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The UK government is set to introduce a mandatory 15-year warranty on all newly-built homes in England. The law will come into effect at the start of 2023, although this date has not yet been confirmed. At present, developers only need to take out warranties that run for ten years. The government was pushed to increase the minimum period because there have been many cases where coverage for defects has been timed out or declined.
Under the new law, buildings that have just been completed can no longer be covered under 10-year warranties and will instead need 15 year warranties. This also applies to constructions that create new dwellings. For example, when you make a loft conversion, you will need to take out a 15 year warranty. This law will only apply prospectively, meaning any buildings that are already covered for 10 years won’t have to get the 15 year warranty.
The legislation also gives the Secretary of State the power to determine the minimum parameters and standards that must be included in the warranty. The government intends to run a thorough research on the defects and liability periods, and this is why these details will be outlined in the regulations as opposed to the Building Safety Act. Another area that will be outlined in regulations is the required level of detail. Currently, new build 10 year warranties are over 30 pages long. Since these details will be set in the regulations, they can be updated easily to reflect any relevant changes.
The Secretary of State will also outline the beneficiaries of the warranty, as well as the rules for transferring the benefits of the warranty. For example, if the building is sold, the warranty will be transferred to the new owners.
The government hasn’t mentioned the developer warranty period. Under the 10 year new build warranty, the developer warranty period was 2 years, after which insurance would kick in. The new law gives the Secretary of State the power to set the minimum period for which the developer will have to fix problems in the property.
The 15 year warranty is only mandatory in England, but the government intends to implement it all around the UK over time. Any developer who fails to meet these requirements will have to pay a fine of £10,000 or 10% of the property value (whichever is greater). This fine may be waived if the developer has a reasonable excuse for their actions.
New build warranties are currently not mandated by the UK government, but the new law will set penalties for developers who fail to take out warranties on their properties. It is worth noting that many buildings in the UK are covered by these warranties, as it is required by mortgage providers. Also, the covers offer peace of mind to the property owners as they ensure that all issues will be fixed quickly and at no extra cost to the owner.
A new build warranty generally pays for structural defects in the home. The covers are divided into two periods:
• The defects insurance period – In this period, the builder will solve any structural issues in the home and fix defects. With 10 year new build warranties, the defects insurance period lasts for two years. The government hasn’t clarified the length of this period for the 15-year warranties.
• The structural insurance period – When the defects insurance period expires, the rest of the 15 year period will be covered directly by the warranty provider.
When you move into the new building, you should use a snagging list to highlight any issues with the house. This list should include all issues in the building, including defects in the paintwork and cracks. It is also better to address small issues before you move into the house.
A new build warranty will protect you from the cost of fixing structural defects in the home. More specifically, the warranty covers issues that are caused by poor workmanship and faulty materials during construction. By paying for these repairs, a warranty will give you peace of mind.
It is also important to note that mortgage providers and other lenders require homeowners to have new build warranties in place before their loans can be processed. When taking out this policy, you should check whether the provider is accepted by most lenders. Getting a good cover will not only put you at ease, but will also provide some peace of mind to the mortgage providers.
New homes may have a variety of issues, depending on the quality of the workmanship and the materials used in construction. However, here are the most common problems:
• Poor installation of weep vents
• Doors being unable to close properly
• Ill-fitted windows that let in a lot of cold air
• Ill-fitted heating and cooling systems
• Poorly done paintwork
• Brickwork pointing as this can lead to ingress and damp
The UK government is increasing the minimum period for new build warranties from 10 years to 15 years. This law is expected to take effect in 2023. Given that housing is a devolved matter, the government intends to only enforce the law in England, but other jurisdictions are likely to adopt the same rules. This law prescribes a fine of £10,000 or 10% of the property value for builders who fail to purchase the warranty.
Build Safe is a trading name of London Belgravia Brokers Ltd, Registration Number: 9069586 . Trading address is 60 Margaret Street, London, W1W 8TF. London Belgravia Brokers Ltd is an appointed representative of Ten Insurance Services Ltd, which is authorised and regulated by the Financial Conduct Authority.
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