A building warranty is a comprehensive insurance policy that is provided by a developer to the buyer. It offers peace of mind that the building has been constructed to a standard set by the warranty provider.
Without a warranty, you can’t get a mortgage. As such, there’s little point in building a house without one, unless you’re certain you have a cash buyer.
It’s safe to say that all respectable lenders will expect you to have a building warranty in place, and RQ Capital is no exception. However, different types of warranty providers are available, and we’re willing to consider them all. Rest assured that we won’t discard your loan application based purely on your warranty provider.
What is a building warranty?
A warranty is a guarantee that a manufacturer makes regarding the condition of a product. It also refers to the terms and situations in which repairs, or exchanges will be made if the product does not function as originally described or intended.
A building warranty, sometimes known as structural or latent defects insurance, is defined as ‘an insurance policy that covers defects in the workmanship, design and materials used in the construction of a self-build’. New build warranties are usually a 10-year policy on new or renovated properties.
Can I build a house without a warranty?
Although a structural warranty is not compulsory by law, it’s almost impossible to sell your home within 10 years without one. Only cash buyers will be able to purchase your property, and most lenders will insist that you have warranty cover. So it really is vital that you have one in place.
But what happens if you built your development without a warranty in place? The good news is, you can apply for a retrospective warranty, although the process is more complicated, and you will likely end up paying more. However, if you’re selling a house that you built within the last 10 years, this is your best option, rather than waiting for that elusive cash buyer.
Which warranty provider should I choose?
These are some of the warranty providers we have identified, along with a few of the benefits. However, please ensure you undertake your own research, and be aware that we don’t endorse any one in particular. Please contact the providers themselves for more details, and to make an application.
This is probably the best known provider of building control and warranties throughout England and Wales thanks to its partnership with Local Authority Building Control. They cover builders and developers, self-builders, housing associations and homeowners, and they have a range of policies in each sector. Because their policies are backed by ‘A rated’ insurers, they are accepted by all major mortgage lenders.
Premier Guarantee works with a panel of insurers, and it is trusted and approved by all major mortgage lenders. It has its own team of risk management surveyors who help clients with building controls and warranty standards. And it offers cover that is tailored to suit different schemes and users, including new homes, build-to-rent projects, and high value products (£25m+).
One Guarantee provides a range of specialist policies, including new home, self-build, social housing, mixed developments and commercial developments. It also offers warranty replacements for homeowners or developers affected by the bankruptcy of Alpha Insurance A/S who have a CRL home warranty policy that is now invalid. In addition, it offers acoustic and air pressure testing, energy performance assessments and building control.
BuildSafe is one of the UK’s leading brokers in building warranties. As a broker, it searches the market for the best policies and most competitive quotes from all the major warranty providers. This means you save time obtaining multiple quotes. BuildSafe warranties are recognised by the Council of Mortgage Lenders and are accepted by all high-street banks.
NHBC (National House Building Council)
The NHBC is the UK’s largest provider of new home warranties. According to its website, around 80% of newly-built homes have a 10-year NHBC warranty. It is also the UK’s largest single approved inspector for building regulations. The NHBC is a not-for-profit company which reinvests its profits into research and other activities to raise the standard of new homes.
Q Assure Build
Q Assure Build offers warranties for new build, refurbishments and conversion developments. It has a long list of lenders that currently approve ‘The Q Policy’. Some lenders will also accept a Professional Certificate in lieu of an approved warranty scheme, which Q Assure Build can offer to satisfy the mortgage lending criteria.