HomeOwners Alliance logo

Become a member today to access our home helpline, discounted conveyancing, expert advice & legal service

New Home Warranties – What they do and don’t cover

New home warranties are designed to offer buyers peace of mind that any defects in their home will be put right. But, while warranties typically last 10 years, what’s covered in that period is not as straightforward as you might think.

What new home warranties do and don't cover

Buying a new build home should mean you encounter fewer problems than you would with an older property. Unfortunately that’s not always the case. If you move into a newly built property, you’re going to want reassurance that the developer will fix any problems that occur. And that’s where building warranties come in. 

What is a building warranty?

A building warranty is essentially an insurance policy for newly built homes. The warranty is taken out by the builder or developer but is in place to protect you, the buyer.

Who provides new build home warranties?

There are three main providers of new home warranties – the National House-Building Council (NHBC), Local Authority Building Control Warranty (LABC) and Premier Guarantee. These operate under the Consumer Code for Home Builders.

The NHBC warranty is the most common, covering 80% of the new build market.

There are also warranty providers operating under different codes of conduct. BLP, for example, adheres to the Code for the Purchase of New Homes. The BLP Warranty is a little different to the three above because the builder does not have to pay a membership fee to purchase a warranty, a BLP warranty can be issued for a property that is already a year old and BLP will step in to fix any defects from day one. NHBC, LABC and Premier will all expect the builder to remedy any defects within the first two years and will only step in if there is a dispute.

The Federation of Master Builders (FMB) also offers a warranty under the new Consumer Code for New Homes (CCNH) while Checkmate warranties operate under the Consumer Code for Builders of Homes for Sale.

How long do warranties last?

Typically, building warranties last for 10 years. 

What do they cover?

If you buy a home off plan (i.e. before it is built) as is often the case with new builds, once you exchange contracts your warranty will cover your deposit against the firm going insolvent. This means if the builder goes bust and doesn’t start or complete the property your warranty provider will reimburse your deposit.

Once the property is built, the warranty is split into two periods – the defects insurance period, which covers the first two years, and the structural insurance period which covers years three to 10.

During your first two years in the home, if there are issues with the work the builder has done, such as the windows letting in rain because they’re not sealed properly or the heating not working because the pipes are faulty, the builder is obliged to come and fix them.

During the structural insurance period, the builder is only responsible for major problems with the structure of the house. This includes foundations, the external render, roofs, ceilings, chimneys and load-bearing parts of the floors.

Smaller ‘defects’ are now your own responsibility, including non-structural defects such as problems with your gutters or fixtures and fittings.

It’s important you are clear on when your warranty kicks in so that you can make a note of when the initial two year period will expire

What don’t they cover?

Understandably, natural wear and tear isn’t covered by a new home warranty, neither is weather damage or any problems resulting from you not maintaining the property adequately.

Damp and condensation may be covered but only if they have occurred as a result of the builder’s failure to comply with the warranty provider’s standards (in other words, if it’s the builder’s fault!)

Be careful of the small print

As all warranty providers are insurers, it’s worth noting that they may not always be as willing to carry out (and pay for!) remedial work. As is always the case with insurance, the small print is key. Make sure you read all of the documentation and question anything that doesn’t seem quite right.

What do I do if I spot a defect?

Make sure you contact the builder as soon as possible. Keep a record of all communication including dates and times of telephone calls. This will be needed if there are problems with getting your builder to address the issue.

Both the LABC and Premier Guarantee warranty policies have a £1,000 excess. This means you’ll pay the first £1,000 of each claim made under the warranty

What if the builder won’t honour the warranty?

The three approved providers of warranties in the UK all adhere to the Consumer Code for Homebuilders. The code features a dispute resolution scheme which you can use during the first two years if the builder won’t carry out the necessary remedial work. 

Remember, the builder will only be liable for problems detailed in the contract. We’d always advise buyers to make sure there is a “snagging” provision to allow you to get little issues sorted – such as doors catching on carpets – directly with the developer.

What if I move house?

If you move, the warranty is transferred to the buyer of your home. Any work you have done on the home yourself – such as loft extensions or conservatories – will not be covered by the warranty. If you are buying a new home from a previous owner it’s also worth noting that the company warranties supplied for such works are not always transferrable. In other words, if the seller had a conservatory installed with a ten year guarantee from the installation firm, when they sell the house to you the guarantee often becomes invalid.

Can warranties affect my mortgage application?

They can do. It’s a condition of most mortgage applications that a warranty must be in place if you’re buying a newly built home.

Should I take out home insurance too?

Yes you should. Aside from the fact your mortgage lender will more than likely require you to have home insurance in place, it’s just good sense to protect your investment. The new home warranty only covers problems that are the builder’s fault. If your home floods because of bad weather or is damaged in a fire you won’t be covered.


Leave a comment




* required

25 Comments

  1. Hi I brought a flat as a new build a yer ago and since then the NB warranty provider has gone bust. The freeholder (weeley Properties LTD ) refuses to replace it or even to communicate with anyone over it. Since November last year i have tried to sell the apartment and did twice but lost both sales due to the lack of NBW.
    Can you help me please -doex the builder have a legal requirement to get a replascement NBW ? There are 26 other flats in this build that are also not covered. Is it legal for him to block our sale this way? Is there anything i can do to get out of this situation?

    Comment by Steven Martyn — April 17, 2019 @ 12:33 pm

  2. Sorry also will this affect remortgaging. Thanks

    Comment by John m — April 11, 2019 @ 7:42 pm

  3. Sorry John you have had to pay for a new policy. I would suggest that as it relates to your policy documentation then it is probably worth contacting Build Zone directly in relation to this. On some insurance policies damage to these is not covered. Always best to check with them what the endorsement means and why it is there.

    Comment by Marianne Cole — April 12, 2019 @ 2:47 pm

  4. Dear sir.
    We had a warranty with Alpha insurance who are no more.

    Went to Build zone for the last remaining 8 years.cost 3000 pounds.
    Paid my money and I noticed an endorsement.

    Can you tell me is this normal.
    Endorsement says.this policy excludes any loss or damage caused by underground drainage system.

    Is it because the house is already built.
    Kind regards

    John

    Comment by John Marmo — April 11, 2019 @ 7:39 pm

  5. Helo

    We have a big leak under the master bedroom shower. We have been in the property for 2.5 years.

    During our 2 year warranty period we did make a complaint that we could hear a dripping noise in the master bedroom, the building company came round and confirmed that we didn’t have a leak and explained the noise was most likely “building settling noises”. I am not sure how much investigation work they actually did..

    We are not told from the management company that it is our responsibility and this needs to be covered by ourselves. This is going to be a big job, we will need to dry out, retiling etc.

    Do we have a case for the the damage to be covered from the building company or the management company?

    Cheers , Michael.

    Comment by Michael Kenway — April 6, 2019 @ 4:40 pm

  6. The Certificate is a statement from the Consultant that the construction of the property has been monitored and has been built in accordance with the applicable building regulations and plans, and is completed to a good standard. Unlike the warranty cover, there is no provision should the developer cease trading so issues can arise in these circumstances, either prior to completion or after.The provision of a Professional Consultant’s Certificate, although acceptable to some lenders, does not therefore provide a similar level of cover nor the certainty of an NHBC warranty. It can be the only way to ensure that a new build property is acceptable to future purchasers, their lenders and their solicitors, irrespective of the limitations and restrictions in the cover provided.

    Comment by Chandni Sahni — March 5, 2019 @ 4:16 pm

  7. (Submitted on 2/3/2019)

    My new-build property didn’t come with any of the warranties you mention, but with a 10-year Professional Consultant’s Cerificate. What’s the difference, please?

    The Certificate is very brief (much less than one side of A4, so just a couple of sentences) and no terms and conditions are attached to it.

    Comment by J. Phillips — March 2, 2019 @ 12:55 pm

  8. Hi Suzanne – we would say it’s best practice for your solicitor to get all relevant documentation at completion. Best of luck!

    Comment by Naomi — February 12, 2019 @ 9:58 am

  9. Is it possible to move into a new build appartment before receipt by our solicitor of the building warranty certification

    Comment by Suzanne — February 9, 2019 @ 12:35 pm

  10. I Annette, you sound as though you’re typing this from the US? We’re a UK based organisation and can’t advise on the US I’m afraid.

    Comment by Sara Hind — February 11, 2019 @ 2:47 pm

  11. My son was to close and get the keys to his new construction home today but
    This morning he finds out the developer called his realtor saying there is a leak in one of the upstairs bathroom. He is living in a hotel, his family is to arrive next week from another state in the next few days. The developer is not sure how much if a damage it is and said it can’t be fixed over this weekend. Now what?

    Comment by Annette — February 8, 2019 @ 7:22 pm

  12. Hi Mohammed, according to their website Kier Developments are covered through the NHBC warranty. You need to try and find the warranty or request a copy from Kier and have a read through about what it covers. Unfortunately it would depend on where the leak has come from i’m afraid as to whether it would be through the warranty or your own home insurance. If you do believe you have a claim through NHBC then their website explains how to make a claim.

    Comment by Marianne Cole — February 7, 2019 @ 11:02 am

  13. My Mother purchased a new build property in December 2016, she has been informed by severn trent water that there is a leak in the property. Could I be advised as to who is responsible for the repair is It Kier Development who she bough the new build from or my mothers insurance company

    Thanks

    Comment by Mohammed — February 5, 2019 @ 9:18 pm

  14. Sorry to hear that your sister is having problems with her home. We have been campaigning for some time for increased regulation of new builds. We have a guide on new build disputes, written by lawyers from Kings College London, which your sister might find helpful: https://hoa.org.uk/catalogues/buying-a-new-home-your-rights/

    Comment by Sara Hind — February 5, 2019 @ 4:07 pm

  15. I believe my sister gas purchased a home that is not up to building standards with a water tank leak the first year then second and now another leak in the downstairs toilet. The building company claim they only provide one year insurance. Can you advise what I/my sister should do

    Comment by Eme — February 2, 2019 @ 10:18 am

  16. Hi Andrew, is your builder a member of a Trade Association? While a Trade Association membership can’t ensure work will be perfect every time, you should be able to expect any problems will be dealt with fairly, and you can turn to their Association for help with any unresolved issues and complaints. I’m also wondering if you had a contract with the builder and what, if anything this says about warranties.

    Comment by Sara Hind — November 19, 2018 @ 3:55 pm

  17. We employed a builder to build our house working from and architect’s design. Should the builder have provided us with a warranty?

    Comment by Andrew — November 18, 2018 @ 10:05 pm

  18. Very very helpful site

    Comment by Sarah — September 28, 2018 @ 12:17 am

  19. Hi Sandra, if you’d like to consider becoming a member we may be able to help you with this.

    Comment by Sara Hind — June 27, 2018 @ 2:04 pm

  20. Bought David Wilson house and got a 5 year warranty which they now don’t do. The warranty booklet shows and includes roofs but not weather damage. We have since had a workmanship problem with it but they say it is only covered for 2 years. After we questioned them and have done many times they say it isn’t written anywhere it just is. Apparently NHBC doesn’t have it written either it just is. How can you offer people warranties but no where is it written what is excluded or included.
    Can you help in this . We are told the 5 year covers everything and has a page in the booklet about roofs!!!

    Comment by Sandra — June 15, 2018 @ 11:13 am

  21. Hi Richard, it’s usually from the date that the sale was completed.

    Comment by Sara Hind — June 12, 2018 @ 1:12 pm

  22. Hi,

    Could you possibly tell when the warranty starts for a new build purchase?

    Is it from the date the build is finished, or the date the sale is completed?

    It would seem a bit unfair if it was from the build completion if that occurs some months, or years before the owner moves in.

    Thank you,

    Richard

    Comment by Richard Davies — June 8, 2018 @ 4:02 pm

  23. Hi Liz, have you seen our Ask an Expert article on this subject? Take a look, it has some good advice which I hope will help. https://hoa.org.uk/services/ask-an-expert-2/ask-an-expert-i-am-managing/new-build-draft-and-insulation-problems/

    Comment by Sara Hind — April 24, 2018 @ 2:47 pm

  24. I have recently bought a nine and a half year old top floor apartment. The ceilings are high and follow the contours of the roof. I moved in in February and it was extremely cold, whereas the other apartments in the block were fine. I think there must be a defect in the insulation in the roof. Is there anything I can do about it? Hope you can help.
    Regards,
    Liz robson

    Comment by Elisabeth Robson — April 20, 2018 @ 12:17 am

  25. I cannot see any reference to any overall controlling body for warranty providers. If a house owner is unhappy with the way he/she has been treated, whom can he/she refer or complain ?
    For example, my house has a CRL warranty. The policy refers to the fact that the builder must have complied with CRL’s technical requirements. Because of significant problems I have had, I wanted to see a copy of these technical requirements but this was refused. As it is referred to in my policy, I consider it to be part of the policy. Does the Insurance Ombudsman cover this sort of thing?

    Comment by Rod Lewis — April 1, 2018 @ 9:30 pm

Sign up to our FREE newsletter for latest advice, services and money saving offers

Sign up now

×

Don't Miss Out!


Sign up to our free newsletter for latest advice, services and money saving offers

Sign Up Image