Buying process

Reservation and exchange
are not the same promise.

Buyers routinely treat reservation as the moment they have bought the property. It is not. The two steps differ in what you pay, what you are bound to, and how easily you can walk away, and the gap between them is where the real work happens.

Side by side

One holds a plot.
The other buys it.

The difference matters most to buyers who are far away and moving fast, because reservation feels decisive and is not, while exchange feels procedural and is the point of no return.

Step one

Reservation

Step two

Exchange of contracts

What it isReservationA short agreement that takes the plot off the market and holds it at the agreed price until a set expiry date.
What it isExchangeThe point at which signed contracts are exchanged between your solicitor and the developer’s.
What you payReservationA reservation deposit. It is not an extra cost: it is credited against your contract deposit at exchange.
What you payExchangeThe contract deposit, commonly around 10% of the price, less the reservation deposit you already paid.
What it commits you toReservationVery little. Until exchange the purchase is expressly subject to contract, so neither side is bound to complete.
What it commits you toExchangeEverything. From exchange the purchase is legally binding and you are committed to completing.
How you get outReservationIn writing, at any time before the expiry date. Reservation agreements typically include a 14-day cooling-off period.
How you get outExchangeYou generally cannot, without losing the deposit and facing a claim. This is the milestone to be sure before, not after.
What it costs to change your mindReservationWithin the cooling-off period, nothing. After it, the developer may deduct stated costs already incurred, such as an administration contribution and legal fees.
What it costs to change your mindExchangeThe contract deposit is at risk, and the developer may pursue you for its losses. Your solicitor will explain the exact position.
Typical timingReservationDay one. The expiry date is usually three to four weeks later, and that is your deadline to exchange.
Typical timingExchangeAt the end of that window, once your solicitor is satisfied and any mortgage offer is in place.
The window between

What those weeks
are actually for.

The reservation expiry date is a deadline to exchange, not a countdown to nothing. Five things have to happen inside it, and they run in parallel rather than in sequence.

Your solicitor reviews the contract and the leaseLease length, service charge, ground rent, estate charge, and what the developer may still change. This is the work the reservation window exists for.
AML and source of fundsIdentity checks and documented evidence of where the money comes from. Preparing this in advance is the single biggest cause of a missed exchange deadline when it is left late.
Searches and enquiriesLocal authority and other searches, plus your solicitor’s written enquiries to the developer’s solicitor.
Mortgage offer, if you are borrowingThe lender’s valuation and formal offer. Timing here is outside everyone’s control, which is why brokers are usually engaged before reservation, not after.
The decision itselfYou are paying for a few weeks of certainty on price and plot. Use them. If the answers do not satisfy you, cancelling in the window is a normal outcome, not a failure.
Cancelling a reservation

Reserving is not
a point of no return.

This is the part buyers most often get wrong in both directions: some treat reservation as binding when it is not, and others assume the money is unconditionally refundable when it is not quite that either.

You can cancel in writing at any time before the reservation expires. The agreement says how and to whom; a phone call is not enough.
Reservation agreements typically include a cooling-off period of around 14 days, in which the deposit is returned in full without deduction.
After that period, the deposit is normally still returned, less costs the developer has already incurred and has set out in advance, such as an administration contribution and legal fees. In practice this is a share of the deposit, not the whole of it.
If the developer notifies you of a major change to what you reserved, you generally have a fresh right to cancel with the deposit returned in full.
None of this survives exchange. After exchange you are committed, and the deposit at risk is the contract deposit, not the reservation deposit.

These are the patterns set by the industry code that most UK new-build developers are registered with, and they are what we see in the reservation agreements we read for clients. They are not identical everywhere: the deduction list and the amounts are set by your own reservation agreement, and that document, not this page, is what governs your purchase. Read it before you pay, and ask us or your solicitor about anything in it you do not recognise.

Take it further
What a purchase really costs → The full buying process → Leasehold explained → Who does what → Buying off-plan →
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Before you reserve,
not after.

The useful conversation happens while you still have every option open. Tell us what you are looking at and we will tell you what to check first.

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