When selling a house, especially a newer one, a common question is whether it is possible to proceed without a building warranty. This topic touches on practical issues that affect sellers, buyers and mortgage lenders alike. Understanding how a structural warranty fits into the process can help you navigate the sale more smoothly and avoid complications that could delay or even derail a transaction.
What Is a Building Warranty and Why It Matters
For those unfamiliar, a building warranty (sometimes referred to as a structural warranty) is an insurance-backed policy that covers a property against major defects that result from poor design, workmanship or materials. It typically applies to new builds, major conversions or renovations and is designed to give peace of mind to homeowners and financial protection against unexpected repair costs.
Protection against structural defects is the cornerstone of this type of cover. A building warranty generally safeguards the homeowner from significant issues such as subsidence, foundational defects, roof failures or other structural faults that can be costly to fix. Without this protection, homeowners are left to bear the financial burden themselves, which can run into tens of thousands of pounds.
Importantly, most mortgage lenders require a valid building warranty when financing the purchase of a new build, conversion or home under 10 years old. This is because lenders want reassurance that their investment is protected and that the homebuyer will not face devastating costs that could impact their ability to repay the mortgage.
Can You Legally Sell Without a Building Warranty?
Yes, But There Are Caveats
Legally, you can sell a house without a building warranty. There is no requirement under UK law that mandates a structural warranty for every property sale. However, this comes with significant caveats. While it’s not illegal, lacking a warranty may reduce the number of interested buyers or affect the valuation placed on the property. Without warranty cover, buyers may be wary, and estate agents may advise that the property could struggle to achieve its market value.
Buyer and Lender Hesitation
Most buyers expect that a relatively new property will come with a building warranty. Without it, they may hesitate, concerned about potential hidden issues. Lenders are even more cautious, often making warranty cover a condition of mortgage approval. Without it, even buyers willing to proceed might find they cannot secure the necessary finance, stalling the sale altogether.
What Happens If You Try to Sell Without a Warranty?
Lower Offers or Lost Buyers
Without a building warranty, sellers often face lower offers as buyers factor in the potential risk and cost of future repairs. Some buyers may walk away entirely, preferring a property that comes with the reassurance of warranty-backed protection.
Mortgage Rejections
Banks and building societies may reject mortgage applications for properties without a valid warranty. This narrows the buyer pool significantly, often leaving only cash buyers or specialist lenders willing to take on the risk.
Delays During Conveyancing
Even if a sale seems to be progressing, the absence of a structural warranty can cause delays during conveyancing. Solicitors may raise concerns, surveys might reveal issues that increase lender caution, and deals can fall through at the last minute if solutions aren’t found quickly.
What Are the Alternatives If You Don’t Have a Warranty?
Here are some practical alternatives for homeowners or developers in this position:
Retrospective Warranty
A retrospective building warranty is one solution for properties completed without a warranty during the build. This type of cover can be arranged post-completion, although it usually involves a thorough inspection, additional paperwork and higher premiums because the insurer did not monitor the construction process. However, once in place, it provides the same structural protection and meets lender requirements, helping to smooth out the sale proceedings.
Structural Survey or Report
Another option is commissioning a structural survey or report from a qualified professional. While this does not replace the financial protection of a building warranty, it can help reassure buyers about the property’s condition. For some buyers, particularly cash purchasers, a recent survey can provide enough comfort to proceed.
When Might a Sale Proceed Without One?
Cash Buyers or Investor Sales
Certain sales can move ahead without a building warranty, especially when the buyer is paying in cash or is an investor familiar with property risks. These buyers are not reliant on mortgage lenders and may be willing to take on the additional risk in exchange for a discounted price or attractive investment opportunity.
Older Properties Beyond Warranty Age
Homes that are over 10 to 12 years old typically fall outside the period covered by a structural warranty anyway. In these cases, the absence of a warranty is usually less of a concern, as buyers and lenders generally accept that the risk is comparable to purchasing any older property.
A Warranty Isn’t Always Mandatory, But It’s Often Wise
While it’s entirely possible to sell a home without a building warranty, it’s rarely advisable – especially for newer properties. The presence of a warranty can significantly influence the sale price, speed up the conveyancing process, and open the market to a wider pool of buyers. Even if the warranty was missed at the time of construction, obtaining a retrospective policy can be a smart move, adding both value and peace of mind.
For expert advice and to arrange a reliable building warranty for your property, contact BuildSafe today.
