Most major house builders belong to the National House Building Council (NHBC) and a contract for the purchaser of a property from such a developer should require the builder to provide NHBC insurance against structural defects. Smaller developers will often provide a similar insurance policy.
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It is an inflexible requirement of mortgage lenders that new properties have the benefit of insurance against structural defect – and accordingly the value of any new property without this insurance will be adversely affected.
The NHBC Buildmark Scheme provides:-
- The builder agrees to put right any defects to the property notified in the first 2 years – where the defect arises from a failure to build the property in accordance with NHBC requirements.
- The NHBC underwrites the agreement promising to compensate the Purchaser if the builder fails to fulfil their agreement to remedy defects during the first 2 years or to meet the cost of any repairs in the next 8 years where the loss exceeds £500 – and the defect is of a structural nature.
- The NHBC policy protects all owners of the property within the first 10 years of construction.
The NHBC Certificate will not cover claims for subsidence – this should be covered by buildings insurance.