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    • matt_heath
    • By matt_heath 6th Dec 17, 5:19 PM
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    matt_heath
    New Home Warranty requied for mortgage - thoughts?
    • #1
    • 6th Dec 17, 5:19 PM
    New Home Warranty requied for mortgage - thoughts? 6th Dec 17 at 5:19 PM
    We're buying a house that was demolished completely and rebuilt in 2012 so it's effectively a new build despite being on a street of Victorian terraces.

    We just heard from our solicitors that although the seller (who is also the builder) obtained buildings regulation approval, they do not have a New Home Warranty in place.

    When I was shown around the house, the estate agent mentioned something about a guarantee/insurance policy on account of the house being newly-built. I believe she said there was still 10 years left on a 15 year guarantee. Can't remember if it was a New Home Warranty though. But I double checked the sale contract document they sent through and it definitively has a tick for "no" under "New Home Warranty".

    Our solicitor has suggested that mortgage lenders require this cover to be in place, and that they may either "take a view" on this, or ask us to obtain retrospective cover.

    I'm a first-time buyer so a bit uncertain how to proceed here. I'm not keen on paying retrospective cover if the builder/seller chose not to do it, but also have no idea what a ballpark figure for this would be. Has anyone come across this situation before? Should I be concerned?

    Solicitor also advised to inform the surveyors and perhaps consider asking them to re-survey to ensure "the works are safe". We were really hoping to complete by the end of the year (all the other paperwork is done) and obviously don't want to rush things if it's not safe to do so, but I've not got much to go on here. Any advice very gratefully received.
Page 1
    • Katapolt
    • By Katapolt 6th Dec 17, 5:28 PM
    • 71 Posts
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    Katapolt
    • #2
    • 6th Dec 17, 5:28 PM
    • #2
    • 6th Dec 17, 5:28 PM
    In my experience working for a development company, any new build should have some form of warranty. find out who did the building control? Someone will have had to sign it off, and it may be that they offer this.

    Retroactive cover is much harder, and the companies i've dealt with (Aedis and NHBC) quote at around £5000 if they will cover at all (and that was for a month retroactive and 3 year ongoing warranty)
    FTB 2017
    Currently dealing with a Quarter Life Crisis
    • JoJo1978
    • By JoJo1978 6th Dec 17, 5:41 PM
    • 181 Posts
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    JoJo1978
    • #3
    • 6th Dec 17, 5:41 PM
    • #3
    • 6th Dec 17, 5:41 PM
    Hi. There's the NHBC warranty:
    http://www.nhbc.co.uk

    Our house that were buying had one when it went up for sale but it was out of warranty when we exchanged (it was 10 years old in Aug.) It wasn't an issue for us but we didn't need a mortgage. We discussed with the vendor whether they'd needed to exercise any parts of the warranty and were satisfied they said no. To us that meant no major issues in its life to date. We only had to satisfy ourselves not a lender though.

    We also had a surveyor who was aware of the property history and surveyed on that basis, looking for likely issues (like yours a one-off build and not part of a development) and made sure building regs at the time of build were followed. Our solicitor also made sure all the planning and building control sign off was in order.

    I don't know how much retrospective cover would be, but I would resurvey even if for your own peace of mind. Have you asked the vendor why they didn't and if you find out it's a condition of your mortgage whether will consider negotiating on price with to so you are covered if you need to purchase retrospectively?
    Hamster in the wheel (London) 1999-2017
    Mortgage free since 2015; Pension pot sorted 2017
    Second career (what TBD!) 2018
    • rosyw
    • By rosyw 6th Dec 17, 5:52 PM
    • 491 Posts
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    rosyw
    • #4
    • 6th Dec 17, 5:52 PM
    • #4
    • 6th Dec 17, 5:52 PM
    A friend of mine was in a similar position a few years ago and got around the problem with an indemnity policy,but it was tricky.

    I bought my current home from the builder, it was 99% finished and had building regs sign off, but no warranty of any description, as such it was impossible for anyone to get a mortgage on the place, luckily for me I was a cash buyer. There should have been an architects certificate issued which they couldn't get due to some minor problems, (pointing to the chimney and such like) which I knew about anyway, but insisted on all "faults" being put in writing by the architect concerned, I also got a good reduction on the price.

    Your mortgage provider might be happy with an indemnity policy, or they might refuse the mortgage altogether. Good luck!
    • eddddy
    • By eddddy 6th Dec 17, 6:07 PM
    • 5,550 Posts
    • 5,233 Thanks
    eddddy
    • #5
    • 6th Dec 17, 6:07 PM
    • #5
    • 6th Dec 17, 6:07 PM
    Here's what the Council of Mortgage Lenders say about warranties:
    https://www.cml.org.uk/consumers/buying-a-home/new-build/

    And here's each individual lender says about warranty schemes that they will accept:
    https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1913/


    Normally, a warranty has to be sorted out before building starts - because the warranty company might want to inspect foundations etc, to make sure they're done OK.

    But some companies will offer a retrospective warranty, following a structural survey.

    I would definitely expect the builder/seller to pay for the warranty (& survey). It's a standard requirement for new builds, and the builder was sloppy for not getting it sorted in advance.
    • matt_heath
    • By matt_heath 7th Dec 17, 10:53 AM
    • 5 Posts
    • 0 Thanks
    matt_heath
    • #6
    • 7th Dec 17, 10:53 AM
    • #6
    • 7th Dec 17, 10:53 AM
    Thank you all, lots of useful tips here. I've asked the solicitors to go back and find out about the mortgage lender's requirements, and will also speak to my surveyor. Hopefully the builder/seller will be able to help us dig out the paperwork too as they've done everything else by the book so far.
    • AdrianC
    • By AdrianC 7th Dec 17, 1:07 PM
    • 15,759 Posts
    • 14,055 Thanks
    AdrianC
    • #7
    • 7th Dec 17, 1:07 PM
    • #7
    • 7th Dec 17, 1:07 PM
    We're buying a house that was demolished completely and rebuilt in 2012 so it's effectively a new build despite being on a street of Victorian terraces.
    Originally posted by matt_heath
    Don't complicate matters.

    It's either...
    You're buying a house that was built in 2012 (which happens to be on the site of a demolished previous house in a road of predominately Victorian terraces).
    ...or...
    You're buying a Victorian terrace that was rebuilt five years ago.

    Which is it?

    We just heard from our solicitors that although the seller (who is also the builder) obtained buildings regulation approval, they do not have a New Home Warranty in place.
    There's nothing to say they must have, of course.

    When I was shown around the house, the estate agent mentioned something about a guarantee/insurance policy on account of the house being newly-built. I believe she said there was still 10 years left on a 15 year guarantee. Can't remember if it was a New Home Warranty though.
    Perhaps they did, perhaps they didn't. But that's irrelevant, because it's been superceded by...

    But I double checked the sale contract document they sent through and it definitively has a tick for "no" under "New Home Warranty".
    Was that the Property Information Form - TA6? If so, then you'd be exchanging on the basis that there's no warranty in place.

    Our solicitor has suggested that mortgage lenders require this cover to be in place, and that they may either "take a view" on this, or ask us to obtain retrospective cover.
    What "mortgage lenders" as a generic group "may" do is irrelevant waffle. What YOUR individual lender WILL do in your exact case is the only thing that matters.

    Are YOUR lender insisting on something? What will mollify them? Are other lenders willing to lend without?

    I'm a first-time buyer so a bit uncertain how to proceed here. I'm not keen on paying retrospective cover if the builder/seller chose not to do it, but also have no idea what a ballpark figure for this would be. Has anyone come across this situation before? Should I be concerned?
    Depends on if you can only buy it with a warranty in place, or if you feel you need a warranty.

    Solicitor also advised to inform the surveyors and perhaps consider asking them to re-survey to ensure "the works are safe".
    BR sign-off says that the local authority think it meets the legal requirements, as set out in the building regs. A warranty is just who'll pay for any niggles that arise.

    We were really hoping to complete by the end of the year (all the other paperwork is done) and obviously don't want to rush things if it's not safe to do so, but I've not got much to go on here. Any advice very gratefully received.
    Talk to your lender.
    • davidmcn
    • By davidmcn 7th Dec 17, 2:32 PM
    • 6,286 Posts
    • 6,066 Thanks
    davidmcn
    • #8
    • 7th Dec 17, 2:32 PM
    • #8
    • 7th Dec 17, 2:32 PM
    Hopefully the builder/seller will be able to help us dig out the paperwork too as they've done everything else by the book so far.
    Originally posted by matt_heath
    Does "by the book" include having a professional consultant supervise and sign off on the works? See 6.7.4 of the CML Handbook for an indication of what (some) lenders will accept instead of a warranty (and what you might want for your own peace of mind).
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