Category Archives: New Home Warranty Insurance

 

23 
May

Do I need new build home insurance to get a mortgage?

New build home insurance to get a mortgage

If you’re planning to buy, or have just bought, a new build home – congratulations! The first thing you should consider, in order to protect your investment, is new build home insurance.

Often, the builder or developer will have taken this out on your behalf. However, it’s important to ask who the provider is, and you should ask to see proof of this.

Whilst it’s not always the case that you’ll need new build home insurance in order to get a mortgage, it’s highly likely. The vast majority of lenders will want to see proof of your new build structural warranty when you apply for a mortgage.

Since they’re investing in the property, they need to protect their funds. New build home insurance will provide cover against the risk of loss or devaluation due to damage or structural defects.

In the unlikely event that you find a lender who will agree to providing you with a mortgage loan without a new build structural warranty, you’ll probably run into some issues. For example, they’ll probably only lend you a smaller percentage of the property value, and your monthly repayments will almost certainly be higher.

Which properties require new build home insurance?

A new build is a brand-new property that has never been lived in. The term usually refers to homes that have been constructed within the past two years.

Often, new build properties are purchased ‘off-plan’. This means before building work is complete, and sometimes before it’s even begun.

You should check your mortgage provider’s definition of a new build property before you apply for a loan, as there may be some exclusions mentioned.

If your builder or developer hasn’t already got a policy in place, it’s a good idea to avoid applying for your new build structural warranty too early. This is especially the case if you’re buying off-plan. Your mortgage valuation will often have a time limit, and will depend upon building specifications, which you may not have if construction isn’t complete yet.

Why do I need new build home insurance?

New build home insurance is not a legal requirement, but as we’ve mentioned, you’ll struggle to get a mortgage without a policy in place. It will also cover you in the event of floods, fires, subsidence, or even a car crashing into your home. So, it’s definitely worth considering even if you don’t need a mortgage loan.

It’s important to ensure that your policy is in place from when you exchange contracts, not just when you move in.  

Speak to an expert today

Architects Certificate provide 10-year new build structural warranties, meaning you can enjoy peace of mind when using your new property.

If you have any questions about our new build home insurance, get in touch. You can take out a policy with us as a builder, developer, or new homeowner.

Either give us a call on 0161 928 8804 or send us a message with your enquiry and we’ll get back to you shortly.

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Published Date: 23rd May 2022
Category: New Home Warranty Insurance


 

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


 

08 
Jun

Home Warranty – do I need one?

Home Warranty’s are important when you are buying or building a brand new home. Mortgage and lending companies need to understand the home they are lending on has been built correctly and they are minimising any risk of the home not being ‘fit for purpose’.

300dpi300x250bannerbuildingwarrantyCompanies such as architectscertificates.co.uk offer home warranties as well as professional consultants certificates which are Council of Mortgage Lender (CML) approved, these are a good and often much cheaper alternative to those offered by companies such as NHBC.

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Published Date: 8th June 2016
Category: New Home Warranty Insurance
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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


 

28 
Jan

Residential Real Estate Development in Manchester Tops Pre-Recession Days

manchester

Come to Manchester for residential real estate opportunities!

The number of properties currently under construction are at their highest levels since 2008. The Annual Crane Survey by Deloitte Real Estate indicates a clear agenda of development and growth for the Northern and City Centre areas. They are also indications that 2016 will be the busiest building period since prior to the recession. Active residential developers in and around Manchester include Beech Properties, De Trafford Estates, English Cities Fund, Lend Lease, Pinnacle MC Global, Renaker and the Select Property Group.

Here at PCC Ltd we advise for and provide warranty for all residential development and look forward to a very busy 2016.

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Published Date: 28th January 2016
Category: building warranty, New Home Warranty Insurance
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10 
Jun

NHBC recruitment drive

NHBC is embarking on its biggest recruitment drive in 30 years with some 100 new technical jobs being created.
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NHBC is saying that new home registrations in the UK for 2013 were up 28% compared to the previous year, with what it called “signs of a broad based recovery in many different regions and the highest new house-building volumes in London for a generation”.

As part of its campaign, the NHBC say ” It will be recruiting 80 new building inspectors with new management roles also being created. More surveyors, engineers and special project managers will also be recruited to ensure that the appropriate technical support is available for builders and their design teams, both on site and during the design stage”.

Here at Professional Consultants Certificate Ltd, the UK’s leading provider of new home certification, we are expanding to meet the upsurge in house building. We currently have 22 regional surveyors with the best professional qualifications; we have recruited from Chartered surveyors, engineers and architects all of which comply to the Council of Mortgage Lenders criteria. Whether its a warranty or a certificate we can help, we can even step in at a very late stage in the construction, which is something the NHBC refuse to do.

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Published Date: 10th June 2014
Category: architects certificates, building warranty, New Home Warranty Insurance


 

11 
May

Professional Consultants Certificate Ltd achieve Financial Conduct Authority Compliance

d82e9233-af8d-4cfc-b602-e58b846c371bOur insurance and warranty services are checked for compliance with Financial Conduct Authority standards.

Professional Consultants Certificate Ltd are now able to offer all insurance services to the builder, self-builder and developer. Ten year warranty, specialist insurance for say flat roofs or basements, site insurance, contractors all risks insurance and a range of liability insurances are now accessible from us direct. From self-builders embarking upon their first property development up to large property development companies all can now look to us for advice and competitive quotes for all their building insurance needs.

Professional Consultants Certificate Ltd is now an Appointed Representative of Momentum Broker Solutions Ltd. Momentum Broker Solutions Ltd are regulated by the Financial Conduct Authority FCA.

Professional Consultants Certificate Ltd are the one-stop shop for warranty, insurance and building monitoring.

Phone us now for a quote 08456800467

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Published Date: 11th May 2014
Category: building warranty, New Home Warranty Insurance, warranty enquiries
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