Some Developers have recently made the common mistake of thinking that there is no building warranty requirement for refurbishments or conversion projects only for new build. In fact, lenders now insist on a warranty being in place for any conversion or refurbishment where structural work is taking place. It has also been known for lenders to refuse finance even on a conversion where no structural work has taken place.
Traditionally the market for development finance has been dominated by major banks. With the likes of Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland having a combined share of 85% of the development finance market, there was little appetite for developers to look elsewhere for funding. However, in recent years the preference for tailored customer service and high customer satisfaction has increasingly become a deciding factor in the choice of development lender.
The latest happenings in the UK Building Warranty market
If you are a property developer or builder, you know the importance of obtaining the right Building Warranty.
As the leading independent provider of building warranties in the market we are happy to publish the latest updates so you can ensure you are fully informed.
It is a fact that circumstances change in the world of property development.
As an example, you build a house or block of apartments that you are going to rent for the long term, because you don’t expect to sell the asset you decide not to purchase a building warranty.
However, a few months after practical completion of the build an opportunity arises to purchase another asset prime for redevelopment so you decide to sell the original property.
Any developer about to undertake a project involving the conversion of a barn needs to consider the cost for and difficulty in obtaining a Building Warranty (Latent defect insurance).
There has been a quantum shift in the risk assessment for this type of development, the majority of insurers have recently made the decision not to offer cover for barns.
However it’s not all bad news out of the big six (Insurers) two will still offer cover but they need to collate a large amount of information from you and it can take weeks to just get an indication of cost. As an example of their reluctance to insure barns one of the providers will not insure a barn if livestock has kept in it in recent years.
After the vote for Brexit, many people had predicted that it would trigger a slowdown in the property market. However British house prices have since increased at their quickest annual rate in four months in July.
A report by Nationwide has stated that house prices increased by 5.2% in July, up from a 5.1% rise in June despite predictions that it would only increase by 4.5%.