A Structural Warranty is an insurance policy designed to protect funders and homeowners from latent structural defects that may occur following the practical completion of a build. They are normally for a period of 10 -12 years after completion and there are a range of warranty covers to suit all types of projects. Without an approved warranty in place, mortgage lenders may not release funds which will halt the sale of the house or development. Some warranty providers like the LABC offer feedback in the form of ratings for homebuilders to use as a marketing tool to future new home buyers.
The Consumer Code for Homebuyers was set up to protect those buying new homes and inform them of their rights before and after moving in. The Code contains requirements that all home builders who register homes with: NHBC, Premier Guarantee, LABC Warranty and Checkmate must comply with. These warranty bodies represent over 95% of the new homes built in the UK.
We’re going to look at six Structural Warranty Providers in the industry, not all are included in the list above, but that we have first-hand experience with and would recommend.
But first a reminder that a structural warranty is essentially an insurance policy and when comparing prices or considering one policy over another you need to be aware of certain things. Please check for; inclusion of a period of defects, if water egress is included, any overall financial limits or limits per house and which insurer is underwriting the policy. It’s important to be sure the underwriter is accepted by mortgage lenders or this could stop the sale of the house.
Because LABC Warranty works in partnership with Local Authority Building Control it is probably the best know provider of building control and warranties throughout England and Wales. Underwritten by well–known names AXA and Aviva they also have a wealth of additional accreditations like RIBA and HBF. LABC are also founding members of the consumer code for homebuilders, have their own awards ceremonies and are partners in the new homes review giving homebuilders an independent rating for customer satisfaction.
They cover four main areas; builders and developers, self-builders, housing associations and home owners and 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. They have more information and a resource hub with helpful articles and calculators on their website.
The LABC has a network of over 3500 surveyors to support their warranty clients.
For more information visit www.labcwarranty.co.uk
Premier Guarantee have been in the market for over 20 years and are well regarded. They work with a panel of insurers so are trusted and approved by all major mortgage lenders. They have their own team of risk management surveyors who will help their clients with building controls and warranty standards.
Premier Guarantee offer a range of cover types tailored to suit different schemes and users from new homes to build–to–rent projects to social and affordable developments for rent. There are covers for commercial and high value products (£25M+).
Premier Guarantee also have cover for what could be considered remedial – completed properties built without the benefits of a structural warranty and homes which have been acquired through Developer/Builder insolvency whether completed or not.
Their website has a resource hub with helpful articles, tools and calculators.
Premier Guarantee is the trading name of MD Insurance Services Limited which is also the limited company behind the LABC Warranty. Whilst the branding and the consumer journey is different the technical manual is almost identical.
For more information visit www.premierguarantee.com
One guarantee provide a range of specialist policies from new home, to self–build, to social housing, mixed developments and commercial as well as Machinery Inherent Defects cover, insuring against mechanical and electrical faults of machinery installed as part of the project. It also offers warranty replacements for homeowners or developers affected by the bankruptcy of Alpha Insurance A/S and have a CRL home warranty policy that are now invalid.
Users and supporters of the Consumer Code for New Homes this is an additional layer of protection for its customers and their warranties are backed by AA–rated insurers, Standard and Poor’s. One Guarantee offer 12 years as standard (apart from completed homes) and charge no fee or additional costs. Recognised by UK mortgage lenders and listed under the UK Finance/CML Handbook as an acceptable warranty.
As well as additional financial services such has indemnities, they also offer acoustic and air pressure testing, energy performance assessments and building control.
For more information visit www.oneguarantee.co.uk
BuildSafe is one of the UK’s leading brokers in building warranties, as well as offering development finance.
The difference in being a broker is that they are able to search the whole of the market for you, for the best policies and most competitive quotes from the major warranty providers. This means you save time obtaining multiple quotes as they will do the searching and comparisons for you.
Although the policy and its insurer may differ BuildSafe warranties are recognised by the Council of Mortgage Lenders and are accepted by all high-street banks.
Working with a broker, as opposed to going direct means you have access to independent advice and a wider range of policies and lenders.
For more information visit www.buildsafe.co.uk
SWJ comments ‘Build Safe list a number of developers as their clients but they are also popular in the self build market. As a broker they are able to obtain quotations for cover that doesn’t include the two year developer liability period making their offering an attractive proposition to a person building their own home. ‘
The National House Building Council is the UK’s largest provider of new home warranties. According to their website around 80% of newly built homes have a 10 year NHBC warranty. They are also the UK’s largest single approved inspector for building regulations.
The warranties are offered through their Buildmark product and provides protection through a two year developer liability period followed by an eight year insurance policy for physical damage caused to the home by a failure to build to the NHBC technical requirements.
The NHBC is a not for profit company and reinvests their profits into research and other activities to raise the standard of new homes.
For more information visit www.nhbc.co.uk
Q Assure Build
The Q Policy from Q Assure Build Ltd is a Structural Defects Warranty for new build, refurbishment and conversion developments. Q Assure Build are maybe not as well known as the other providers we have mentioned but they have all you need to obtain a structural warranty with confidence. They have 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 can offer to satisfy the mortgage lending criteria.
Q Assure are also members of the Consumer Code for New Homes and claim to offer a more flexible approach. They claim ‘Our highly risk-managed, quality focused approach delivers a flexible insurance approach to the Residential and Commercial Property Sectors, offering a true alternative to the standard warranty available…which puts quality build and customer service first.’
For more information visit www.qassurebuild.co.uk
SWJ Comments ‘The value for us and our clients when working with Q Assure Build is that they are willing to be flexible when considering what is realistically needed investigation wise and are happy to accept an engineer’s letter rather than a fully published report. It means that rather spending £3000 on a ground investigation, clients can obtain a warranty with a targeted specification that assures all parties that due diligence has been taken’.
‘For example – we’re working on a private client housing development for a single but substantial house. Q Assure Build agreed that there was no need for a full investigation and were satisfied with our assessment of the situation using trial pits. In this project there were no trees so there was no need for Atterberg limit tests for heave problems etc. which other warranty providers may have insisted on as part of a full report, but that were unnecessary. This more selective but targeted approach will save clients on the costs and timescales of a full the investigation’