One of the advantages of buying a new-build home is that it comes with a 10-year warranty.
The warranties give you peace of mind that if there are problems with your property’s structure or other defects, you won’t have to pay to get them fixed.
Here’s a rundown on everything you need to know about new-build home warranties.
What are new-build home warranties?
New-build home warranties are insurance policies that cover defects in a new-build property.
Unlike regular home insurance that is taken out by the homeowner, new-build warranties are taken out by the developer to provide peace of mind to the homeowner that any problems will be fixed.
They typically last for 10 years after you complete the purchase of your new-build home.
What do the new-build warranties cover?
The warranties offer two key areas of cover:
Defects for two years, including issues such as:
leaky windows that haven’t been sealed properly
faulty electrical wiring
During this period if a defect is detected, the developer is obliged to come and fix it.
2. Structural issues for 10 years, including defects to a home's designated load-bearing elements.
Only major structural problems are included, such as issues with the roof, load-bearing walls and foundations of the property.
The warranties also cover your deposit, in case your developer goes out of business after you have already made a down payment, but before your home is complete.
What don’t new-build warranties cover?
Defects that occur after the first two years
Minor structural issues that are not the result of poor building work
Problems with damp or condensation that aren’t caused by the builders
Natural wear and tear
Damage caused by bad weather
Issues that occur because you failed to maintain your property
Do different developers offer different warranties?
Yes, different developers offer different protections, so it’s important to check what’s covered.
The National House-Building Council is the largest provider of new build warranties, covering around 70% to 80% of the market. Other schemes include LABC Warranty, Checkmate and Premier Guarantee.
All of these schemes are members of the Consumer Code for Home Builders and while the cover is broadly similar between them all, it is a good idea to make sure you read the policy to understand exactly what is and isn’t covered.
The differences between different warranties are often down to the insurer that is underwriting the policy.
Do I still need to take out buildings insurance?
Yes. A new build warranty only covers major structural issues caused by building work not being carried out to a high enough standard.
So you should still take out buildings insurance on your property to cover things that aren't included in the warranty, such as weather damage and structural issues caused by subsidence.
Having a buildings insurance policy is also likely to be a condition of your mortgage.
How do I make a claim on a new build warranty?
If you spot a problem with your property that you think is covered by your warranty, it's important to report the issue as soon as possible.
If you delay reporting it and it gets worse, it may not be covered by the warranty.
For defects during the first two years, you should contact your developer. Details on how to do this should be available on their website.
You must allow them a reasonable time period and reasonable access to your property to fix the issue.
It’s always a good idea to keep a note of all communications with the developer in case there are issues down the line.
If your property is more than two-years old and you are claiming for a structural issue, you should contact the provider of your new-build warranty directly.
What can I do if my developer isn’t helpful?
If your developer isn’t responding to the issues you have raised, or you are not happy with their response, you can raise the issue with the provider of your warranty, such as the National House-Building Council, as they typically offer a free dispute resolution process.
If you aren’t happy with the way your warranty provider is responding to a complaint you can contact the Financial Ombudsman Service.
This is the correct ombudsman to use, as a new home warranty is technically an insurance product, meaning it falls under the Financial Ombudsman Service.
What happens if my developer goes out of business?
Your new-build warranty is not provided by your builder, so it will not be impacted if they go out of business.
If the insurer who provided your warranty goes bust, another insurer may agree to take over the warranties, but you are likely to have to pay for the new cover.
You may receive some compensation from the Financial Services Compensation Scheme, but it is unlikely to be a large amount.
If I buy a new-build home from the previous owner, am I still covered by the warranty?
A new build warranty stays with the property regardless of whether the ownership changes.
As a result, if the property you buy is less than 10 years old, you will still be covered by the warranty. Just make sure the seller’s solicitor gives you the policy details and certificate.
But any work that has been carried out on the home by the previous owner will not be covered.