What is NHBC warranty?
Most new build properties are covered by the National House Building Council’s (NHBC) warranty. There are other approved and acceptable warranties issued but NHBC is the one most people have heard of and seems to be the most popular used by builders.
NHBC cover is important because it provides warranty and insurance protection for newly built homes in the UK. The cover provided ensures that homes meet high construction standards and offers financial security if defects arise. The warranty and insurance policy are often referred to as a "Buildmark" warranty in correspondence.
From a buyer’s perspective, for the first two years after the house is constructed, the NHBC warranty provides cover for both minor defects and structural issues. For the remaining period (usually up to ten years), it covers only structural problems.
The warranty provided by NHBC acts as a safeguard against unexpected and costly repairs in the early years of owning a newly built home.
An extensive booklet called the Buildmark Policy Booklet sets out in detail what is covered by the warranty and the minimum claim value. This document is issued along with the insurance certificate on completion of the purchase taking place.
Mortgage lenders require that a warranty is provided for a new build property and by having the cover it also helps homeowners resolve disputes with builders if their home does not meet NHBC standards.
The benefits of having this cover are:
- Structural Guarantee: a 10-year guarantee is provided for structural defects. The first two years cover most issues with the builder responsible for repairs, while years three to ten cover major structural problems, such as subsidence foundations, walls, roofs and chimneys.
- Peace of Mind: the presence of cover gives buyers confidence and assurance that the newly built property meets strict building standards set by NHBC. The NHBC undertakes inspections during construction and once the house build is complete and ready for occupation.
- Additional Coverage: NHBC also provides protection against non-compliance with building regulations and contaminated land in certain cases.
- Resale Value: a home with a NHBC warranty often retains higher resale value because future buyers are assured of quality and protection for the remainder of the ten-year term. Even after this has expired, future owners are also comfortable in the knowledge that the house benefitted from the cover on construction.
- Mortgage Requirements: Many lenders insist on NHBC or equivalent cover before approving mortgages for new-build properties.
Your solicitor acting will ensure that the warranty is issued on completion of a purchase of a newbuild property and, if you are buying a property that is still less than ten years’ old, will obtain the warranty and change of ownership documentation to allow later buyers to benefit from the remainder of the standard cover issued.
If you would like to discuss this topic, or any conveyancing matter further, please contact Julie Stewart on 01283 214231 or at j.stewart@timms-law.com.
For more information about new build properties visit our website here.
