Broker warns of rising build costs and advises customers to lock in deals before inflation takes hold
Buyers of new build homes should secure mortgage deals and reservations without delay, ahead of potential price rises driven by raw material costs stemming from the Middle East conflict.
That is the advice of new build mortgage specialist The Mortgage Brain, which reports that its loan volumes have held steady relative to the first quarter of 2025, suggesting demand has remained broadly resilient despite elevated rates.
Expectations of gradual rate reductions through 2026 have been upended by the Middle East conflict, with rising oil prices and disruption to the Strait of Hormuz — a route for roughly 20% of global oil and gas flows — pushing inflation risks higher. UK construction input cost inflation accelerated sharply in March 2026, with companies directly attributing higher energy and raw material prices to the outbreak of war, while residential housing activity fell further to a sub-index reading of 38.2.
"Buyers should proceed if they are in a position to buy, as there's no guarantee what mortgage rates will be, this time next year," said Enzo Mora (pictured right), chief executive and founder of The Mortgage Brain.
"Higher inflation later this year due to the conflict in Iran is likely to cause higher build costs. There is good appetite from lenders for new build homes due to their energy efficiencies.
"Lenders such as Halifax and HSBC offer different financial incentives to encourage customers to buy properties with a high energy rating which is another good reason for customers to buy new build."
In 2025, new build completions in England fell to their lowest level since 2015, at 202,800 homes — 18% below 2019 and nearly 100,000 short of the annual total required to meet government targets. The share of new homes sold off-plan has also fallen by around a third over the past decade, while housebuilders incurred an estimated £264.5 million in additional financing costs in 2025 compared with 10 years earlier.
Several lenders have moved to improve access. Nationwide raised its maximum LTV to 95% for new builds and extended its mortgage offer period from six to nine months. Santander revised its new build affordability criteria in a move that could allow customers to borrow more. The Rezide Equity Loan, launched in October 2025, enables buyers to purchase with a 5% deposit, with a loan covering 15% of the property value available alongside a mortgage from Barclays or TSB.
Demand fundamentals remain supportive. Research by Skipton Building Society found that 44% of aspiring first-time buyers would prefer a new build, against 30% who would consider an older property.
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