When buying a newly constructed home in the UK, new build developers typically provide a warranty that protects against certain defects for the first two years after legal completion. Home warranty cover is an essential safeguard included with a newly built property, ensuring protection for the homeowner’s investment. However, the exact coverage can vary between house builders, and these warranties apply specifically to a newly built property. A build guarantee also provides long-term assurance for buyers of new homes. This article explains what homeowners can expect their new home warranty to cover, as well as where there may be gaps.
Builder Warranties in the New Home Construction Sector
In short, a new build warranty provides a safety net in case serious defects arise shortly after moving in. All house builders registered with warranty providers like the National House Building Council (NHBC) must adhere to their standards. Many warranty providers also require developers to sign up to a consumer code, which ensures a fair sales process and good customer service for buyers. Additionally, reputable developers often go beyond these base protections. Nonetheless, new homeowners may still encounter unexpected exclusions, limitations or processes.
Types of Warranties: Structural, Defects, and More
When purchasing a new build, it’s important to understand the different types of warranties that may be available to provide protection for your property. The most common is the structural warranty, sometimes referred to as a building warranty, which is an insurance policy designed to cover major structural defects in your home. This type of warranty typically lasts for 10 years and is a requirement for most mortgage lenders, giving both buyers and lenders peace of mind that the property is protected against significant structural issues.
In addition to the structural insurance period, there is usually a defects insurance period, which covers the first two years after completion. During this time, the builder or developer is responsible for addressing any defects in workmanship or materials that arise. After the initial defects period, the structural warranty continues to provide cover for major structural defects, ensuring that homeowners are protected against latent issues that could affect the building’s integrity.
Other types of warranties may include home warranty policies that cover appliances and internal systems, but these are separate from the main structural warranty. Understanding the distinction between these warranties helps new build buyers ensure they have the right level of protection for both the short and long term.
Coverage Duration
The majority of major developers now offer at least a two-year new build warranty as standard. New build warranties are typically divided into two periods: the initial defect liability period (first two years) and the subsequent structural insurance period (remaining eight years). Many extend this to five or even ten years for elements like drains, gutters and major structural issues. The structural insurance period usually applies to the completed property and covers the remaining eight years after the initial defect period, mainly protecting against major structural components. Homebuyers should clarify durations upfront, as policies can lapse over time. Shorter 12-month warranties may apply to parts or furnishings.
Defects and Damage
When it comes to defects, new home warranties typically cover building elements that do not meet the UK’s Building Regulations or the warranty provider’s own technical requirements. This includes matters impacting health and safety. The warranty also covers repairs for defects found during the coverage period, provided these issues result from failure to meet building standards. Additionally, warranties usually address physical damage that occurs during the construction process. Some may also cover pre-existing site conditions.
Wear and Tear Exclusions
Standard warranties do not, however, protect against normal wear and tear or matters like minor cracking; damages resulting from general wear are also excluded from coverage. There are often exclusions for aesthetic blemishes like chipped tiles unless these indicate an underlying defect. Additionally, policies reference ‘tolerances’, establishing thresholds for when imperfections become reportable. Understanding these helps homeowners determine if issues may be covered.
Making Successful Claims
To claim under their warranty, the homeowner must usually submit written notification of any defects within a set timeframe, including evidence like photos. The house builder or warranty provider then sends an inspector before determining the next steps. If they confirm a valid defect, the developer arranges and pays for repairs by approved contractors. Some warranties may also cover professional fees for architects, surveyors, or engineers required to assess or rectify the defect.
Getting Issues Resolved
That said, the claims process does not always go smoothly. Builders may push back on certain complaints, denying breaches of standards. If the developer fails to address defects during the warranty period, homeowners may need to escalate the issue to the warranty provider or relevant authorities. Additionally, some use contractors who perform subpar corrective work. Persistence and escalation through management tiers or third-parties like NHBC can help homeowners achieve satisfactory outcomes. But disputes can take months.
Hidden Exclusions
Beyond openly stated exclusions like wear and tear, new build warranties also often contain limitations that surprise homeowners. For example, many policies only cover issues that impact a building’s physical stability or weatherproofing. Latent defects—serious issues that are hidden and only discovered after some time—are usually only covered if they qualify as major defects. Problems like a defective boiler may not qualify. Damage caused by bad weather is typically excluded from warranty coverage and may require separate home insurance. Homeowners should read the fine print carefully.
Pre-Existing and Third-Party Elements
Additionally, warranties tend not to address flaws in parts like radiators, appliances or fittings installed by manufacturers. They also exclude pre-purchase elements like turf, trees and boundary walls. These come under separate supplier guarantees but tracing responsibilities still proves difficult when problems arise.
Mixed use developments may require tailored warranty policies to ensure both residential and commercial components are adequately covered.
Warranty Transfer and Assignment: What Happens When You Sell?
If you decide to sell your new build home before the warranty period expires, the good news is that the warranty is usually transferable to the new owner. This means the new owner benefits from the remaining cover, whether it’s for structural defects or within the initial defects period. The transfer process is generally automatic, but it’s always wise to check the small print in your warranty documents to confirm that the transfer is valid and to understand any steps you may need to take.
For the new owner, it’s important to be aware of how much time is left on the warranty and any conditions that might affect their ability to make a claim. In some cases, the warranty may need to be formally assigned, which involves transferring the rights and obligations from the original owner to the new owner. Understanding the terms of transfer or assignment ensures that both sellers and buyers can avoid unexpected gaps in cover and maintain the protection that a new build home warranty provides.
Self Builders and Warranty Options
Self builders have unique needs when it comes to warranty protection, as they are not automatically covered by the same warranties that come with developer-built new homes. A self build warranty is specifically designed for those managing their own construction projects, offering cover against structural defects and other issues that may arise during and after the build. These warranties are available from a range of warranty providers, including the National House Building Council (NHBC) and other specialist build warranty providers.
A self build warranty typically covers the construction process and provides protection for up to 10 years after completion, giving self builders confidence that their investment is safeguarded. It’s essential for self builders to carefully review the terms and conditions of any warranty to ensure it meets their specific needs and provides adequate cover for the building, as well as any potential structural defects. Choosing the right build warranty can provide vital protection and peace of mind throughout the self build journey.
Getting Additional Protection
Given the potential gaps described above, owners may benefit from taking out special new home insurance policies. These can provide extra coverage around matters excluded in the builder’s warranty. However, additional protection comes at an added cost, of course. These additional costs may include expenses required to comply with building regulations or local authority requirements. But the peace of mind may justify the spend for some.
Additionally, the financial services compensation scheme can provide protection if a warranty provider becomes insolvent.
Mortgage Applications, Home Insurance, and Your Warranty
When applying for a mortgage on a new build, most lenders will require a structural warranty to be in place before approving the loan. This is because a structural warranty provides essential protection against losses caused by structural defects, which could otherwise impact the value and safety of the property. In addition to the warranty, homeowners should also arrange buildings insurance to cover risks such as fire, theft, and weather damage, as well as contents insurance for personal belongings.
Many warranty providers, such as Premier Guarantee, offer a range of insurance products to complement the structural warranty, including buildings insurance and contents insurance. Reviewing the terms of both your warranty and insurance policy ensures you have comprehensive protection for your home. By combining a structural warranty with appropriate home insurance, homeowners can safeguard their property against a wide range of risks, providing peace of mind for both themselves and their mortgage lender.
Architect or Professional Consultant’s Certificate: An Alternative Route
For some new builds, particularly those constructed by smaller builders or self builders, an Architect or Professional Consultant’s Certificate can serve as an alternative to a traditional warranty. This certificate, issued by a qualified architect or surveyor, confirms that the building has been constructed in accordance with the required standards and provides a level of protection against structural defects for up to six years.
While this option can be suitable for certain projects, it’s important to note that an Architect or Professional Consultant’s Certificate does not offer the same breadth of cover as a full structural warranty. The certificate may not be as widely accepted by mortgage lenders, and the protection period is typically shorter. Homeowners and self builders should carefully consider whether this route provides sufficient cover for their needs, and review the terms to ensure they understand the extent of the protection offered.
Understanding the Warranty Provider’s Complaints Process
If homeowners feel their builder has wrongly refused a claim or failed to adequately resolve a verified defect, they can pursue formal complaints. Most warranty providers like NHBC have a defined resolution process. This usually involves escalation across multiple review stages with opportunities for homeowners to submit evidence supporting their position. Understanding and appropriately navigating this framework helps secure the required end result.
If the warranty provider does not resolve the issue, homeowners may need to consider legal action or rely on their homes insurance for further recourse.
Extending Cover with Home Building Plans Insurance
In addition to one-off new home policies, buyers can get ongoing protection through special Home Building Plans Insurance. Buyers can also explore policies from other warranty providers to find the best fit for their needs. As well as covering a broad range of warranty exclusions, these flexible plans allow customers to adjust coverage as needed over time as priorities shift. Factors like expanding family home improvements and changing likelihoods of particular issues arising mean policy requirements change. Adjustable building plans insurance caters for this.
Know Your Rights Under Consumer Protection Laws
Homeowners should also familiarise themselves with their rights under consumer laws. Even where warranty exclusions apply, legal doctrine around expectations of ‘satisfactory quality’ offers backup protections if builders refuse to address serious defects impacting liveability. While the claims process under consumer regulations can also prove lengthy, persisting can pay off. For more detail about consumer codes and dispute resolution processes, readers can consult dedicated guides. Of course, prevention is better – so homebuyers should undertake thorough pre-purchase surveys.
New build home warranties undoubtedly provide vital protections for buyers or new construction properties. But as highlighted here, they do not constitute an absolute guarantee against all eventualities. To make sure their purchase has comprehensive cover, homeowners should inspect policies closely and consider supplementing with specialised insurance. Build Zone is a reputable provider of site insurance and structural warranties for new homes and self-build projects.
