NHBC OR "other"

[joe90]

Dear all, after my two year fight with planners ( which is not over yet as I have an appeal to the Secretary of State ) I am getting the building regs drawings done and after a conversation with the building inspector ( a very nice chap, with an open mind about modern methods etc) has asked if I was getting a NHBC certificate as someone he knows who did a self build but didn't get a certificate as he planned to live there for " ever" dropped dead and his wife wanted to move but was unable to sell because there was no warranty on the house, she eventually sold for cash for a very reduced price. 

NHBC costs are high in my opinion and it has been said on forums that they are " not worth the paper they are written on" but are there other avenues that anyone can recommend as this kind of " insurance" seems sensible.

 

thanks, john

[PeterW]

Ark has been mentioned, as has BuildStore and a couple of others.

[Jeremy Harris]

We bought a house that had been a self-build with no warranty.  I suspect the seller, who worked for a building company as a brickie, was a "serial self-builder", as he was in his late twenties and this was, apparently, his second self-build. 

Anyway, the lack of a warranty was no problem at all.  Our lawyer raised it and the solution that kept our lender happy was an indemnity policy, which the seller paid for.  When we sold the house 5 years later (when it was 7 years old) we had no problem either.  Our buyer's lender just accepted the indemnity.

We've talked over the warranty thing and our decision is that if one of us falls off this mortal coil before the other, then the remaining partner won't sell.  It's really because we've both put a great deal of emotional effort into it, so neither would want to sell in the event of the demise of the other.  I know it does seem commonplace for the remaining partner to sell up following a bereavement (both my mother and my mother in law sold up within a year) there's something very different about a self-build and the sense of ownership.  We have a neighbour (two doors up from the new place, about 100m up the lane in practice) and she and her late husband (who was an architect) built their house.  She still lives there today, on her own, and is proud of the house they built together. 

 

[joe90]

Thanks guys for your comments, if I take time to answer it's because I have no tinter-net connection on site, it requires a visit to the pub :). Any other views gratefully received.

 

[ProDave]

On my last self build I used the HNBC solo for self build. It wasn't too badly priced then. We took it on as we knew we might sell within 10 years.

As it happens, the 10 years of that has just expired and we still have not sold, so it in fact turned out to be a waste of money. And there have been no issues with the house that would have warranted a claim either.

The present new build, we have no intention of selling (after the trouble we are having selling, I won't be in a hurry to sell another property ever, it has the be the very worst aspect of owning a home) so we are not bothering with any form of warranty. The only bit of paper that interests me is the building control completion certificate. I did briefly lok at structural warranties and found them all to be a lot more expensive than 10 years ago.

[PeterW]

I do know a couple of mortgage companies (MMBC for one) that require a warranty to be in place for self build mortgages.

That may be a factor for some people.

[joe90]

2 minutes ago, PeterW said:

I do know a couple of mortgage companies (MMBC for one) that require a warranty to be in place for self build mortgages.

That may be a factor for some people.

I can understand that but we are lucky that we have the money to build and don't need a mortgage, just spoken to our architect who says they can issue a certificate or I could get an indemnity insurance like JSH says above.  After all it will have passed building regs !!!!!!!!!!

[Redoctober]

For what it is worth, we too are looking to be mortgage free and are therefore not duty bound to have such a warranty. Like the comments above, we will not be purchasing one either for the very same reasons. I believe they are fairly expensive and believe the money could be better spent elsewhere.

PW.

[reddal]

1 minute ago, Redoctober said:

or what it is worth, we too are looking to be mortgage free and are therefore not duty bound to have such a warranty. Like the comments above, we will not be purchasing one either for the very same reasons.

We were in a similar position a few years ago - but decided to get a warranty from NHBC Solo - not because we were forced to - but we were advised it might be a lot more difficult to sell without it because other people would find it harder to get a mortgage. We weren't planning to sell anytime soon - and still aren't - but it seemed prudent to protect the value of the property as a financial asset - just in case we did decide to sell.

However we found the process with NHBC very painful - and would not go down that route again. We didn't realise at the time that there was such an overhead to getting this kind of warranty - ie beyond the cost of the premium - the huge pain of having to jump through extra hoops to keep NHBC happy (way above and beyond what building control needed).

I like Jeremys solution of buying an indemnity if and when there is a need. I don't know how universally those are accepted - but if in the same position again I would research that carefully.

 

[ProDave]

I don't recall any particular problems satisfying NHBC. Yes they required more inspections than building control but there was never any real issue.  There were a few points where BC and NHBC differed and we had to assure one of them that we would change a detail, while telling the other we wouldn't.

At the end of the day, my house has been detailed by an architectural technician and a structural engineer. As long as I build to the detail in the plans, and BC are happy at each inspection, then I am happy, and in an ideal world that should be all that anyone requires.

[Declan52]

My architect used his own insurance to certify that all was built correctly. I had local building control visit at the appropriate stages as well.

[Stones]

4 of our builds were NHBC (as the builders we used were NHBC registered).  1 of our builds was signed off using a structural engineers PI certificate, valid for 6 years or 3 owners.  We had no trouble selling that house, as at the end of the day, the buyers lender had a bit of paper that certified the house had been built according to the approved plans.  

This is the route we are using on this build.  For a few hundred pounds, we'll have a PI certificate from an inspecting surveyor to confirm the house has been built according to the approved plans.  My builder, who does the odd speculative development, uses this method for his builds and has not had an issue selling.

[joe90]

What I don't get is if the build is inspected by building control surely that proves it was built properly/ as designed etc etc.

[Stones]

But BC don't really inspect the build, or at least not in the same way as the warranty / PI providers do.

[PeterW]

But if you take the LABC warranty they do...

 

[warby]

3 hours ago, reddal said:

We were in a similar position a few years ago - but decided to get a warranty from NHBC Solo - not because we were forced to - but we were advised it might be a lot more difficult to sell without it because other people would find it harder to get a mortgage. We weren't planning to sell anytime soon - and still aren't - but it seemed prudent to protect the value of the property as a financial asset - just in case we did decide to sell.

However we found the process with NHBC very painful - and would not go down that route again. We didn't realise at the time that there was such an overhead to getting this kind of warranty - ie beyond the cost of the premium - the huge pain of having to jump through extra hoops to keep NHBC happy (way above and beyond what building control needed).

I like Jeremys solution of buying an indemnity if and when there is a need. I don't know how universally those are accepted - but if in the same position again I would research that carefully.

 

There is a significant cashflow difference to consider between these two options.

In a self build, a warranty has to be paid before site works start and cashflow is often difficult at the end of a project, i.e. you are running out of money.

The indemnity option means you only pay the solicitor from the sales proceeds at the point of sale, when money will not be as scarce, hopefully.

[Crofter]

23 hours ago, joe90 said:

What I don't get is if the build is inspected by building control surely that proves it was built properly/ as designed etc etc.

But presumably you can't claim against BC if a defect is later found? It's all about passing the buck.

[Jeremy Harris]

My one and only attempt to claim against NHBC failed, even though I had irrefutable proof that the water ingress and subsequent damage was caused by the builder fitting the chimney flashing upside down (i.e overlaps in the lead pointing upwards................).

After several months of battling with NHBC, paying for an independent surveyor and incurring a few hundred pounds in lawyers fees, my lawyers advice was to cut our losses and pay to fix the problem ourselves, as in his experience NHBC would do damned near anything to delay paying out until owners got fed up of waiting.

[joe90]

Well I have just had a quote from the architects to do a set of nine inspections and produce an architects certificate of compliance and including VAT they want £2750 ? Will it be cheaper to get indemnity insurance if we do sell within the 10 years?

[Stones]

The surveyor who is signing off my build is charging £850 to inspect the build and provide a PI certificate for me.  Perhaps worth approaching someone else?

[PeterW]

Just had a quote from BuildZone of about £700 for warranty...

[joe90]

Thanks guys, tomorrow's job list is to get quotes. I still think it's bonkers that I pay the building inspector to make sure it's built properly then I need someone else to also inspect it to give me a certificate !!!

[PeterW]

Just checked and total inc VAT for warranty and private building control is  £1850

[joe90]

Well er indoors and I have talked this over and we like what Jeremy said earlier, so no NHBC or similar and take out indemnity insurance if we have to sell. We had the same conversation as Jeremy and feel that we both would probably not sell after one of us pegs it because of the input into the build and the location. Thanks one and all for your valuable input.