The age of the property
Older materials are often more expensive
A new-build home is usually defined as a property that has been built in the last two years which has never been owned or lived in, though the exact definition can differ between lenders.
New builds are put into a special category for insurance purposes because there are certain ways they can go wrong – usually 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 lender 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.
UPDATED MAY 2022
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 around 80% of newly built or converted homes in the UK – or 1.5 million or so properties in total.
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 physical damage resulting from work carried out by the builders – but not wear and tear
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 greater
Older materials are often more expensive
We need to know what the roof, walls and frame are made of
Local crime statistics often have an effect on your premiums
A higher subsidence risk means more chance of serious damage
If the property is near a river there is a higher flood risk
These indicate a larger building and higher costs
Listed buildings are especially expensive to insure
The cost of your annual home insurance depends on plenty of factors – including size, location and construction type.
New-build homes don’t often have issues, and those that do tend to be covered by the NHBC certificate. You will still need a home insurance policy when you get your mortgage, however, as the certificate doesn’t cover you for damage that’s not been caused by the builders."
- David McDermottroe, Home Insurance Expert
Yes, you do. Even though new-build homes usually come with a warranty that protects you from errors in the construction process, the warranty doesn’t cover you for everything that can go wrong with a new home. What’s more, your mortgage lender will almost certainly require you to take out buildings insurance before they lend you the money.
The cost of your home insurance depends on many factors, including where you live and what the house is built out of, 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 helps provide 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 if possible before you buy the home. It may be because they’re a small business and they can’t afford to pay the fees involved, but you should ideally aim to find a property with a certificate.
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, Buildmark covers you for physical damage that occurs to your home as a result of builders’ errors, the removal of contaminated land, and any costs you might incur for staying in alternate accommodation and storing your possessions while corrective works take place.
In years three to 10, Buildmark should protect your home from damage that results from the property not being built to NHBC requirements.
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