Home Warranties Explained – what does your warranty cover?
Carol Brady
Unlike purchasing a second-hand home, most newly built homes come with warranty and insurance protection which usually lasts for ten years. There are a number of different warranty providers. NHBC, LABC Warranty, Premier Guarantee and Checkmate between them cover approximately 95% of all new homes built in the UK and they are all members of the Consumer Code for Home Builders.
All policies differ, but what our warranty bodies have in common is that they offer comprehensive cover against major structural defects to protect home buyers and will usually include*:
- Two years’ builder warranty against defects
- Further eight years’ structural insurance
- Contaminated land cover
- Deposit protection if your builder becomes insolvent
*Terms and conditions apply. Although all Code member warranty bodies provide this cover, some other providers may not – please check your individual policy.
Common issues with new homes
There a number of issues that can arise with newly built houses, with drying out and condensation being the most common. Occasionally defects are identified where some elements of a home may not have been completed to the standards required by the warranty provider. These issues should be rectified by your builder within the first two years of occupation, although you can seek support from your warranty provider if you have difficulty getting the problems rectified.
Geoff Egginton, Regional Director, NHBC explains: “Naturally, when people move into a brand new home they want it to be perfect. However, homes are complex hand-built structures that are built outdoors. They can be affected by a number of things including how often the heating is used during the first months of occupation, or what type of soil your home is built on.
“Some minor movement is to be expected as your home dries out and settles; this is perfectly natural. This, along with wear and tear to items such as kitchen cabinets or flooring are not generally covered by your home warranty. Defects, where something hasn’t been finished properly or isn’t working correctly as per the policy requirements will generally be covered by your builder in the first two years after completion.”
For more information about what to expect from your new home, take a look at the Code’s guide.
Structural defects
Home warranty and insurance policies cover the rare occasions that structural defects are found. Although each provider is different, warranties generally cover major structural elements such as foundations, roofs, ceilings, load bearing walls and stairs and glazing in outside walls. Warranties don’t cover general wear and tear, superficial damage or damage caused by storms or other adverse weather.
Craig Ross, Head of Commercial Development from LABC Warranty said: “The principal purpose of a warranty is to cover the structural integrity of your home. If, for example, you found plaster cracks which were then linked to a fault with the foundations, your warranty policy would normally cover the cost of repairing the foundations and putting right any associated defects. Similarly, leaks caused by a roof not being finished to your warranty provider’s expected standard are likely to be covered.”
How does a warranty differ from home insurance?
Home insurance is provided on the basis of likely risks to a property and can cover both the building and its contents. Almost all homes are insurable, including second-hand homes, although costs can vary significantly. New home warranties and insurance policies are only concerned with the structural integrity of your home, not its fixtures and fittings, and are usually only available for newly built or newly converted homes. Key to the strength of a warranty is the providers’ involvement in monitoring standards and proactively reducing risks of defects during the build.
Paul Cooper, Head of Checkmate, outlined the main differences: “Most mortgage lenders will require evidence of a warranty before they lend against a property. This is because warranty schemes require builders to meet stringent standards before we will cover their sites. Warranties therefore provide peace of mind both in terms of financial protection and in knowing your home has been built to a good standard.”
Why offer ten years’ of cover?
Ten years is the standard period for most warranty policies, with the first two years being defects warranty and the remaining term being structural cover. Although backed by the warranty, builders are initially responsible for putting right defects affecting new homes.
Gary Devaney, Chairman and CEO, Premier Guarantee, explained: “Most defects will be apparent within two years of construction. Builders are responsible for delivering a good quality home and most are keen to put right any issues themselves as part of providing a good service. Warranty bodies are there to step in should there be a disagreement between a homeowner and a builder during those first two years.
“Like our fellow warranty providers, we provide an additional eight years of direct cover because that allows sufficient time for sites to settle and for any less immediate structural issues to emerge. This is particularly important for issues relating to foundations which, while rare, can become apparent a few years after the ground has returned to its new natural state after building.”
Find out more
Warranty policies do differ and it’s important to understand specifically what your policy covers and what may be excluded. Talk to your solicitor for further advice or take a look at our warranty providers’ websites:
