New build without NHBC or Architects Certificate [FTB]

Toilet-Duck

Hi,

Just wondering if anyone can suggest anything as I'm in a bit of a pickle and I'm a first time buyer so have no clue!

In the process of purchasing a new build property (never lived in), after making an offer on a new build 12 months ago it was declined and sold to another buyer. I couldn't find another similiar one that I liked so decided to continue to save on my deposit instead.

Roll on 12 months and I noticied that the house came back on the market (has fallen through twice previously), I was advised by the EA that the property would not include a NHBC 10 year warranty, I was ok with this and made a lower offer, this was accepted.

Went through the full mortgage application process and was approved (yay).

The survey was completed (I chose the most in depth survey due to no warranty), received a call from the surveyor but it wasn't good news, I was advised that the surveyor would be declining the mortgage due to having no NHBC or architecture certificate issued.

This has been queried with the seller however apparently the architecture died when the property was in the process of being built and no certificate was issued on completion.

The property has been fully signed off by the council and building regs but it holds no NHBC or Architects Certificate.

Does this mean that the property is unsellable unless its a cash buyer?

I've queried this and the seller is willing to provide full indemnity insurance but I'm unsure if the mortgage company would accept this (waiting to hear back).

Also where would I stand if I then decided to sell the property say 5 years down the line, would I have a hard time selling?

Never thought buying would be so stressful, although I love the property and feel its just the right size / price for myself.

Thanks for any advice

eddddy

A new build without a 10 year structural warranty is very unlikely to be mortgageable.

Subsequent buyers may also be unable to get mortgages until the property is 10 years old.

Here are details of warranties that mortgage lenders accept:
https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1913/

Normally, a warranty provider wants to inspect the property as it's being built (e.g. check that foundations are correct etc), but some companies will issue a warranty retrospectively, after the house is built.

But that's something for the builder to deal with, not the buyer. (Maybe the builder has tried this route, and failed.)

PasturesNew

Yes, as it stands, this house is only available to cash buyers. Once it's 10 years old any NHBC or Architect Certificate would have been out of date anyway, so then it becomes less relevant/irrelevant and could be mortgaged.

I feel you were stiffed by the EA as they knew your position and still encouraged you to pursue it. He's wasted his client's time and got their hopes up too ....

missile

I am sure other posters will be correct, but I would wait back to hear confirmation from your mortgage provider. Might be worth seeking advice from a mortgage broker.

In my experience NHBC certificate is very useful ........... as toilet paper.

Doozergirl

You can buy a structural warranty after the build.

It's more expensive than buying one beforehand, but self-builders do it if they find they unexpectedly have to sell.

I don't think indemntiy policies are acceptable to lenders because I doubt indemnity policies are a suitable replacement for warranties... otherwise we'd all buy indemnity policies, given the effectiveness of warranties and the huge price differential between them and indemnity policies.

ACG

Not to kick you whilst you are down, but how did your application get submitted? One of the questions is when was the property built, if in the last 10 years you are asked if it comes with a warranty - there should have been no reason to submit an application and incur costs.

However, there are warranties which can be bought - my concern would by why the developer having had 2 applicants pull out has not gone and got one. An example would be global home warranties, I have seen them do a few which are accepted by many lenders.

In its current state, you are unlikely to get a Mortgage at anything like normal rates. The developer will need to get a warranty. If that can be obtained then assuming the lender accepts the warranty you should be able to get the application updated and offered all being well.

Warrantyexperts

Structural warranty cover as an equivalent to NHBC is available on properties prior to construction, during construction and after construction up to 10 years beyond completion. Be careful though because there are differing policies with various terms and conditions hidden within the policies, such as inner limits and exclusions of things like underground seepage.


Seek the advice of a specialist warranty broker who knows the market and can find you the most appropriate warranty for the property you have and ensure it complies with the CML (or UK Finance) requirements. Happy to help if you need a name!

Annajee

hi, I am first time buyer and applied through a mortgage broker. Property is a new build and I got informed Friday evening that the bank has rejected the full mortgage application (after agreeing in principle) because of 'unusual building guarantee'. I am going to talk to the mortgage broker to understand the details. Just wanted to check whether there are suggestions on what that 'unusual building guarantee' could mean and whether it is common with new builds.
If this bank doesn't change it's position then is there a way to get the one-off valuation fee refunded as the rejected application has nothing do with my job/ financial stability.
I am already waiting to get the 10 yr structural warrantee from sellers solicitors but if this has been the reason bank has rejected then I would expect the bank to state that as a pre-requisite for mortgage application. 

Slithery

Please start your own thread.