New build warranty help

3 years ago

I’m in the process of buying a new build house, but as part of the mortgage application process the developer has revealed there is only an architects certificate rather than something like NHBC warranty.

My understanding is that the architects certificate essentially confirms that the house has been built according to the plans and to the required standards etc but provides absolutely zero warranty. If some kind of structural problem were to develop then the architect could be sued if they were negligent but it doesn’t cover snagging type issues in the first 2 years as NHBC.

HSBC have already confirmed they won’t mortgage the property without an appropriate warranty, but before I search for another mortgage I just wanted to see what the general opinion was. I feel very exposed if there’s no warranty and may have to pull out unless there’s a sensible alternative.

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Jonathan

3 years ago

I think the earlier comments could leave you alarmed and so for balance I wanted to offer a counter position.

New homes developers have a super offering- you often get to make choices in finishes that you wouldn’t have with houses sold to subsequent owners, they often have incentives to make it easier to buy and in a development of similar properties you know what you are buying and usual restrictive covenants stop that changing significantly for usually a decade. If you had everyone building their own house you would have a patchwork of different taste levels and likely a lot of half built homes to look at.

I think you need to consider the possible implications- if you have snagging over the next couple of years are the builders still going to be around and are they going to be motivated to protect their reputation and fix the earlier mentioned leak in the shower. Separately would an NHBC guarantee cover you for subsidence more than your own buildings insurance?
Furthermore people assume that a buildings warranty says the house has been built to a high standard but the local authority should have provided a certificate demonstrating building regs have been met (to be checked through solicitors).
And lastly there are companies other than NHBC that provide warranties for new build properties so for your piece of mind you could enquire with your lender which providers they may accept and then work out who is going to pay for it.

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Comments (7)

jessa61
3 years ago
last modified: 3 years ago
I wouldn't suggest, at first instance, looking for a new mortgage lender; there has been a large (and much welcomed) push towards responsible lending in more recent times. Banks are no longer simply protecting their own financial interests without any thought to those they are lending to and so if HSBC will not offer a mortgage without a new home warranty, I would be wary of lenders who would.

In addition, with the builders themselves, new home warranty is fairly standard (which of course they know) so you have to question why they are not offering one. There are various reasons for this but typically these are not in your favour.

Have you raised these concerns with the developer?

The architect's certificate will state that the development has been built soundly but what about snagging issues which are always present with new builds? Who will cover these costs?

Similarly if say the shower tray has a leak and hasn't been made water tight and so a large leak occurs, what happens then? The architect cannot be reasonably expected to check every nail has been hammered correctly, every shower properly sealed and so forth.

I'm not trying to scare you / put you off in anyway and I apologise if I am but these are valid questions to raise with the developer in writing. Please ensure all correspondence is in writing so you have a written record should you ever need. They may have valid reasoning, you just need to know what this is and feel secure and confident in their response. Good luck
arc3d
3 years ago
Do your research. Hire a professional if you need to. I've seen some disasterous new builds. From jammed windows to loose front doors to bricks that can be removed by hand. I've even inspected a house where the landing was sloped!

In one development an independent company is hired to test the houses' thermal credentials, but they agree to only test one house in the development. I noticed that particular house had every crack and gap covered in silicone to make it air tight, but the rest did not. Of course the sample house will be used to determine the results for all the rest.

I am of the firm belief that developers should not be allowed to buy land and instead individuals should buy single plots, then with the help of the developer build their own home.

In my experience most developer housing is of a poor quality.
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Jon C
Original Author
3 years ago
Thanks for all your comments. Unfortunately (but unsurprisingly) the estate agent wasn't very clued up on what an architects certificate was and was insistent that it was a warranty. I've now got details from my solicitor and sent on to them.

I'm able to obtain a mortgage from other lenders but the decision now is whether I'm willing to take that risk without a warranty. I've spoken to another small local developer that I trust and they only provide architects certificate too, mainly because NHBC aren't interested if they're building less than 50 properties a year. The developer I'm buying from does a good job, I've seen other builds, but there is always a risk.

I'm now trying to get agreement to have a clause in the contract to allow a pre-completion professional snagging inspection and an agreement about snags in the first 18-24 months but my solicitor isn't confident it will be accepted. If that is the case then there will be more alarm bells.
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That all sounds like an excellent plan
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New build warranty help

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