The short answer
Tell your lender, broker, conveyancer and valuer about every developer incentive. Permanent upgrades such as flooring or fitted appliances are different from cash contributions, paid legal fees or cashback. A lender bases its mortgage on an acceptable valuation and its criteria—not simply the headline price or the package advertised by the developer.
What counts as an incentive?
Examples include a deposit contribution, stamp-duty contribution, cashback, legal or mortgage fees, part exchange, guaranteed rent, upgraded kitchens, flooring or appliances. RICS distinguishes permanent enhancements to the home from monetary contributions that do not themselves add value to the property.
Why incentives must be disclosed
Valuers analyse the underlying property value and adjust comparable evidence for incentives where appropriate. The lender also needs the full transaction to apply its maximum incentive and loan-to-value rules. Concealing an incentive risks delaying or undermining the mortgage and legal work.
What is a valuation gap?
A valuation gap appears when the lender's valuation is below the agreed purchase price. The lender may calculate its maximum loan from the lower valuation, leaving the buyer to renegotiate, provide more cash, choose another property or—if suitable advice supports it—try another lender. A second valuation is not guaranteed to reach a different answer.
Worked example
A buyer agrees £300,000 with a £15,000 developer contribution and expects a 90% mortgage. If the lender values the home at £285,000 and will lend 90% of that figure, the indicative maximum is £256,500. That is £13,500 less than a £270,000 mortgage based on the price. The precise cash gap depends on how the lender treats the incentive and deposit, so obtain the lender's calculation before exchanging contracts.
Compare the whole package
Ask for the price and every incentive in writing. Compare that net package with recent new-build and resale evidence, and consider which extras remain with the home. Also budget for reservation fees, service or estate charges, lease terms, optional upgrades and the cost of independent legal advice and inspection.
Reservation, exchange and completion dates
New-build reservations often set a short exchange deadline. Do not let a sales deadline replace mortgage, legal and survey checks. If the home is unfinished, ask your conveyancer about the long-stop date and what happens if completion moves beyond the mortgage offer's validity.
Snagging and warranties
A lender valuation is not a condition survey. Consider an independent snagging inspection and understand the warranty provider, cover, exclusions and defect-reporting process. Record promised remedial work and completion dates in writing.
Questions to ask before reserving
- What is the price without incentives, and what exactly is included?
- Has every incentive been disclosed on the relevant form?
- Is the reservation fee refundable, and in which circumstances?
- What estate, service, management or leasehold charges apply?
- What is the exchange deadline and contractual long-stop date?
- Can you use your own solicitor, broker, surveyor and snagging inspector?
Sources and limitations
The government's How to Buy guide covers new-build reservation fees, exchange deadlines, completion delays, estate charges and snagging. RICS's professional standard on valuing individual new-build homes explains the treatment of incentives. GOV.UK confirms that a mortgage provider carries out its own valuation. Criteria and contracts differ, so obtain advice on the actual transaction. Send corrections to hello@propertiesandhomes.co.uk.
Reviewed by the Properties & Homes editorial team
Published and last reviewed: 14 August 2026.
Change log: first edition.