to use a developer-referred solicitor or mortgage adviser.
- Treating an estimated handover as guaranteed: identify the contractual trigger, notice period and long-stop date.
- Skipping the inspection because the home is new: arrange an independent pre-completion inspection and document outstanding work.
The safest approach is document-led: have an independent conveyancer explain the reservation agreement, sale contract and warranty policy together before you exchange.
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