UK New-Build Reservation Agreements: What You Pay, What You Get and What to Check
When you buy a new-build home in England, you usually sign a reservation agreement and pay a reservation fee before exchanging contracts. The agreement takes the home off the market for a short period while your solicitor and lender complete their checks.
This Banke UK guide explains how reservation works, what to look for in the paperwork, and how to protect yourself as an overseas buyer.
The Short Answer
A reservation agreement is a short contract with the developer. You pay a fee, the developer agrees to stop marketing the plot for a stated period, and you agree to move toward exchange within that time. It is not the sale contract. The legally binding purchase happens when contracts are exchanged.
What a Reservation Agreement Usually Covers
- The plot, the price and any incentives offered.
- The reservation fee and what happens to it on exchange.
- The reservation period, and what happens if it runs out.
- Conditions for a refund, if any.
- Deadlines for instructing a solicitor and providing mortgage and identity documents.
Questions to Ask Before You Pay
- Is the reservation fee refundable, and in which circumstances?
- Does the fee count toward the purchase price or the deposit?
- What happens if the build date moves or the plot changes?
- Can the developer change the price after reservation?
- Are the incentives written into the contract, not just in the sales brochure?
The Steps After Reservation
Appoint a solicitor promptly. They will review the draft contract, the lease if the home is leasehold, the title and the searches. Our guide to full costs of buying UK property from abroad lists the costs beyond the price, and UK Property From Abroad: Proof of Funds and Source of Wealth Checks explains the identity and funds checks that can slow things down if you start late.
Leasehold and Service Charge Points for New-Build Flats
If you are buying a flat, ask about the lease length, ground rent and the expected service charge. See Ground Rent in UK Leasehold Flats and Section 20 consultation on major works.
Completion, Snagging and Warranty
Ask which new-home warranty or protection covers the property and for how long, and plan a snagging inspection before you complete. See Snagging a UK New-Build Home: A Checklist.
Common Mistakes
- Paying a reservation fee before understanding whether it is refundable.
- Relying on verbal promises about incentives.
- Not instructing a solicitor until the deadline is close.
- Ignoring leasehold terms on a new flat.
Why Choose Banke UK?
Banke helps overseas buyers understand the buying process before they commit. To discuss a specific development, contact the Banke UK team.
Conclusion
Reservation is a pause button, not a purchase. Know what the fee covers, get incentives in writing and start your solicitor and funds checks straight away. This is general information, not legal, tax or financial advice. Rules, fees and procedures change, so confirm the current position with the relevant authority or a qualified professional before you commit money. Take advice from an independent UK solicitor.