looking to buy a 7 year old house but it has no NHBC

leni

Hi, looking for some advice please.  We've seen a house today but the brochure mentions is has no NHBC or Architect certificate.  Upon doing some digging, it seems the building firm went into liquidation not long after or at the time the house was completed.  4 plots remained the property of the business and it seems 1 was and remained unfinished, 1 was sold in 2019 tosealed bids with no NHBC, one is being lived in but no idea if so or rented and the one we are interested in which has been up for rent few times so I assume has been lived in at some point.  The business liquidation seems to have finally been completed mid 2020.  So I have 2 questions as we could technically raise the £220k asking price is ..
Would you apply for retrospective warranty under these circumstances? 3 years remaining - obviously we would have a full survey carried out.
Or after a full survey, would you would you consider buying without one?  

We have a few options for finance....
Re mortgage our current home (owned outright) and use savings to meet the shortfall; letting our current home for a few years until we can get a mortgage in 3 years on the property we are currently looking to buy without the NHBC being needed
Sell our current home and use savings for the shortfall until a mortgage can be gained as above (3 years but no need to rent our current home)
Try and get a warranty and take out a mortgage of the second property - rent out our current property.  Use our savings as a deposit.

Thanks - hope I make sense.

ProDave

The main thing did it have a BUILDING CONTROL completion certificate?

If you do some research you will find it is nigh on impossible to claim from nhbc for any defect in any event.  It seems to be a paperwork exercise to satisfy lenders with no tangible practical benefit.  If your lender is happy I would have no hesitation.

Once it gets to 10 years it is irellevant any way so as long as you keep it 3 years it will not be an issue for future sale.

threedaystar

So I would search the forums and google anything to do with the CRL crisis that many of us homeowners faced. It's not exactly this situation but close enough. Yes, you can get a retrospective warranty on a property, but you will either need to search for a company that does residential properties (e.g. one offs) or you will need to use a broker. Price can also vary according to whom you use, and sometimes how many years you need it. I think we ended up using Buildzone for our retrospective warranty and it was circa 2.5-4k (I forget to be honest). But better factor that in. You will NOT be able to get an NHBC warranty on it, as they do not do retrospective. As the other person above me states, you also need have building control certificates, and literally all the architects drawings and so much more. We ended up sending over so much paperwork, so be prepared to need to ask for this, and see how easy (or rather difficult) it will be to obtain. You are also correct in your post that you will need a warranty on the property for a mortgage, but be careful, as not all warranty providers are accepted by each bank. Essentially, do your homework, so you dont end up spending thousands on a warranty that your bank will then not accept. At the end of the day, if you are serious about the house, you probably need to get the warranty situated - especially as the house is unsaleable to 99% of people (as you are finding out, it's so difficult) and finance is a nightmare without it. I also reckon it's going to be possibly more headache than its worth (I certainly did not relish it). 

davidmcn

Architects certificate often doesn't last longer than 7 years anyway. It's not that great a risk, assuming no problems have manifested themselves already. 

Mickey666

'Architect's certificate' is a new one to me - is this a relatively new thing and what does it cover?

As above, I wouldn't worry too much about  lack of NHBC guarantee as I've read they're not much use except for really big problems and after 7 years anything like that would have been noticed anyway.  I'd say that building control certification is more important as that would be a good indication that the house was at least built correctly.  After that it's really a case of getting a good survey to check the state of the property as it actually stands.

annetheman

You can pretty much pop an NHBC certificate in the septic tank the minute you get it - it's worthless. They VERY rarely pay out for any build faults and if they do it is after you have spent many months if not years back and forth and possibly even in court.

They *might* pay out if your building e.g. burns down and kills someone but even then there will be some reason why it isn't part of what the guarantee covers. 

If you want insurance etc you could have a look on the open market for whatever it is you want it for specifically. 

leni

Thanks everyone, food for thought and more questions to ask the Estate Agent tomorrow 

AnotherJoe

I wouldnt worry about the lack of warranty, if you are concerned get a structural survey or just have a good look yourself, pair of binocs, look up high for cracks as well as lower down, and also adjacent properties.

I can concur with the difficulty getting something fixed on NHBC as i bought a house that probably was 7 years old, had a fairly substantial problem and it was horrendous getting it fixed and in the end it was maybe only £500-£1000 worth of work so i could actually have got it done myself and with far less hassle. (didnt know that at the time of course only in retrospect.

Point being, as long as you can get insurance for the major things like subsidence, an NHBC warranty or similar  is likely to be of extremely limited use both in what it will cover and time. Spend the money on a structural survey instead if you have grounds for concern.

Mickey666

Just to answer my own earlier question about an 'Architect certificate', I checked it out and found this information: https://uk.practicallaw.thomsonreuters.com/6-501-8718

In particular, this extract: "In the context of residential property, an architect's certificate may be required to meet the Council of Mortgage Lenders' requirements in connection with a new house or flat, that is, if the property does not benefit from a home warranty from a body such as NHBC Building Control Services Ltd, Premier Guarantee or Building LifePlans Ltd."

So, while all the previous comments have pointed out the practical uselessness of an NHBC warranty for any repairs (with which I agree), this info is suggesting that not having one might be an issue for mortgage applications if an Architect's certificate is not available, as the OP mentioned. 

I guess the only way to find out is for the OP to discuss things with their proposed mortgage provider asap.

davidmcn

Mickey666 said:

Just to answer my own earlier question about an 'Architect certificate', I checked it out and found this information: https://uk.practicallaw.thomsonreuters.com/6-501-8718

In particular, this extract: "In the context of residential property, an architect's certificate may be required to meet the Council of Mortgage Lenders' requirements in connection with a new house or flat, that is, if the property does not benefit from a home warranty from a body such as NHBC Building Control Services Ltd, Premier Guarantee or Building LifePlans Ltd."

So, while all the previous comments have pointed out the practical uselessness of an NHBC warranty for any repairs (with which I agree), this info is suggesting that not having one might be an issue for mortgage applications if an Architect's certificate is not available, as the OP mentioned. 

I guess the only way to find out is for the OP to discuss things with their proposed mortgage provider asap.

The relevant answers of the lenders on this point are here:
https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/1919/
(note these assume the property is less than six years old - the question isn't particularly clearly written but I think the implication is that if the lender would have accepted an architect's certificate for a property less than 6 years old, then they don't need anything for an older property).
https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/#C8922

threedaystar

AnotherJoe said:

I wouldnt worry about the lack of warranty, if you are concerned get a structural survey or just have a good look yourself, pair of binocs, look up high for cracks as well as lower down, and also adjacent properties.

I can concur with the difficulty getting something fixed on NHBC as i bought a house that probably was 7 years old, had a fairly substantial problem and it was horrendous getting it fixed and in the end it was maybe only £500-£1000 worth of work so i could actually have got it done myself and with far less hassle. (didnt know that at the time of course only in retrospect.

Point being, as long as you can get insurance for the major things like subsidence, an NHBC warranty or similar  is likely to be of extremely limited use both in what it will cover and time. Spend the money on a structural survey instead if you have grounds for concern.

It's not really about the warranty itself (e.g. if something breaks, then they have to pay out) - although thats a bonus however small. It's the much larger question about mortgage lending, and about saleability of the property (now or in the future). Essentially, without the proper warranty or architects certificate or building sign-off (or all three!), then it's incredibly unlikely that 1) any mortgage provider will not touch this with a barge pole and the person above me has linked to the lenders handbook which is really useful for information, and 2) buying the property for the average-man/woman becomes almost impossible. I know that the OP wants to get it now, possibly can find the cash to do so, and intends to hold on, but what happens if OP needs to sell before it reaches the 10 year mark for banks? It's just incredibly difficult, without these things sorted.