Category Archives: Home warranty

 

11 
May

Does a new build home need a snagging survey?

new build snag checklist

Buying a new build home is exciting, but it’s important to be sure of what you’re getting before you commit to a sale. Nobody wants to move into their dream house just to discover endless problems with the building down the line. This is why it’s so important to thoroughly inspect the property before completion, giving you the opportunity to identify issues while there’s still time to fix them.

While it’s possible to do a DIY house survey, it’s easy to miss things or for developers to mislead you if you don’t know what you’re looking for. On the other hand, a structural warranty surveyor will have the experienced eye and equipment needed to analyse every aspect properly on your behalf.

Once the keys have been handed over and the home is officially yours, it can be difficult to get the seller or builder to take responsibility for fixing defects without this type of new build insurance. Here we run through the ways that new build surveys can help you, including a snag list template.

What is a snag list or snagging list?

A ‘snag’ is a slang term for a construction defect, with ‘snagging’ commonly used to refer to the process of identifying and correcting these defects. Snags tend to be the result of substandard workmanship and materials. They can be purely cosmetic, such as cracked tiles or messy paint, or more serious functional issues like faulty fittings – from windows and doors to wiring and plumbing.

The idea of a ‘snag list’ or ‘snagging list’ is to compile an inventory of existing or potential problems with a property at the time of the inspection. You can then present this information to the seller or builder, with the caveat that you cannot finalise the sale until they remedy all the issues on the list.

Of course, all new build homes undergo official checks for planning permissions before construction begins and building regulation compliance before receiving a certificate of completion. However, this doesn’t always guarantee that your new home will have the quality you expect, as these inspections might overlook comparatively minor issues, while a dedicated snag list should pick up on everything.

Who needs a professional property survey?

A snagging survey isn’t always necessary when buying a property. For example, when purchasing an older second-hand property a homebuyers’ survey would be more suitable. As this type of list is used to negotiate with the developer for further work, it’s most applicable for new build homes.

Completing a snagging list isn’t compulsory, but it’s useful when buying a new build off-plan or through the government’s Help to Buy scheme for first-time buyers. It can ensure that your finished property satisfies your expectations, rather than having to live with ongoing issues after moving in while the developer gives you the run-around – which they might try if you don’t have a warranty.

The developer isn’t obligated to provide a snagging survey for you, and they aren’t likely to offer, as many large developments are more concerned with quantity and speed than quality and attention to detail. Unless you have in-depth knowledge of construction yourself, you’re more likely to focus on superficial flaws during a DIY survey, and may not recognise the signs of more severe defects.

In these situations, it’s best to pass the responsibility to a qualified expert, who you can trust to carry out comprehensive inspections and push for resolutions to problems on your behalf. If you have a new build structural warranty in place, a surveyor should perform multiple inspections from the start of construction to right before completion, reducing the risk of undetected latent defects.

When should you get a snagging survey?

While professional inspections can take place at any point in the construction process, it’s best to do a dedicated snagging survey as closely as possible to completion. You can do this either before or after completion, but it’s best to assess the property before all work is finished and contracts signed, as the developers should be able to go back and correct the list of snags ahead of you moving in.

When you have a builder’s warranty or structural warranty that comes with the property, these policies usually give you 2 years from the property completion date to report more snags to the builder. After you move in, it’s important to document any defects you find with both written and photographic evidence from day one, so the builder can’t argue that you’re at fault for the damage.

A new build latent defects insurance policy, which is a type of 10-year structural warranty, can be an invaluable safety net if anything is missed off the snagging list. Not all defects are immediately noticeable, and some can take years to develop, long after the initial 2-year period expires. This is where the remaining 8 years of cover come in, easing the financial stress of repairing latent snags.

New build snag checklist: what to look out for

There are so many components in the construction of a house, but it’s necessary to check that every element has been implemented properly. Here’s a quick overview of what you should be inspecting:

  • Walls and ceilings – is plasterwork smooth and even, with neat finishing around sockets and pipes?
  • External brickwork – is it consistent in colour and placement, and free of chips and excess mortar?
  • Windows – is all glazing free of cracks, opening and closing properly with intact weather seals?
  • Doors – do all doors fit correctly within their frames, with working handles, hinges, locks, and bolts?
  • Floors – are all floors level and secured, with draught insulation and neatly finished skirting boards?
  • Staircases – do all stairs have level and stable treads, with secured balustrades and handrails?
  • Plumbing – do all taps, toilets, showers, washing machines etc work with a satisfactory water flow?
  • Heating – are boilers and radiators fitted safely, insulated appropriately, and working without leaks?
  • Electrics – are electrical outlets, fuse boxes, smoke alarms, and phone lines installed correctly?
  • Lighting – is there adequate lighting in all rooms, with uniformly fitted switches that all work?
  • Appliances – are any supplied appliances fitted and connected properly, with instruction manuals?
  • Fixtures and fittings – are sockets, faucets, kitchen units, curtains, carpets etc in good condition?
  • Paintwork – is every painted surface primed and finished evenly, with no splashes or exposed areas?
  • Pipework – are drains, downpipes, and gutters connected securely without leaks or blockages?
  • Roofs – is the roof sealed, insulated, and ventilated with secure flashing and no damaged tiles?
  • Gardens – if there is a garden, is the area free of construction debris and adequately landscaped?
  • Drives and pathways – are driveways and paths laid evenly with suitable gradients and materials?
  • Fences and gates – are the property boundaries completed with secure walls, fences, or gates?

Of course, this list is not exhaustive – and without prior experience in this area, you may not know what correct fittings should look like, or when a defect is minor and superficial or something serious.

How a structural warranty can help with snagging

As we’ve mentioned throughout, the easiest way to protect your financial investment in your new build house is to secure a structural warranty as early as possible. When you take out such a policy with a specialist provider like Architects Certificate, the key stage inspections can negate the need to carry out a separate snagging survey. Any problems will already be flagged in the regular reports.

Of course, you have the option of hiring a dedicated snagging surveyor, but this generates another bill, while you could take advantage of the reports included in the warranty you’re already paying for if you really wanted to create a new build snagging list. Additionally, you’d have to negotiate with the developer about snags yourself, whereas structural warranty claims give you some reassurance.

Do you think you could benefit from a new build structural warranty to help protect you against snags? Fill out our quick quote form online to receive your no-obligation quotation today, or contact our team with any enquiries by emailing info@architectscertificate.co.uk or calling 0161 928 8804.

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Published Date: 11th May 2022
Category: building warranty, Home warranty, structural warranty


 

11 
Mar

What’s the difference between a building warranty and home insurance?

home insurance building warranty

Both building warranties and home insurance protect the owner’s bank account against costly repairs, but what’s the difference in their coverage? Do you really need both at the same time?

It’s understandable to want to save money by only buying the best insurance product, but you won’t be covering all the bases if you choose one over the other. Let’s look into what these policies are and why investing in both a building warranty and home insurance offers the best financial protection.

What is a building warranty?

A building warranty, structural warranty, or home warranty is a type of insurance policy taken out on a new build. The developer or builder responsible for the project usually sets up the warranty before construction starts, then transfers the policy to the new owner when they buy the property.

This is also known as latent defects insurance, because it protects the policyholder against latent structural defects. In the several years after the build is completed and settles, problems with the structure might develop, caused by defective design, materials, or workmanship during construction.

The structural warranty should cover the expense of repairs or replacement materials, giving the property owner peace of mind that they won’t be out of pocket for a problem that wasn’t their fault. These warranties can apply to new build homes, commercial properties, self-builds, and more.

What is home insurance?

Whereas the property developer is initially responsible for a building warranty, it’s the responsibility of the buyer to ensure they have personal insurance for their new residence or business insurance for their new premises. Home insurance covers your property against other types of damage to the building and your belongings, which the latent defects warranty doesn’t as a structure-only policy.

This includes events like vandalism and theft, fire and smoke, and weather damage (e.g. flooding from heavy rain or falling trees from high winds). You can purchase separate policies for building insurance (applying to the building itself) or contents insurance (applying to your possessions only), or opt for an inclusive home insurance policy that rolls both types of coverage into one contract.

Home insurance may also cover you for legal expenses in the case of a third-party injury claim on your property. Standard coverage will normally exclude circumstances like extreme natural disasters.

Why do I need a structural warranty if I have home insurance?

As you can see, these insurance types cover different risks, so you’ll be leaving yourself open to more liabilities if you only have one of them and not the other. If you would prefer full protection for damage to the structure, the building as a whole, and everything inside it, then you’ll need both.

If that isn’t reason enough, financial lenders will also expect you to have a structural warranty and home insurance set up before you apply for a mortgage. Since they’ll be paying for part of the property upfront, mortgage providers are unlikely to take the risk on an unprotected investment.

If you’re in need of a structural warranty for any type of building project, why not contact Architects Certificate to get a no-obligation quote? We may not provide home insurance here, but we do offer bespoke building warranties, so call us on 01619 288 804 or email info@architectscertificate.co.uk.

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Published Date: 11th March 2022
Category: ABC+ warranty, building warranty, Home warranty, structural warranty


 

18 
Feb

Why would you need a self-build structural warranty?

why you need a self build structural warranty

It may be easier to simply buy a new-build property, but many people dream of designing their own home. Self-build projects take a lot of time, effort, and money, but the reward of a totally customised residence is often worth it.

However, it’s crucial to ensure that such a big investment has the right financial protections in place from the start – including building site insurance and a structural warranty.

If you’re not sure whether a self-build structural warranty is necessary, or you don’t understand the difference between this policy and self-build site insurance, then this article is for you.

Read on to learn more about why both policies are essential for any successful and long-lasting self-build home.

What is a self-build structural warranty?

Just as a standard structural warranty protects a building development during construction, and for a further ten years after completion of the project, the same applies for a self-build warranty.

The only difference is that rather than a developer or builder taking out the policy and passing it on to the eventual buyer, you would take out the warranty yourself as the builder of your own home.

Whether you participate in the design and construction or hire contractors to handle everything on your behalf, you’d still take the position and responsibility that a developer would.

When you take out a self-build structural warranty, the provider will carry out regular inspections throughout the building process, ensuring that any structural problems are caught and fixed as early as possible.

After your self-build home is completed and signed off, the ten year structural warranty will kick in from the date on the completion certificate. You’ll then have the assurance that you won’t be out of pocket if any latent structural defects show up over the next several years.

The contractors are directly responsible for the first two years, then the warranty provider will handle claims for the remainder.

A thorough structural warranty should cover defects due to poor design or workmanship and faulty materials or components.

This isn’t the same as home insurance, which you’ll need to arrange when you move in to protect your self-build from theft and accidental damage – which the warranty doesn’t cover.

Why would I need a self-build warranty?

So, why is it so important to get a self-build warranty before starting to build your own home? Here are five reasons to secure a structural warranty as early as possible in the self-build process:

1) Quality control – even if you have experience as a project manager, it always helps to get another pair of expert eyes and an impartial opinion on the proceedings.

2) Holding contractors liable – you can’t just rely on the contractor’s insurance, as it’s designed to protect them and not you, whereas your own warranty protects your investment.

3) Peace of mind – the last thing you want is an expensive and time-consuming legal battle if a fault occurs, but the warranty allows you to claim repair costs without litigation.

4) Raising finance – if you’re taking out a loan to fund your project, the bank is likely to require adequate insurance before offering you a mortgage.

5) Selling your home – in the event you end up selling your self-build within ten years, a buyer will also want a warranty for their own mortgage and peace of mind.

One of the biggest issues is funding the project. Unless you already have the money to pay for your self-build upfront, you’ll probably need a stage payment loan – which you’ll find hard to get without a structural warranty.

Even if you do pay for everything yourself, you’ll want a structural warranty in case latent defects develop, so you’re not left to foot the bill for repairs or replacements as well.

To clarify, a structural warranty is also not the same as buildings insurance, which is a type of home insurance alongside contents insurance. You’ll only need those once the building is complete and you’ve moved in, as these policies have different coverage that doesn’t include structural defects.

Do I need self-build site insurance as well?

Whether you do the work yourself or appoint a contractor or builder to do it for you, you must have the right site insurance for the project. Of course, any third parties need their own insurance policies, but you can’t rely on those to protect you financially.

You should secure site insurance as soon as you purchase a plot of land for the self-build, ahead of getting your structural warranty before construction actually begins.

As the owner and overseer of the site and project, you’ll need employers’ liability insurance to cover accidents and injuries for any workers you employ. This is the only type of site insurance that’s actually compulsory by law.

However, it’s a good idea to have policies that cover these things, too:

  • Public liability – in case a member of the public experiences an accident/injury on your site
  • Contract works – if you have to repair or replace property or tools due to damage or theft

Depending on the extent of your contract works insurance, you might need specific cover for the tools being used and stored on your self-build site. This could be owned plant or hired-in plant, plus any other materials insurance.

You’ll need self-build insurance for your building site from the start of construction to completion – though you may be able to extend the cover if the project overruns.

Just as most lenders require the reassurance of a structural warranty for any new build property, they’ll also require you to have the proper self-build site insurance throughout construction. Banks won’t just accept your contractor’s warranty – you’ll need your own cover to secure a mortgage.

How can I get a self-build warranty?

While you’ll be more focused on setting up self-build site insurance at the start, you should apply for a self-build structural warranty a few weeks before construction is due to begin. This is because your warranty provider needs to carry out regular inspections throughout the duration of the build.

The site insurance will cover your structure, equipment, workers, and public liability until the self-build is complete, for the period agreed upon with the provider. The structural warranty will then cover your new home against latent structural defects for the next ten years from completion.

Here at Architects Certificate, we’re proud to offer a widely accepted ten year structural warranty for a variety of property types. Our ABC+ Warranty can also apply to self-build homes, so don’t hesitate to get in touch for a quote if you’re searching for a self-build structural warranty provider.

If you’d like to discuss your project specifications with our team and find out more about the self-build cover we offer, please call us on 0161 928 8804 or email info@architectscertificate.co.uk.

We’ll be happy to guide you through the process of applying for a self-build structural warranty.

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Published Date: 18th February 2022
Category: ABC+ warranty, Contractors all risk insurance, Home warranty, self building first time buyers, structural warranty


 

03 
Feb

A comprehensive guide to new build warranties

new build structural warranties

Buying a property is an exciting process, especially if it’s going to be your family’s ‘forever’ home. However, to prevent your dream from becoming a financial nightmare down the line, your home will need a structural warranty. Even new builds aren’t exempt from the risks of structural defects.

If you’re planning to buy a new build home, and researching the warranties it should have, then you’ve come to the right place. This blog explains everything you’ll need to know about new build properties and structural warranties, so you can protect your investment for the next 10 years.

What is a new build house?

A ‘new build’ is a new building which has been constructed within the previous two years and has never been lived in. Some new build properties may have been rented or owned once before, but the term usually refers to a brand new house or flat that a developer is selling for the first time.

New builds are extremely popular among first-time homebuyers, because they can get an equity loan from the government through the Help to Buy Scheme. New build homes often come with fittings and fixtures like carpets and white goods, but these depend on the particular developer.

There is also the benefit of newer constructions following the latest standards and regulations, meaning that new builds tend to be more energy efficient. The sales process is often faster, too – unless you’re buying off-plan, in which case construction work might not even have started yet.

Every new build purchase should include a new build structural warranty. This should protect you financially if you find any structural defects within the first 10 years after completion. However, if you carry out any major refurbishments during this period, you may need to get a new warranty.

What is a new build warranty?

This type of new home warranty is a 10-year structural warranty taken out by the developer or builder. The policy is designed to protect the buyer of the new build against the cost of repairing structural defects from faults in the design, materials, workmanship, installation, or construction.

A new build home is likely to have fewer problems than an older building, but this doesn’t mean that latent structural issues are impossible. When buying a new build, you should always review the structural warranty before completing the sale. While it’s not a legal requirement, it gives buyers peace of mind, and most mortgage lenders will also expect there to be a valid warranty in place.

What does a new build warranty cover?

When you buy a property off-plan, the builder or developer should already have a structural warranty in place. Once you exchange contracts, this warranty should protect your deposit – so you can get still that money back if the company goes insolvent before completing the construction.

After the building is complete, the 10-year warranty is split into different insurance periods. The first 2 years are the defects insurance period, during which the builder or developer will be responsible for fixing structural defects. For example, they’d be obligated to fix faulty pipes or window seals.

From the third year onwards, the warranty only holds the developer or builder responsible for major structural problems. This is the structural insurance period, which covers issues with foundations, roofs, chimneys, ceilings, and floors. Smaller defects relating to fixtures and fittings will now be the homeowner’s responsibility to fix. Make sure you’re aware of the date that this period takes effect.

Different providers and warranties may include different conditions, so it’s important to read the policy information thoroughly before finalising a sale. You should be completely clear on what the policy does and doesn’t cover, and discuss anything extra you think it should include with the seller.

What doesn’t a new build warranty cover?

Usually, a new build warranty will not cover damage due to weather or natural wear and tear over time. This type of policy also won’t pay out for damage resulting from lack of adequate maintenance on the homeowner’s part. For issues like condensation and damp, the warranty will only cover them if they result from the builder or developer failing to comply with the conditions of the warranty.

Be sure to check the small print carefully to understand everything that’s included and excluded. Don’t be afraid to question something that doesn’t seem right. It’s always a good idea to have a ‘snagging list’ provision in there to ensure they’ll take care of any smaller defects after completion before you move in. A snag could be anything that looks poorly fitted, unfinished, or damaged.

Do new build warranties affect mortgage applications?

Yes, structural warranties can affect mortgage applications. The majority of lenders will require a structural warranty for a new build home to protect the funds they’re investing into the property.

The qualifying definition of a new build might vary slightly from one lender to another, so check this with the mortgage provider before applying. The mortgage process is generally the same regardless of whether the property is a new build or previously owned, but the loan amount might be lower.

This is because banks tend to tier the loan-to-value ratio (LTV) for new builds to protect themselves against the property’s gradual devaluation. If you buy off-plan, the mortgage valuation will depend on the building specifications, and the mortgage offer may expire during construction – so don’t apply too early in the process, or request an extension if the offer won’t last longer than 6 months.

What happens if you discover a structural defect?

If you notice signs of a structural defect within two years of completion, you should contact the builder or developer. Keep a record of the times, dates, and topics of your communications until they rectify the problem. If they refuse to uphold their obligations for any reason, contact the warranty provider.

Once the defects insurance period expires after two years from the date on the completion certificate, you can no longer contact the developer or builder about a structural problem. During the structural insurance period from years 3 to 10, you’ll have to get in touch with the warranty provider directly.

If you need to make a claim on your new build warranty, check the defects specified in the policy document and the excess you’ll have to pay first. The warranty provider can also tell you whether the policy covers your particular structural issue or not if you contact them to request more details.

What happens to the warranty if you move house?

A structural warranty stays with the property. This means that if you end up moving out and selling the property during those 10 years after its completion, then the warranty will transfer to whoever purchases it from you. The insurance period still applies from completion of the build, so it won’t refresh for the new buyer. If you don’t sell until more than 10 years later, the warranty will expire.

However, if you carry out any renovations during that time, the original warranty may no longer be valid. Refurbishments that affect the structure, such as loft conversions, extensions, or knocking through walls, will require upgrading to a new structural warranty if you still want that cover. Any company guarantees for this type of work won’t transfer, so an updated structural warranty is best.

How is a new build warranty different from home insurance?

A new build structural warranty isn’t the same as home insurance, and the two policy types don’t cover the same things. This is why it’s essential to have both, ensuring your property has the highest level of protection possible. The structural warranty only covers the integrity of the main structure, and defects that the original contractors are responsible for (e.g. architects, builders, developers).

Home insurance is a separate type of insurance that can cover property damage due to fire, floods, or accidents, which the structural warranty doesn’t. Specifically, building insurance protects the property itself, while contents insurance protects your possessions in the event of damage or theft. Neither type of home insurance will cover issues relating to defective construction or materials.

Some banks or building societies will also expect you to have home insurance before accepting a mortgage application. You’ll only need building insurance, as the bank is investing in the building and not your belongings. It’s fine to wait to get contents insurance until you actually move in.

Looking for a new build warranty?

Here at Architects Certificate, we offer our ABC+ Structural Warranty for a range of property types. Whether you need a new build warranty as a seller, a build-to-rent warranty as a developer, or a self-build warranty for your own design, we can help. We can even assist with a complete house warranty if you need to secure a structural warranty after the construction is already complete.

Simply contact us by calling 0161 928 8804 or emailing info@architectscertificate.co.uk to discuss your structural warranty requirements. Alternatively, fill out our quotation request form to receive a quick quote for your building project. You can find out more about our policies by browsing our dedicated policy pages, including the list of approved lenders who accept our structural warranties.

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Published Date: 3rd February 2022
Category: Home warranty, New Home Warranty Insurance, structural warranty


 

31 
Jan

Can you get a retrospective warranty for a completed house?

completed house structural warranty

Whichever type of property your development may be, structural warranties are essential if you want to protect your investment. It’s best to have such a warranty in place before construction even begins, but here at Architects Certificate, we know that isn’t always possible.

This leaves many homebuyers wondering: can you get a retrospective structural warranty after completion? If construction has already finished and you’re looking for the answer to this question yourself, have a read through our completed house warranty blog below.

Is a retrospective PCC the same thing as a structural warranty?

Though you may have heard of a retrospective Professional Consultants Certificate (PCC), these aren’t the same thing as a retrospective structural warranty. If you want a higher level of financial protection, you should opt for a 10-year structural warranty rather than a 6-year PCC.

Not only does a PCC have a shorter period of cover, but it also doesn’t guarantee compensation in the event of a structural defect. You’ll have to go to court and prove that the builder, developer, or architect is at fault. However, a structural defects warranty allows you to make a direct claim.

You can have both a PCC and a structural warranty at the same time, with concurrent periods of cover, but this isn’t really necessary. If you want to save money upfront, a PCC will be cheaper – and you can always apply to upgrade it to a structural warranty later if you want further coverage.

How is a completed house warranty different?

A completed house warranty is more of a generic term that can apply to either a retrospective PCC or a retrospective structural defects warranty. It depends on the type of cover that you choose to apply for. In any case, the same legal limitations apply to both types of architects’ certificate.

The issue with leaving your application until after the building is already finished is that the warranty provider won’t be able to carry out progressive inspections throughout the duration of the build. There will normally be at least six inspections from the start of the project to completion.

If it’s only possible to perform one post-completion survey, and the surveyor finds any structural problems at this stage, it may be too late to address them – at least not without even more work and increasing expenses. They cannot issue a completed house warranty if it fails this survey.

How does a completed property warranty work?

The limitation of a post-completion warranty is that the Council of Mortgage Lenders (CML), now UK Finance, only allow providers to issue these warranties retrospectively if the contract doesn’t vary from the original CML-prescribed terms.

This means you cannot change the wording, so the level of liability won’t change, either. The warranty will exist and be enforceable as though the property was inspected from the very start, holding the contracted parties liable from the outset.

Since a full building condition survey after completion must be much more intensive, and the provider is accepting a higher degree of risk, a retrospective warranty will also come with higher costs than if you engaged their services at the beginning or even partway through.

If your completed house fails to comply with the required technical standards, you won’t be able to get a warranty. Even if the property passes the inspection well, your contract will apply from the actual date of completion, not the later date when the certificate is issued.

In summary, a completed house warranty will apply in exactly the same way as an original PCC or structural defects warranty would. For this reason, it’s not actually possible to get a retrospective architects’ certificate that applies from a date beyond the building completion.

Get a quote for a completed house warranty today

Now you know all about structural warranties for completed houses, why not contact us to request a completed house warranty quote? As providers of Professional Consultants’ Certificates and structural warranties for all types of properties, the Architects Certificate team could help you.

Whether you just want the peace of mind that your home is as financially protected as possible, or you’re completing home renovations and need a new warranty, we can supply transferable certificates for eligible properties. Call 0161 928 8804 or email info@architectscertificate.co.uk for more details.

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Published Date: 31st January 2022
Category: ABC+ warranty, building warranty, Home warranty, retrospective certificate, structural warranty


 

11 
Jul

Professional Consultants Certificate Ltd sponsor local charity ball

On Friday 24th June we were delighted to support the Bowdon prep School Ball raising money for a local charity CAFT (The Children’s Adventure Farm Trust) who organise special events and holidays for disabled and disadvantaged children.

A fabulous time was had by all from the celebrity compare Mike Toolan, Can Can Girls, Accordionist Yvette and the infamous ‘Chamber Choir’ presented by Mrs Patterson.

The event raised in excess of £16,000.

Professional Consultant Certificate Ltd offer home warranties for new and converted properties

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Published Date: 11th July 2016
Category: architects certificate news, Home warranty, Professional Consultants certificates


 

22 
Jun

Cheaper alternative to NHBC 10 Year home warranty

Need a cheaper Home Warranty than NHBC offer?

Architectscertificates.co.uk have been supplying 6,10 and 12 year cover for new homes since 1989. They are often over 50% cheaper than NHBC. Please get a quote today.

certificateplusnavytrans

 

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Published Date: 22nd June 2016
Category: Cheaper than NHBC, Home warranty


 

16 
May

Can you get a mortgage on the house you are building?

self build

Securing a mortgage for a new build house can sometimes be difficult, especially if the developer is still constructing the property. If you’re only a buyer and not a builder, the person or company in charge of the construction project should already have a 10 Year Structural Warranty in place.

As the buyer, this policy will protect you against the builder going out of business during the build, then pass onto you when the new build is complete. This will then provide financial security against latent structural defects for the next 10 years. If the developer doesn’t have one of these policies, or you buy after completion, the alternative option is a 6 Year Professional Consultants Certificate.

Since getting a mortgage involves a financial institution taking the risk of investing in your property purchase, most banks and building societies will expect there to be some kind of official guarantee that the new build is structurally sound and in compliance with building and safety regulations.

This is why it’s often worth ‘shopping around’ for a suitable home structural warranty, especially for small builders and self-builders. While NHBC is one of the best-known providers, it’s not always the most affordable or the best deal. So, if you’re looking for an alternative UK Finance-approved policy, to help you get a mortgage for the home you’re building, why not consider our ABC+ Warranty?

Can you get a mortgage to build a house?

Yes, you can. Unless you’re able to finance the build yourself from your savings, selling assets, or another type of loan from your family or the government, then it’s likely you’ll need to apply for a self-build mortgage. Standard residential mortgages usually apply to completed new builds, with the money released in a lump sum at the end, whereas the process for a self-build is very different.

Whether you’re in the planning stages after buying a plot of land to build a house on, or you’re converting or renovating an existing structure like a barn, there’s sure to be a structural warranty that suits your situation – which will then help you to secure funding in the form of a mortgage.

If you’re a first-time builder or buyer, banks and other lenders may be cautious and reduce the amount you can borrow. Since self-build mortgages tend to be released in stage payments to help you finance each step of the project, you need to be in the best possible position financially to get the most from the lender – including having the protection of a structural warranty and good credit.

There are different types of self-builds, depending on the level of involvement you have in the actual construction. For example, you could design the home and participate in building it, or design it all then hire a contractor to do the construction work – or even buy a partially-finished property from a developer and complete the build yourself. The way you do it will affect your mortgage eligibility.

The best approach is to work with a qualified builder or general contractor who has the provable experience and qualifications, plus the correct insurance. It’s difficult to completely DIY a self-build house if you aren’t an experienced builder yourself, as you’ll need the proper licenses and insurance.

Can you get a mortgage to buy land?

Yes, it’s possible to apply for a self-build mortgage in order to first purchase the plot you want to build on. If you don’t have the money to purchase land upfront, it may be better to get a separate loan known as a land mortgage or land loan. This is because the amount you can borrow to pay for the land can be higher than the amount you can borrow to pay for the construction of the house.

For example, you may be able to borrow up to 75% of the land value, but only around 60% of the building value (in the case of a self-build, this value is estimated from the plans). Of course, you’ll need to have your designs drawn up and secure planning permissions from the local authority before submitting your self-build mortgage file – the application won’t succeed without them.

Having two separate mortgage loans for the land and the house itself can make things complicated, and may increase your costs, but it’s still manageable if you take good control of your finances and manage your resources in a realistic way. The down payment for a land mortgage may be around 15%-25%, while the deposit for the actual self-build mortgage may be higher (between 25%-40%).

How do construction loans work?

A construction loan is simply another name for a self-build mortgage – because you’re borrowing the money to build the house rather than purchase a completed structure. Just as there should have been a new build structural warranty in place from the start when you purchase the home from a developer, so should there be a self-build structural warranty in place before you start construction.

If a bank agrees to lend you money for a self-build, you can receive a lump sum mortgage payment in arrears after funding everything yourself or in gradual advance payments. Obviously, most self-builders prefer to receive stage payments throughout the build to fund each stage of construction work, rather than paying out of pocket then using the mortgage payment like a reimbursement.

You can find out more about self-build mortgage stage payments in our dedicated guide. One of the risks of this type of loan is that your project can easily go over budget if you don’t plan carefully, and the mortgage offer may have a time limit (for example, giving you one year to complete the build). The interest payments are also likely to be higher than they would for a typical residential mortgage.

On the plus side, self-build stage payments are an extremely useful way to keep the project on track, and having a self-build structural warranty ensures that the bank should sign off on each stage payment. Your structural warranty provider, such as ourselves, should send a chartered surveyor to carry out regular professional inspections and check on progress and legal compliance.

These loans are sometimes also known as construction-to-permanent loans, because the stage payment loan can be converted into a normal residential mortgage once the building is complete, at which point you’ll begin making your self-build mortgage repayments according to the contract. You’ll typically only be paying interest on the mortgage loan throughout the duration of the build.

Which structural warranty do you need for a self-build mortgage?

As we’ve discussed so far, a specialised self-build mortgage usually requires an equally specialised self-build warranty. Here at Architects Certificate, we provide a range of UK Finance-approved 10 Year Structural Warranties, which are accepted by more than fifty approved lenders in the UK.

No one can answer the question of whether it’s better to buy or build a house for you – that’s something you need to decide for yourself. Your chances of mortgage approval and the processes involved in building and buying can vary according to your individual circumstances, so it really is up to you. Whichever route you choose, we can provide a suitable structural warranty for your home.

For more information on the UK Finance certificates and warranties we supply (previously known as CML architects’ certificates), please give our team a call on 0161 928 8804 or send an email to info@architectscertificate.co.uk. We’ll be happy to provide assistance and offer a tailored quote.

This article was updated on 04/03/2022.

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Published Date: 16th May 2016
Category: ABC+ warranty, Cheaper than NHBC, CML, Home warranty, New Home Warranty Insurance, Professional Consultants certificates, self building first time buyers, structural warranty


 

 

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