New build mortgage warranty requirements
Why mortgage lenders want a structural warranty on a new build home, what the UK Finance Mortgage Lenders' Handbook expects, and what that means for developers selling homes and self-builders borrowing to build.
- Instant response
- Insurer quotes usually within one working day of your proposal
- UK FCA Regulated Broker
- No broker fee to pay
- Single plots to full estates
The lender's view
Why lenders ask for a new build warranty
A mortgage lender's security is the home itself. If a new house turns out to have a serious structural defect, its value can fall sharply - so lenders want to know that someone other than the buyer will pay to put it right.
Most mortgage lenders follow the UK Finance Mortgage Lenders' Handbook, which conveyancers work to when they act for a lender. It expects new and newly converted homes to have a warranty from a provider the lender accepts, or in some cases a professional consultant's certificate. Each lender adds its own requirements, and some lenders use their own instructions instead of the Handbook.
The result is simple: lenders vary, and the only test that matters is whether the lenders your buyers are likely to use will accept the cover on your homes. We check that for the lenders likely to be involved before you commit - but each lender makes the final decision.
What lenders accept
A warranty, or a consultant's certificate
A structural warranty from an acceptable provider
The usual route for developers and most self-builders. Each lender sets its own rules on which warranty providers it accepts, so a warranty from a provider the lenders accept is what keeps sales moving. The cover typically lasts 10 years from completion, with 12 years available from some providers.
A professional consultant's certificate
Signed by a qualified architect, surveyor or engineer who monitored the build at key stages. It is not an insurance policy. On the standard UK Finance form the consultant is liable for six years from the date of the certificate and must hold professional indemnity insurance, so a claim means showing the consultant was at fault. Lenders vary on when they will accept one - some only for certain homes or numbers of homes, and some not at all. A future buyer's lender may take a different view from the first.
At the point of sale
What your buyers' conveyancers will ask for
- Evidence that the plot is registered with the warranty provider, usually before exchange - often an initial certificate or cover note
- Confirmation that the provider is one the buyer's lender accepts
- The final certificate for the plot once the home is finished, usually needed for completion
- Evidence that building control has signed off the work - the system works differently in Scotland, where a building warrant is needed
Borrowing to build
Self-build and development lenders
Self-build mortgages
Self-build mortgages are usually released in stages as the build progresses. Lenders often want warranty cover or a consultant's supervision in place before they release funds, so arrange it before the first release. See self-build warranties.
Development finance
Many development lenders make a warranty a condition of the loan, because the homes are their exit and every sale depends on the buyers' lenders. See small site warranties and estates and phased sites.
Lender and mortgage questions
Will every mortgage lender accept any structural warranty?
No. Each lender decides which warranty providers it accepts, and their requirements differ. A warranty is only useful if the lenders your buyers use will accept it, which is why we check lender acceptability before you commit to a provider - though the lender makes the final decision.
Can my buyer get a mortgage on a new build without a warranty?
Sometimes, if the lender accepts a professional consultant's certificate instead. Lenders vary on this, and many buyers will find their choice of lender limited. Without either, the home is usually only open to cash buyers.
Is building control sign-off enough for a mortgage lender?
Usually not. Building control approval shows the work met minimum legal standards when it was checked. It is not insurance, so lenders normally want a warranty or consultant's certificate as well.
When should I check which lenders accept my warranty provider?
Before you accept a quote. Changing provider part way through a build is difficult, and finding out at the first sale that a buyer's lender will not accept the cover can cost you the sale. We check this as part of arranging your cover.
Make sure your warranty works for your buyers
Tell us about your homes and where they are. We will find providers likely to be accepted by the lenders your buyers are likely to use.
- Takes under a minute
- Instant reply by email with your reference
- Insurer quotes usually within one working day of your completed proposal
- Sites anywhere in England, Scotland, Wales and Northern Ireland
- Free and no obligation
Already filled in a proposal form? Email it to us or send it on WhatsApp with any drawings you have and we will take it from there.
