The age of the property
Older materials are often more expensive
1 Accurate as of October 2023
A new-build home is one that has been built but never lived in. It is also usually defined as a property that has been built in the last two years, though the exact definition can differ between lenders.
They are attractive to buyers who want modern furnishings and insulation, while it is also possible to buy them before they have been finished, allowing them to be partly built to your specifications.
New-builds are put into a special category for insurance purposes because there are certain ways that things can go wrong, including construction defects or features and fittings that don’t work properly. Many of these should be protected by the 10-year warranty which comes with most new-build properties – but that warranty doesn’t cover every eventuality.
If you buy a new-build, your mortgage provider will almost certainly require you to get a buildings insurance policy to protect the property for damage that’s outside your control, including fire, flooding and storms.
Most new properties in the UK are constructed by companies registered with the National House-Building Council (NHBC), and they come with a certificate that acts as a 10-year warranty protecting you from certain common problems.
The NHBC Buildmark certificate currently protects up to 80% of newly built or converted homes in the UK. It also protects a deposit of up to 10% before completion.
The NHBC certificate lasts for 10 years, and works like this:
For the first two years, whoever built your property will fix any issues that result from the work they did – for example, windows and doors not opening or closing properly
For the remaining eight years it works as an insurance policy covering you for problems with the property where it has not been built to technical specifications – but not wear and tear or other things like damage caused by fire or smoke. This means you must still take out buildings insurance
You’ll also be covered if you lose your deposit because your builders ended up bankrupt or insolvent – up to either 10% of the purchase price or £100,000, whichever is lower
The cost of your annual home insurance depends on plenty of factors, including size of the property, location and construction type. Cost will also depend on the policy type you buy, with combined buildings and contents being the most comprehensive but also the most expensive
Average sold premiums*
Building and Contents
*Data based on sold polices January 2024.
While new-build homes are usually well built and don’t often have problems, the NHBC certificate protects you if it was shoddily built. However, don’t be lulled into thinking you do not need separate insurance. Should your house burn down or be burgled, this would not usually be covered, so make sure you get proper cover to avoid any nasty surprises."
It’s not mandatory to take out home insurance but it is a very good idea – even on a new build.While new-builds come with a warranty that covers you for issues arising from the quality of the build, this won’t protect you for standard damage caused by things like fire or flooding. What’s more, your mortgage lender will almost certainly require you to take out buildings insurance before they lend you the money.
It's also a good idea to consider contents insurance for your possessions inside your home. This can protect belongings such as furniture, electricals, and white goods. These can all be expensive to replace and are worth protecting.
The cost of your home insurance depends on many factors, including where you live and what the house is like, but because newer homes tend to be better constructed and made out of readily available materials, it usually costs less on average to insure them.
New-build homes come with many advantages – they have modern designs which aim to be future proof, they’ve yet to suffer wear and tear, and there are certain government schemes available which can often make them cheaper to buy.
The NHBC is an independent body which provides warranties and certification for new homes. It also supplies inspectors for building regulations.
It is a non-profit distributing company, which means it is bound to put all its profits back into running its services. NHBC is authorised and regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
Most newly built properties come with a certificate, either from NHBC or one of the two other bodies which provide similar warranties. Without a warranty, you’re not protected if there are flaws in the construction of your home.
If your new-build property doesn’t have a buildmark certificate it makes it even more important to take out a home insurance policy that covers your building and contents.
You should also ask the builder why they aren’t part of the scheme before you buy the home. There could be good reasons for this, but you should ideally aim to find a property with a certificate as without one you may not be fully protected.
If you’re purchasing a property that’s been newly converted you may be eligible for a Buildmark certificate, however it may come with certain exclusions – you should become familiar with any policy documents and certificates so you know exactly how the cover applies.
In the first two years, the building company will put right any physical damage that occurs to your home as a result of it failing to build to the NHBC’s technical specifications. If it fails to do this then the NHBC will help under its resolution service.
In years three to 10, Buildmark provides insurance that should protect your home from damage that results from the property not being built to NHBC requirements. It does not cover accidental damage not arising from building issues or the damage or theft of contents.
This article is intended for information purposes only. We are unable to give financial advice or recommendations but hope you find this article useful.
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