Buying a property is often a milestone event, particularly when it’s envisioned as a long-term home for your family. To ensure that this dream home doesn’t turn into a financial burden due to structural issues, securing a structural warranty is crucial—even for new constructions.
Introduction to New Build Homes
A “new build” property refers to a building that has been constructed within the past two years and has not been previously occupied. Although some newly built homes might have been rented or owned briefly, they are generally sold for the first time by developers and are highly sought after by first-time buyers. Chelsea Estate Agents often highlight these homes because they typically qualify for government-backed incentives like the Help to Buy Scheme and come equipped with modern fixtures and fittings, including carpets and appliances, though these can vary by developer.
New builds are designed to meet current standards for energy efficiency and safety, making them more appealing. The buying process can be expedited unless the property is purchased off-plan, in which case the construction may not yet have commenced.
The Significance of a New Build Structural Warranty
Having a structural warranty in place is crucial when buying a new construction. This warranty, typically lasting for a decade, includes expenses for fixing any structural flaws resulting from design, materials, or workmanship problems. Even though new constructions typically have fewer issues compared to older buildings, there is still a possibility of hidden defects, so it is crucial to carefully read the warranty terms before completing the purchase. Estate agents in Knightsbridge advise that a valid warranty is also typically needed by most mortgage providers in order to secure a loan.
What is Included in the Warranty Coverage?
At first, the warranty protects your deposit, allowing you to recover it in case the developer goes bankrupt before finishing the construction. After the property is constructed, the warranty coverage is divided into various stages:
●First 2 Years: During this defects insurance period, the developer is responsible for repairing any structural issues that may arise, such as faulty plumbing or compromised window seals.
●Years 3-10: After the initial period, the warranty primarily covers major structural defects, including problems with foundations, roofs, and load-bearing parts of the property. It’s crucial to be aware of when this period begins and what specific conditions are covered.
Each warranty provider may offer different terms, so it’s important to thoroughly understand your policy and discuss any potential exclusions or additional coverage options with the seller.
What’s Not Covered?
Normally, new construction guarantees do not include protection from harm caused by weather conditions, natural deterioration, or problems arising from inadequate homeowner upkeep. It is important to mention that warranties may not cover issues such as moisture or condensation unless they are specifically caused by the builder’s failure to meet warranty terms. Make sure to carefully read the details to understand the complete extent of protection and verify that there are terms for handling any small problems or faults after finishing.
Impact on Mortgage Applications
Structural warranties play a crucial role in mortgage applications for new construction projects by providing lenders with confidence in the soundness of their financial commitment. Lenders may have different definitions for a new build, so it’s recommended to confirm this with your mortgage provider. Furthermore, banks might provide varying loan-to-value ratios for new constructions in order to reduce the risk of loss in value.
Addressing Structural Defects
If you detect structural defects within the first two years post-completion, promptly contact the builder. Keep detailed records of all correspondences in case disputes arise.
After this period, any structural issues that emerge fall under the warranty provider’s purview, and it’s their responsibility to address these concerns based on the terms specified in your policy.
Warranty Transferability and Renovations
A structural warranty remains with the property, transferring automatically to new owners if the property is sold within the ten-year period. However, significant renovations might invalidate the original warranty, necessitating an upgrade or a new warranty to cover the modified structure.
Distinguishing Between Structural Warranty and Home Insurance
A structural warranty addresses flaws in the construction of a building, whereas home insurance guards against external damages and losses such as fire and theft. Having both forms of insurance is crucial to ensure full coverage of your property and possessions. Mortgage lenders usually necessitate building insurance in their lending requirements.
Buyers can protect their investment and confidently navigate homeownership by comprehending and controlling these elements when purchasing a new build home.
