What is the NHBC and is it any good ?

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What is the NHBC and is it any good ? The National house building council (the NHBC) is bandied about by house-builders in the UK as some sort of cast iron guarantee that their houses are safe to buy. However, nothing could be further from the truth. The NHBC is extremely limited in its support to house-buyers especially in the first year. House-buyers must beware at all times and never let their guard down just because of so called ‘insurances’, ‘5 or 10 year warranties’.




What is the history of the NHBC?

The NHBC was established in 1936. It was set up to agree and raise the standards of construction of new houses. It is a not for profit business although it employs staff who all get paid. It is one of those situations that really annoy me when organisations are ‘not for profit yet’ people still profit from the organisation.




What is it famous for ?

The NHBC is well known for providing warranties for new houses. So if you are a housebuilder you can register with the NHBC for them to provide 10 year warranties on the houses you build and sell. In theory, this means that if something goes wrong with your house the NHBC will sort the issue. Because it provides financial products (the warranties) it must be authorised and regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). Now this warranty sounds wonderful. Imagine, you are a new couple and are looking at houses to buy. All of the houses come with a 10 year warranty! This surely means that if anything goes wrong with the house then it will be fixed at no expense or inconvenience to you? Sadly not. Lets dig more into what this warranty actual covers.




What is the warranty for ?

The warranty is for:

  • newly built housing
  • converted private housing
  • affordable housing
  • self-build homes
  • commercial premises located on mixed use housing schemes.




What does the warranty cover?

So the NHBC warranty for private housing is split into two separate stages.

First stage of the warranty years 0-2

For the first two years if anything happens with the property it is down to the builder of said properties to fix the defects. Now to get even more technical in terms of the NHBC the builder only has to fix defects caused by a failure to build to NHBC tecnicnal standards…try proving that.

If the builder does not do this within the two years or goes out of business then the NHBC will fix the defect. (they will hire someone to fix the defect).

Second stage of the warranty years 3 to 10

If something happens to the structure of the house or the weather proofing such as the roof, windows etc then the NHBC will fix the defect. (They will hire someone to fix the defect). But again only where the defect is caused by a failure to build to NHBC tecnicnal standards…try proving that.




Is the warranty popular?

Yes extremely. Almost 80% of all new homes built in the UK have an NHBC 10 year warranty.

But this is not because the warranty is any good. It is largely because banks will not provide a mortgage to you unless your property has a warranty in place. Since most properties are bought with mortgages buyers need a warranty.

 

What is the advantage of the warranty?

In theory if a house builder is given a warranty it means that the house has been inspected by the NHBC and it has been built well.NHBC inspectors visit building sites at key stages to check compliance with its Technical Standards. The stages are usually (but can sometimes be more): foundations, drainage, superstructure (e.g. brickwork), pre-plaster, and pre-handover to the buyer. For flats, they also inspect roof construction. The inspection process is not designed to check every detail of the build, but if NHBC is satisfied with the overall build quality they will issue the warranty for the new home/premises.

This allows banks to offer mortgages on a property knowing that the asset is built correctly.




What are the weaknesses’ of the 10 year warranty?

The first weakness is that the warranty only covers major defects that only occur after the first year of living in the property. This means that if a coupel move into a new property they have a full 12 months to wait before the warranty can kick in. This means that the couple can be sitting in a really dangerous or uncomfortable house for 12 months while they wait for the housebuilder to fix the defects.




Not fit for use

Every year hundreds of new home buyers find out that their 10 year warrant is not what it seems.

Here are some examples:

  • A couple move into their brand new home. There are lots of minor defects. The builder does not fix the defects. The couple contact the NHBC only to be told that ‘the builder must be given time to fix the defects, contact us once the two years is up’.
  • A couple are in their house four years. Suddenly they notice a bad odour in their kitchen. A plumber arrives and tells them that there is an issue with their drainage. The couple contact the builder. He informs that as the two year stage is up he has no responsibility. He refers them to the NHBC. The NHBC investigate and say that the house was built to their standards and they are not responsible




Criticism in the media

In 2010 the BBC consumer program watchdog criticised the NHBC for not making repairs to homes under their warranty. This involved NHBC surveyors visiting the properties with defects and basically saying ‘the house was built correctly, therefore these issues are not covered by the warranty’.

In 2019 the BBC claimed that quality control of new houses had dropped.This is the whole point of the NHBC. To stop new houses being built to a poor standard and to provide protection from poor builders.




 

Reviews on trustpilot

Now we are the first people to say take everything you read on tripadvisor or trust pilot etc with a huge pinch of salt. But take a look at some of the reviews of the NHBC on the trust pilot website.

https://uk.trustpilot.com/review/nhbc.co.uk




 

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James Taylor
James Taylor
James is a property developer and property investor. He enjoys developing properties and making a change in his local community. His past times included watching rugby and playing tennis. He writes content for the property development course on property development, property investment, and property finance.