Home warranties explained: What does your warranty cover?

Key takeaways

• A home warranty is a 10-year insurance policy for new build homes that covers structural defects.
• The first 2 years are the builder liability period, during which the developer must fix most issues.
• Years three to ten provide insurance specifically for major structural problems, such as foundations or roofing.

What is a home warranty?

A home warranty is a 10-year insurance policy designed to protect buyers of new-build properties. It covers the cost of repairing structural defects caused by poor workmanship or materials, providing essential financial security for homeowners.

Unlike standard buildings insurance, which covers accidental damage such as fire or flooding, a home warranty specifically covers faults in the property's design, materials, or construction. In the UK, most mortgage lenders will not provide a loan for a new build home unless a structural warranty from a recognised provider is in place. This ensures that the property is built to a specific technical standard and that there is a mechanism for redress if things go wrong.

While it is often called a guarantee, it is technically an insurance policy. It stays with the property, so if you sell the house within the ten-year period, the remaining cover transfers to the new owner. This can be a significant selling point in the second-hand market.

How does a new build warranty work?

UK new build warranties usually operate in two distinct stages. The first 2 years involve a builder liability period for most defects, while the remaining 8 years provide insurance cover specifically for major structural failures.

During the initial 2-year period, often called the defects insurance period, the builder is legally responsible for fixing any problems that arise from their failure to build to the warranty provider's standards. This includes everything from drafty windows to plumbing leaks. If the builder refuses to act, the warranty provider can offer a dispute resolution service to help mediate.

From the start of year three until the end of year ten, the policy shifts into the structural insurance period. During this time, the scope of cover narrows significantly. You are no longer covered for smaller snags or cosmetic issues. Instead, the policy only pays out for major structural defects, such as issues with the foundations, load-bearing walls, or the roof.

What does a home warranty cover?

Coverage typically includes the foundations, load-bearing walls, roofing, and double glazing. It focuses on the building's structural integrity rather than on cosmetic issues or general wear and tear that occur over time.

The primary goal of the warranty is to ensure the house remains safe and weatherproof. Key areas covered include:

• Foundations and ground works.
• Load-bearing parts of the floors and walls.
• Roofing structures and coverings.
• Drainage systems serving the property.
• Weatherproofing, including the external render and window seals.

It is important to note that the warranty is not a maintenance contract. It will not cover items that fail due to improper care. For example, if a roof leak is caused by a slipped tile that was ignored for months, the insurer might reject the claim.

What is excluded from a home warranty?

Home warranties do not cover general wear and tear, cosmetic defects like minor paint scuffs, or problems caused by lack of maintenance. They also exclude damage from weather events covered by standard building insurance.

Common exclusions include:

• Shrinkage cracks: New homes often develop small cracks as the building materials dry out. These are considered normal and are not structural defects.
• Damp and condensation: Unless caused by a structural failure in the damp proof course or weatherproofing, these are often attributed to lifestyle factors.
• Alterations: If you extend the property or make significant changes, the warranty may be voided for those specific areas.
• External structures: Garden fences, paths, and detached garages are often excluded unless specifically mentioned in the policy.

Pro tip: Always keep a copy of your policy document handy. It lists specific financial limits for claims, which can vary by the development's size and type.

Who are the main home warranty providers?

The National House Building Council (NHBC) is the largest provider in the UK, covering approximately 80% of new homes. Other major providers include LABC Warranty, Premier Guarantee, and Checkmate Warranty.

Each provider has its own set of technical standards that builders must follow during construction. Surveyors from these organisations carry out inspections at key stages of the build to ensure compliance.

• NHBC: Known for its Buildmark policy, it is the industry standard and widely accepted by all UK lenders.
• LABC Warranty: Works alongside local authority building control departments to provide cover.
• Premier Guarantee: A popular choice for both large developers and self-builders.

When you are buying a property, your conveyancing solicitor will verify which warranty is in place and ensure it meets your lender's requirements. If you are still in the early stages of your move, you can use the Moving Compared tools to find expert conveyancers who specialise in new build transactions.

How do you make a claim on a home warranty?

To make a claim, you must first contact your developer in writing if you are within the first two years. If they fail to act, or if the defect is structural and occurs after year two, contact your warranty provider directly.

The process of making a warranty claim requires a methodical approach to ensure you receive the repairs or compensation you are entitled to. During the initial two-year builder liability period, your contract is with the developer. You should send a formal letter or email detailing the issue, including photographs and the date the problem was first noticed. It is helpful to refer to the specific technical standards found in your warranty handbook to show how the work falls short.

If the developer ignores your request or goes out of business, you should then trigger the dispute resolution service provided by your warranty company, such as the NHBC or LABC. They will often send an inspector to the property to assess whether the builder has breached their requirements. If the inspector agrees with you, they will issue a notice to the builder to carry out the repairs within a set timeframe.

For claims made between years three and ten, you bypass the builder and deal directly with the insurance side of the warranty provider. At this stage, you will likely need to provide professional evidence that the issue is structural. This is where hiring an independent surveyor can be invaluable. A surveyor can produce a technical report that proves the fault is a result of a structural failure rather than general wear and tear, which significantly strengthens your insurance claim.

Always be mindful of time limits. Most policies have a strict ten-year cutoff from the date of completion. If you notice a problem in year nine but wait until year eleven to report it, you will likely find yourself without cover. Keeping a detailed log of all correspondence and repairs throughout your ownership will help ensure a smoother claims process if a major issue arises later on.

Pro tip: If you are struggling to get a response, our guide on what to do if a developer refuses to fix snags offers practical steps to resolve the situation.

Why a snagging survey is essential for your warranty

A snagging survey identifies defects before the builder liability period ends, ensuring that issues are documented and fixed at the developer's expense. This prevents minor problems from becoming expensive structural issues later.

While a home warranty is great for major problems, it does not always cover the smaller finishing issues that can make living in a new home frustrating. A professional surveyor can spot things that a layperson might miss, such as incorrectly installed insulation or poorly fitted windows. Identifying these early ensures they are logged within the initial two-year window.

You can find qualified surveyors through Moving Compared to carry out a comprehensive snagging report. This document serves as powerful evidence when asking your builder to carry out repairs.

The role of conveyancing in checking your warranty

Conveyancing solicitors are responsible for ensuring that a valid structural warranty is in place before you exchange contracts. They also check that the developer has the necessary insurance to cover the deposit.

Buying a new build involves different legal complexities compared to an older home. Your solicitor will check the planning permissions, building regulations completion certificates, and the specific terms of the home warranty. They ensure the policy is fully compliant with the UK Finance Mortgage Lenders' Handbook, formerly known as the Council of Mortgage Lenders (CML) Handbook.

Choosing a solicitor with experience in new builds is vital. You can compare quotes for specialist conveyancing services on our platform to ensure your legal interests are protected throughout the purchase.

Planning your move to a new build

Once the legal work is complete and your warranty is in place, the focus shifts to the physical move. New build sites can sometimes have restricted access for large vehicles, so it is important to coordinate with your removals team.

Professional removal companies are experienced in navigating the logistics of new developments. They can help with packing and ensure your belongings are moved safely into your brand-new home. To get started, find local removals through Moving Compared for a reliable team that fits your schedule and budget.

Summary

A home warranty is an essential layer of protection for any new build buyer. By understanding the difference between the builder liability period and the long-term structural insurance, you can ensure your home remains a safe investment. Remember to report issues early and use professional services, such as snagging surveys, to catch defects before your protection period ends.

Disclaimer: This is an informational piece, and readers should consult a financial adviser for specific mortgage or financial advice.