Published 2026-07-10 · Updated 2026-09-13 · New Build Mortgage Guide · Written and reviewed by Phillip Wakeling-Smith (CeMAP)
Builder deposit contributions: can the developer pay your deposit?
Quick answer: Yes — most lenders will accept a deposit contribution from the builder, typically capped at around 5% of the purchase price. Usually it has to sit alongside some deposit of your own. But one lender's criteria go further: with Perenna, a 5% builder gift can be the entire deposit on a new-build house, meaning a qualifying buyer puts down nothing themselves.
From our sister site Mortgage Affordability. Open the check in a new tab.
What a deposit paid by the developer actually is
When a developer wants to move stock, it can offer incentives: paid legal fees, upgraded kitchens, stamp duty contributions — or cash towards your deposit. A deposit contribution is the most valuable of these, because it directly reduces the money you need on completion day.
It is not a discount on the price. The property still completes at the full price; the builder's money simply forms part of the deposit funds at exchange.
The rules every lender applies
- The ~5% cap. Lenders generally limit builder incentives to about 5% of the price or valuation. Contributions above the cap usually get deducted from the purchase price for lending purposes instead — which shrinks your mortgage rather than your deposit.
- Full disclosure is mandatory. Every incentive must be declared on the UK Finance Disclosure of Incentives Form, which the builder completes and the valuer and lender see. Undeclared incentives are treated as mortgage fraud — there is no informal version of this arrangement.
- The valuation rules the numbers. Contributions are measured against the lower of price and valuation. If the valuer marks the property down, the sums are redone from the lower figure.
Which lenders accept a deposit paid by the developer
Of the 17 lenders whose new-build criteria we track, 16 accept a builder deposit contribution, and the other, Halifax, refers it case by case. Accepting isn't the same as ignoring it, though: Skipton, for example, accepts a builder incentive but cuts its maximum LTV by five points (95% to 90%) once incentives go over 2% of the price. (Positions as last verified against each lender's published criteria, August–September 2026.) Whether the gift can be your whole deposit is a separate question: most acceptors still want to see some of your own money in the purchase.
Here is the current position, lender by lender, computed live from the same verified criteria that power our incentive calculator — first with the contribution inside the standard 5%-of-price cap, then above it:
| Lender | Deposit contribution at 5% of price | At 7% of price |
|---|---|---|
| NatWest | Accepted — 95% LTV | Accepted, deducted from value |
| Accord | Accepted — 95% LTV | Accepted, deducted from value |
| Perenna | Accepted — 95% LTV | Declined |
| Barclays | Accepted — 90% LTV | Accepted, deducted from value |
| HSBC | Accepted — 90% LTV | Accepted, deducted from value |
| Virgin Money | Accepted — 90% LTV | Accepted, deducted from value |
| Halifax | Accepted, LTV capped at 95% | Accepted, LTV capped at 95% |
| Nationwide | Accepted, LTV capped at 90% | Declined |
| Santander | Accepted, LTV capped at 90% | Declined |
| Skipton | Accepted, LTV capped at 90% | Declined |
Computed from verified lender criteria (2026-08-19) for a £300,000 new-build house with a cash deposit contribution as the only incentive. Other incentives in the package change the outcome — model your full package in the incentive calculator.
Two patterns stand out. Inside 5%, most of the panel accepts the contribution with at most an LTV adjustment. Cross 5% and the panel splits: several lenders decline the whole application rather than trimming the numbers, which is why a generous-looking contribution can shrink your lender choice rather than help it. Our lender criteria tables show the full new-build position for each lender we track, with the date each was verified.
One caveat on the table. It applies each lender's general incentive rules to a cash contribution. Halifax refers a builder-gifted deposit case by case rather than applying a fixed rule, so for Halifax check the position before relying on the figure shown.
The zero-deposit combination
Perenna's criteria allow a builder incentive of up to 5% to be used "as part or all of the deposit, including where no borrower-funded deposit is provided, subject to criteria" — and its 95% loan-to-value range covers new-build houses (flats are capped at 80%). Put those together on a house where the builder offers 5%:
- Builder's contribution: 5%
- Perenna mortgage: 95%
- Your deposit: £0
You still pay legal fees, moving costs and any stamp duty. Affordability still has to work — Perenna's long-term fixed-rate model helps here, because there's no stress-rate uplift on top of the pay rate — and the product is a decades-long fix, which suits some buyers and not others.
One more thing worth knowing: Perenna applies this to foreign nationals on Tier 1 or Tier 2 visas too (Tier 2 is now the Skilled Worker route; £50k+ main-applicant income, 18 months in the UK, 12+ months left on the visa). If that's you — or your buyers — our sister site covers the visa angle in detail: Visa Mortgage Guide.
Before you rely on a builder's contribution
- Get it in writing early — the contribution belongs in the reservation paperwork, not a sales-office conversation.
- Ask how it's structured — deposit contribution, price reduction and paid extras are treated differently by lenders.
- Model a down-valuation — if the valuer comes in 3% light, does your purchase still work? See our guide to new-build down-valuations.
- Check your lender's position first — a contribution your lender won't accept is worth nothing. The criteria tables are the place to start.
FAQ
Can the developer pay my deposit?
Partly, in most cases — and occasionally in full. Most lenders accept a builder deposit contribution of up to around 5% of the purchase price, but want to see some of your own money alongside it. Perenna's criteria are the exception we track: on a new-build house at 95% LTV, a 5% builder gift can be the entire deposit, with no borrower-funded deposit at all.
Is a deposit paid by the developer treated as a gifted deposit?
Lenders treat it as a builder incentive rather than a family gift — it has its own rules (the ~5% cap, mandatory disclosure on the UK Finance Disclosure of Incentives Form, and measurement against the lower of price and valuation). It's not a gift letter from a relative and it's not a price discount.
Does a developer-paid deposit reduce the purchase price?
No. The property completes at the full price; the builder's contribution simply forms part of the deposit funds. Where a contribution exceeds a lender's cap, the excess is usually deducted from the price for lending purposes, which reduces your mortgage rather than your deposit.
Which lenders refuse builder deposit contributions?
None of the 17 lenders whose new-build criteria we track refuses one outright. Halifax refers them case by case, and the other 16 accept them — usually capped at around 5% of the price, often with some of your own deposit still required, and sometimes with a lower maximum LTV (Skipton, for instance, drops from 95% to 90% once incentives exceed 2% of the price). Check the current position for each lender in our lender criteria tables before you rely on a contribution.
Can I combine a builder deposit contribution with my own savings and a family gift?
Usually yes — the builder's contribution counts towards the deposit alongside your own funds, and most lenders accept family gifts as well, each under its own rules. Declare every source: the incentive on the disclosure form and the family gift with the lender's standard gift confirmation.
Criteria positions verified July 2026 and change frequently — always confirm the current policy with the lender or a whole-of-market broker. This article is information, not financial advice.