Buying a new-build property is often seen as the stress-free route into ownership or investment. After all, what could go wrong with a brand-new home that’s just been completed? In reality, lenders, valuers, and buyers know that new-builds carry their own risks. From warranty requirements to snagging lists that run into dozens of items, these issues can make or break mortgage approvals.
In 2025, tighter lender scrutiny and ongoing reforms in building safety mean developers and buyers must take warranty cover and snagging more seriously than ever. For investors and developers, failing to get this right risks slowing down sales or stalling refinancing strategies. For buyers, it can mean delays in securing the mortgage needed to complete.
Why Warranties Matter for Lenders
Lenders are not just financing bricks and mortar—they are financing security. If a building suffers structural issues or defects shortly after completion, lenders want assurance that the property won’t collapse in value. That’s why warranty providers such as NHBC, LABC, and Premier Guarantee have become central to the mortgage process.
In 2025, most mainstream lenders require a recognised, lender-approved warranty before releasing funds on a new-build purchase. Without it, many buyers find their applications rejected, no matter how strong their personal profile may be.
This has become even more critical since widespread concerns around cladding and fire safety emerged in recent years. As we noted in
Financing Property with Cladding in 2025, lenders are wary of risks that could render a property un-mortgageable. A robust warranty reassures them that any defects will be addressed without leaving the borrower—or the lender—exposed.
Approved vs. Non-Approved Warranties
Not all warranties are equal. Some smaller developers opt for cheaper, lesser-known providers to cut costs. Buyers then discover that their lender does not recognise the warranty, leaving them scrambling to find another lender or facing delays at completion.
Mainstream banks generally maintain a strict panel of approved warranty providers. If the cover in place does not appear on that list, mortgage offers can be withdrawn. Even specialist or private banks—often more flexible—will want to see evidence that the warranty is credible and comprehensive.
Snagging: The Silent Deal-Breaker
Even with an approved warranty, snagging can derail the mortgage process. Snagging refers to the list of defects and issues identified after a new-build is completed, from cosmetic problems like poor paintwork to serious issues such as leaks, faulty wiring, or structural cracks.
Valuers appointed by lenders are increasingly vigilant. If they see evidence of incomplete works or unresolved snags, they may down-value the property or insert conditions into their report. This can delay completion or even force renegotiations.
In some cases, extensive snagging can create “practical completion” disputes, where lenders question whether the property is truly finished. Without sign-off, funding may be withheld.
Developers: Protecting Saleability
For developers, ensuring warranty compliance and snagging management is critical for sales momentum. In competitive markets, buyers are quick to walk away if mortgage issues arise. A block of flats in Birmingham, for example, may attract strong demand—but if half of the units face delays due to warranty disputes or snagging hold-ups, sales velocity slows and the development risks being labelled “problematic.”
This directly impacts refinancing as well. Developers seeking
development exit finance rely on steady sales to repay lenders. If snagging drags on or warranties aren’t accepted, the exit strategy falters.
Investors: Protecting Value
For investors, snagging and warranty issues aren’t just inconvenient—they affect long-term value. A property with a recognised warranty is easier to refinance, insure, and sell on. Without it, the pool of lenders and buyers shrinks dramatically.
Portfolio landlords investing in multiple new-build units also need to consider how snagging risk affects yield. Delays in letting due to incomplete snagging or disputes with developers can leave properties empty, undermining the ICR tests we examined in
Debt Service Cover & Stress Testing in 2025.
Real-World Example
Willow recently worked with a client purchasing a new-build penthouse in Leeds. Although the developer had secured a warranty, it was not on the buyer’s lender’s approved list. By intervening early, we identified lenders who accepted the warranty and ensured completion remained on track.
In another case, a buy-to-let investor in Manchester faced delays due to a 40-item snagging list. The lender’s valuer refused to release full funding until key issues were resolved. By liaising with both the developer and the lender, we secured a partial release of funds to keep the transaction alive, while ensuring the snagging works were completed within a fixed timeframe.
Strategic Outlook
In 2025, new-build warranty and snagging risks are no longer side issues—they are central to whether mortgages get approved. Lenders will not compromise on structural security, and valuers are under pressure to highlight any issues that could expose them to liability.
For developers, this means investing in robust warranty cover and professional snagging management from day one. For buyers and investors, it means checking warranty approval and assessing snagging reports before committing to purchase.
How Willow Can Help
At Willow Private Finance, we specialise in navigating the complexities of new-build purchases and refinances. We know which lenders accept which warranties, how to structure cases where snagging is delaying valuations, and when to escalate to private banks for bespoke solutions.
Whether you are a buyer securing your first apartment, a landlord acquiring multiple units, or a developer looking to keep sales flowing, we ensure warranty and snagging risks are addressed before they become deal-breakers.
📞 Want Help Navigating Today’s Market?
If you are buying or refinancing a new-build in 2025, don’t let warranty or snagging issues derail your plans.

