diff --git a/packages/builder/src/pages/builder/app/[application]/design/[screenId]/[componentId]/new/_components/NewComponentPanel.svelte b/packages/builder/src/pages/builder/app/[application]/design/[screenId]/[componentId]/new/_components/NewComponentPanel.svelte
index 784642787b..c76b03be36 100644
--- a/packages/builder/src/pages/builder/app/[application]/design/[screenId]/[componentId]/new/_components/NewComponentPanel.svelte
+++ b/packages/builder/src/pages/builder/app/[application]/design/[screenId]/[componentId]/new/_components/NewComponentPanel.svelte
@@ -223,11 +223,13 @@
   })
 
   const onDragStart = (e, component) => {
+    console.log("DRAG START")
     e.dataTransfer.setDragImage(ghost, 0, 0)
     previewStore.startDrag(component)
   }
 
   const onDragEnd = () => {
+    console.log("DRAG END")
     previewStore.stopDrag()
   }
 </script>
@@ -314,7 +316,6 @@
   }
   .component:hover {
     background: var(--spectrum-global-color-gray-300);
-    cursor: grab;
   }
   .component :global(.spectrum-Body) {
     line-height: 1.2 !important;
diff --git a/packages/builder/src/pages/builder/app/[application]/design/[screenId]/_components/AppPreview.svelte b/packages/builder/src/pages/builder/app/[application]/design/[screenId]/_components/AppPreview.svelte
index 3951c0e902..39e0835fa8 100644
--- a/packages/builder/src/pages/builder/app/[application]/design/[screenId]/_components/AppPreview.svelte
+++ b/packages/builder/src/pages/builder/app/[application]/design/[screenId]/_components/AppPreview.svelte
@@ -199,8 +199,8 @@
     } else if (type === "reload-plugin") {
       await componentStore.refreshDefinitions()
     } else if (type === "drop-new-component") {
-      const { component, parent, index } = data
-      await componentStore.create(component, null, parent, index)
+      const { component, parent, index, props } = data
+      await componentStore.create(component, props, parent, index)
     } else if (type === "add-parent-component") {
       const { componentId, parentType } = data
       await componentStore.addParent(componentId, parentType)
diff --git a/packages/builder/src/stores/builder/preview.ts b/packages/builder/src/stores/builder/preview.ts
index 9aeaf99346..a382eeefb0 100644
--- a/packages/builder/src/stores/builder/preview.ts
+++ b/packages/builder/src/stores/builder/preview.ts
@@ -1,7 +1,5 @@
 import { get } from "svelte/store"
 import { BudiStore } from "../BudiStore"
-import { componentStore } from "./components"
-import { selectedScreen } from "./screens"
 
 type PreviewDevice = "desktop" | "tablet" | "mobile"
 type PreviewEventHandler = (name: string, payload?: any) => void
@@ -56,21 +54,10 @@ export class PreviewStore extends BudiStore<PreviewState> {
     }))
   }
 
-  async startDrag(componentType: string) {
-    let componentId
-    const gridScreen = get(selectedScreen)?.props?.layout === "grid"
-    if (gridScreen) {
-      const component = await componentStore.create(componentType, {
-        _placeholder: true,
-        _styles: { normal: { opacity: 0 } },
-      })
-      componentId = component?._id
-    }
+  async startDrag(component: string) {
     this.sendEvent("dragging-new-component", {
       dragging: true,
-      componentType,
-      componentId,
-      gridScreen,
+      component,
     })
   }
 
diff --git a/packages/client/src/components/preview/DNDHandler.svelte b/packages/client/src/components/preview/DNDHandler.svelte
index bdd538748b..11bed5a1b7 100644
--- a/packages/client/src/components/preview/DNDHandler.svelte
+++ b/packages/client/src/components/preview/DNDHandler.svelte
@@ -8,12 +8,14 @@
     dndStore,
     dndParent,
     dndIsDragging,
+    isGridScreen,
+    dndInitialised,
   } from "stores"
   import DNDPlaceholderOverlay from "./DNDPlaceholderOverlay.svelte"
   import { Utils } from "@budibase/frontend-core"
-  import { findComponentById } from "utils/components.js"
-  import { DNDPlaceholderID } from "constants"
-  import { isGridEvent } from "utils/grid"
+  import { findComponentById } from "@/utils/components.js"
+  import { isGridEvent } from "@/utils/grid"
+  import { DNDPlaceholderID } from "@/constants"
 
   const ThrottleRate = 130
 
@@ -219,9 +221,9 @@
     processEvent(e.clientX, e.clientY)
   }
 
-  // Callback when on top of a component.
+  // Callback when on top of a component
   const onDragOver = e => {
-    if (!source || !target) {
+    if (!source || !target || $isGridScreen) {
       return
     }
     handleEvent(e)
@@ -233,6 +235,14 @@
       return
     }
 
+    // Mark as initialised if this is our first valid drag enter event
+    if (!$dndInitialised) {
+      dndStore.actions.markInitialised()
+    }
+    if ($isGridScreen) {
+      return
+    }
+
     // Find the next valid component to consider dropping over, ignoring nested
     // block components
     const component = e.target?.closest?.(
@@ -262,7 +272,8 @@
       builderStore.actions.dropNewComponent(
         source.newComponentType,
         drop.parent,
-        drop.index
+        drop.index,
+        $dndStore.meta.newComponentProps
       )
       dropping = false
       stopDragging()
diff --git a/packages/client/src/components/preview/DNDPlaceholderOverlay.svelte b/packages/client/src/components/preview/DNDPlaceholderOverlay.svelte
index 61cecc885b..50b76c6208 100644
--- a/packages/client/src/components/preview/DNDPlaceholderOverlay.svelte
+++ b/packages/client/src/components/preview/DNDPlaceholderOverlay.svelte
@@ -1,38 +1,56 @@
 <script>
   import { onMount } from "svelte"
-  import { DNDPlaceholderID } from "constants"
   import { Utils } from "@budibase/frontend-core"
+  import { dndInitialised } from "@/stores"
+  import { DNDPlaceholderID } from "@/constants"
 
   let left, top, height, width
+  let observing = false
+
+  // Observe style changes in the placeholder DOM node and use this to trigger
+  // a redraw of our overlay (grid screens)
+  const observer = new MutationObserver(mutations => {
+    if (mutations.some(mutation => mutation.attributeName === "style")) {
+      debouncedUpdate()
+    }
+  })
 
   const updatePosition = () => {
-    let node = document.getElementsByClassName(DNDPlaceholderID)[0]
-    const insideGrid = node?.dataset.insideGrid === "true"
+    const wrapperNode = document.getElementsByClassName(DNDPlaceholderID)[0]
+    let domNode = wrapperNode
+    const insideGrid = wrapperNode?.dataset.insideGrid === "true"
     if (!insideGrid) {
-      node = document.getElementsByClassName(`${DNDPlaceholderID}-dom`)[0]
+      domNode = document.getElementsByClassName(`${DNDPlaceholderID}-dom`)[0]
     }
-    if (!node) {
+    if (!domNode) {
       height = 0
       width = 0
     } else {
-      const bounds = node.getBoundingClientRect()
+      const bounds = domNode.getBoundingClientRect()
       left = bounds.left
       top = bounds.top
       height = bounds.height
       width = bounds.width
     }
+
+    // Initialise observer if not already done
+    if (!observing && wrapperNode) {
+      observing = true
+      observer.observe(wrapperNode, { attributes: true })
+    }
   }
   const debouncedUpdate = Utils.domDebounce(updatePosition)
 
   onMount(() => {
     const interval = setInterval(debouncedUpdate, 100)
     return () => {
+      observer.disconnect()
       clearInterval(interval)
     }
   })
 </script>
 
-{#if left != null && top != null && width && height}
+{#if left != null && top != null && width && height && $dndInitialised}
   <div
     class="overlay"
     style="left: {left}px; top: {top}px; width: {width}px; height: {height}px;"
@@ -45,7 +63,6 @@
     z-index: 800;
     background: hsl(160, 64%, 90%);
     border-radius: 4px;
-    transition: all 130ms ease-out;
     border: 2px solid var(--spectrum-global-color-static-green-500);
   }
 </style>
diff --git a/packages/client/src/components/preview/GridDNDHandler.svelte b/packages/client/src/components/preview/GridDNDHandler.svelte
index f173dfd960..3d50bfded9 100644
--- a/packages/client/src/components/preview/GridDNDHandler.svelte
+++ b/packages/client/src/components/preview/GridDNDHandler.svelte
@@ -1,15 +1,22 @@
 <script>
   import { onMount, onDestroy, getContext } from "svelte"
-  import { builderStore, componentStore } from "stores"
+  import {
+    builderStore,
+    componentStore,
+    dndIsDragging,
+    dndIsNewComponent,
+    dndStore,
+    isGridScreen,
+  } from "stores"
   import { Utils, memo } from "@budibase/frontend-core"
-  import { GridRowHeight } from "constants"
+  import { DNDPlaceholderID, GridRowHeight } from "@/constants"
   import {
     isGridEvent,
     GridParams,
     getGridVar,
     Devices,
     GridDragModes,
-  } from "utils/grid"
+  } from "@/utils/grid"
 
   const context = getContext("context")
 
@@ -37,6 +44,21 @@
   $: instance = componentStore.actions.getComponentInstance(id)
   $: $instance?.setEphemeralStyles($styles)
 
+  // Keep DND store up to date with grid styles if dragging a new component
+  // on to a grid screen
+  $: {
+    if ($dndIsNewComponent) {
+      dndStore.actions.updateNewComponentProps({
+        _styles: {
+          normal: $styles,
+        },
+      })
+    }
+  }
+
+  // Reset when not dragging new components
+  $: !$dndIsDragging && stopDragging()
+
   // Sugar for a combination of both min and max
   const minMax = (value, min, max) => Math.min(max, Math.max(min, value))
 
@@ -98,6 +120,47 @@
     processEvent(e.clientX, e.clientY)
   }
 
+  const startDraggingPlaceholder = () => {
+    console.log("START PLACEHOLDER")
+    const mode = GridDragModes.Move
+    const id = DNDPlaceholderID
+
+    // Find grid parent and read from DOM
+    const domComponent = document.getElementsByClassName(id)[0]
+    const domGrid = domComponent?.closest(".grid")
+    if (!domGrid) {
+      return
+    }
+    const styles = getComputedStyle(domComponent)
+    const bounds = domComponent.getBoundingClientRect()
+
+    // Show as active
+    domComponent.classList.add("dragging")
+    domGrid.classList.add("highlight")
+    builderStore.actions.selectComponent(id)
+
+    // Update state
+    dragInfo = {
+      domComponent,
+      domGrid,
+      id,
+      gridId: domGrid.parentNode.dataset.id,
+      mode,
+      grid: {
+        startX: bounds.left + bounds.width / 2,
+        startY: bounds.top + bounds.height / 2,
+        rowStart: parseInt(styles["grid-row-start"]),
+        rowEnd: parseInt(styles["grid-row-end"]),
+        colStart: parseInt(styles["grid-column-start"]),
+        colEnd: parseInt(styles["grid-column-end"]),
+      },
+    }
+
+    // Add event handler to clear all drag state when dragging ends
+    console.log("add up listener")
+    document.addEventListener("mouseup", stopDragging)
+  }
+
   // Callback when initially starting a drag on a draggable component
   const onDragStart = e => {
     if (!isGridEvent(e)) {
@@ -158,11 +221,15 @@
     }
 
     // Add event handler to clear all drag state when dragging ends
-    dragInfo.domTarget.addEventListener("dragend", stopDragging)
+    dragInfo.domTarget.addEventListener("dragend", stopDragging, false)
   }
 
   const onDragOver = e => {
     if (!dragInfo) {
+      // Check if we're dragging a new component
+      if ($dndIsDragging && $dndIsNewComponent && $isGridScreen) {
+        startDraggingPlaceholder()
+      }
       return
     }
     handleEvent(e)
@@ -178,7 +245,7 @@
     // Reset DOM
     domComponent.classList.remove("dragging")
     domGrid.classList.remove("highlight")
-    domTarget.removeEventListener("dragend", stopDragging)
+    domTarget?.removeEventListener("dragend", stopDragging)
 
     // Save changes
     if ($styles) {
@@ -198,5 +265,6 @@
   onDestroy(() => {
     document.removeEventListener("dragstart", onDragStart, false)
     document.removeEventListener("dragover", onDragOver, false)
+    document.removeEventListener("mouseup", stopDragging, false)
   })
 </script>
diff --git a/packages/client/src/index.ts b/packages/client/src/index.ts
index e7d454e2f1..7d6b100dc6 100644
--- a/packages/client/src/index.ts
+++ b/packages/client/src/index.ts
@@ -36,6 +36,8 @@ import * as internal from "svelte/internal"
 window.svelte_internal = internal
 window.svelte = svelte
 
+console.log("NEW CLIENT")
+
 // Initialise spectrum icons
 // eslint-disable-next-line local-rules/no-budibase-imports
 import loadSpectrumIcons from "@budibase/bbui/spectrum-icons-vite.js"
@@ -161,14 +163,13 @@ const loadBudibase = async () => {
       const block = blockStore.actions.getBlock(data)
       block?.eject()
     } else if (type === "dragging-new-component") {
-      const { dragging, component, componentId } = data
+      const { dragging, component } = data
       if (dragging) {
         const definition =
           componentStore.actions.getComponentDefinition(component)
         dndStore.actions.startDraggingNewComponent({
           component,
           definition,
-          componentId,
         })
       } else {
         dndStore.actions.reset()
diff --git a/packages/client/src/stores/builder.js b/packages/client/src/stores/builder.js
index 1ae7d3a670..7effd718a0 100644
--- a/packages/client/src/stores/builder.js
+++ b/packages/client/src/stores/builder.js
@@ -77,11 +77,12 @@ const createBuilderStore = () => {
         mode,
       })
     },
-    dropNewComponent: (component, parent, index) => {
+    dropNewComponent: (component, parent, index, props) => {
       eventStore.actions.dispatchEvent("drop-new-component", {
         component,
         parent,
         index,
+        props,
       })
     },
     setEditMode: enabled => {
diff --git a/packages/client/src/stores/dnd.js b/packages/client/src/stores/dnd.js
index 5cfb12c7d2..74987ea7d9 100644
--- a/packages/client/src/stores/dnd.js
+++ b/packages/client/src/stores/dnd.js
@@ -1,5 +1,7 @@
-import { writable } from "svelte/store"
+import { writable, get } from "svelte/store"
 import { derivedMemo } from "@budibase/frontend-core"
+import { screenStore } from "@/stores"
+import { ScreenslotID } from "@/constants"
 
 const createDndStore = () => {
   const initialState = {
@@ -11,6 +13,12 @@ const createDndStore = () => {
 
     // Info about where the component would be dropped
     drop: null,
+
+    // Metadata about the event
+    meta: {
+      initialised: false,
+      newComponentProps: null,
+    },
   }
   const store = writable(initialState)
 
@@ -21,35 +29,53 @@ const createDndStore = () => {
     })
   }
 
-  const startDraggingNewComponent = ({
-    component,
-    definition,
-    componentId,
-  }) => {
+  const startDraggingNewComponent = ({ component, definition }) => {
+    console.log("start", component, definition)
     if (!component) {
       return
     }
 
+    let target, drop
+    const screen = get(screenStore)?.activeScreen
+    const isGridScreen = screen?.props?.layout === "grid"
+    if (isGridScreen) {
+      const id = screen?.props?._id
+      drop = {
+        parent: id,
+        index: screen?.props?._children?.length,
+      }
+      target = {
+        id,
+        parent: ScreenslotID,
+        node: null,
+        empty: false,
+        acceptsChildren: true,
+      }
+    }
+
     // Get size of new component so we can show a properly sized placeholder
     const width = definition?.size?.width || 128
     const height = definition?.size?.height || 64
 
     store.set({
       ...initialState,
+      isGridScreen,
       source: {
         id: null,
         parent: null,
         bounds: { height, width },
         index: null,
         newComponentType: component,
-        newComponentId: componentId,
       },
+      target,
+      drop,
     })
   }
 
   const updateTarget = ({ id, parent, node, empty, acceptsChildren }) => {
     store.update(state => {
       state.target = { id, parent, node, empty, acceptsChildren }
+      console.log("TARGET", state.target)
       return state
     })
   }
@@ -57,6 +83,7 @@ const createDndStore = () => {
   const updateDrop = ({ parent, index }) => {
     store.update(state => {
       state.drop = { parent, index }
+      console.log("DROP", state.drop)
       return state
     })
   }
@@ -65,6 +92,26 @@ const createDndStore = () => {
     store.set(initialState)
   }
 
+  const markInitialised = () => {
+    store.update(state => ({
+      ...state,
+      meta: {
+        ...state.meta,
+        initialised: true,
+      },
+    }))
+  }
+
+  const updateNewComponentProps = newComponentProps => {
+    store.update(state => ({
+      ...state,
+      meta: {
+        ...state.meta,
+        newComponentProps,
+      },
+    }))
+  }
+
   return {
     subscribe: store.subscribe,
     actions: {
@@ -73,6 +120,8 @@ const createDndStore = () => {
       updateTarget,
       updateDrop,
       reset,
+      markInitialised,
+      updateNewComponentProps,
     },
   }
 }
@@ -87,10 +136,7 @@ export const dndParent = derivedMemo(dndStore, x => x.drop?.parent)
 export const dndIndex = derivedMemo(dndStore, x => x.drop?.index)
 export const dndBounds = derivedMemo(dndStore, x => x.source?.bounds)
 export const dndIsDragging = derivedMemo(dndStore, x => !!x.source)
-export const dndNewComponentId = derivedMemo(
-  dndStore,
-  x => x.source?.newComponentId
-)
+export const dndInitialised = derivedMemo(dndStore, x => x.meta.initialised)
 export const dndIsNewComponent = derivedMemo(
   dndStore,
   x => x.source?.newComponentType != null
diff --git a/packages/client/src/stores/index.js b/packages/client/src/stores/index.js
index 268b0cc4bf..b1f0f8955a 100644
--- a/packages/client/src/stores/index.js
+++ b/packages/client/src/stores/index.js
@@ -25,6 +25,7 @@ export {
   dndBounds,
   dndIsNewComponent,
   dndIsDragging,
+  dndInitialised,
 } from "./dnd"
 export { sidePanelStore } from "./sidePanel"
 export { modalStore } from "./modal"
diff --git a/packages/client/src/stores/screens.js b/packages/client/src/stores/screens.js
index f85675e389..6193dcca94 100644
--- a/packages/client/src/stores/screens.js
+++ b/packages/client/src/stores/screens.js
@@ -7,7 +7,7 @@ import { dndIndex, dndParent, dndIsNewComponent, dndBounds } from "./dnd.js"
 import { RoleUtils } from "@budibase/frontend-core"
 import { findComponentById, findComponentParent } from "../utils/components.js"
 import { Helpers } from "@budibase/bbui"
-import { DNDPlaceholderID, ScreenslotID, ScreenslotType } from "constants"
+import { DNDPlaceholderID, ScreenslotID, ScreenslotType } from "@/constants"
 
 const createScreenStore = () => {
   const store = derived(
@@ -99,7 +99,6 @@ const createScreenStore = () => {
             normal: {
               width: `${$dndBounds?.width || 400}px`,
               height: `${$dndBounds?.height || 200}px`,
-              opacity: 0,
               "--default-width": $dndBounds?.width || 400,
               "--default-height": $dndBounds?.height || 200,
             },