NHBC Buildmark Warranty: Coverage and Protection
The NHBC Buildmark is a 10-year warranty and insurance cover provided for new-build and newly converted homes. The National House-Building Council (NHBC) has provided warranty coverage since 1936, and their Buildmark scheme currently covers approximately 70-80% of new homes built in the UK.
NHBC Buildmark combines warranty and insurance protection over three distinct periods. The cover begins at exchange of contracts and continues for 10 years after the completion date, with different types of protection applying during specific periods.
Buildmark coverage is available only for homes built by NHBC registered builders who meet specific technical standards and requirements. Builders must maintain NHBC registration and construct homes according to NHBC standards for the warranty to be valid.
If warranty repairs require the occupants to move out temporarily, Buildmark can cover reasonable costs for alternative accommodation and storage of possessions. These costs are subject to prior agreement with NHBC.
Protection Periods
Exchange to Completion
During the period between exchanging contracts and legal completion, Buildmark safeguards the buyer's financial investment. If the builder becomes insolvent during this time, NHBC provides two key protections:
Recovery of the contract deposit paid to the builder, up to 10% of the original purchase price (maximum £100,000)
Coverage of reasonable additional costs required to complete the home to the original specifications, should the builder become insolvent
This protection helps ensure buyers do not lose their deposit or face unexpected additional costs if their builder encounters financial difficulties before completion.
Years 0-2: Builder Warranty
The first two years after completion form the builder warranty period, during which the builder maintains primary responsibility for the property's quality. This period includes:
Resolution of defects: The builder must rectify any defects resulting from their failure to build to NHBC technical requirements. This covers issues from minor imperfections to more significant problems.
Reporting timeframes: While most defects can be reported at any time during the two-year period, cosmetic issues must be reported within seven days of the completion date.
NHBC Resolution Service: If the builder fails to address reported issues, NHBC provides a resolution service that:
Reviews the disputed items
Makes an independent assessment
Issues a resolution report detailing what work the builder needs to complete
Sets deadlines for completion of required work
NHBC Guarantee: If the builder still fails to complete the required work after the resolution service intervention, NHBC's guarantee ensures the work will be completed, either by arranging for repairs themselves or by paying for another contractor to complete the work.
Years 3-10: Insurance Cover
The final eight years of coverage provide insurance protection against damage caused by defects in specific parts of the home. This period offers more focused protection that includes:
Physical Elements:
Load-bearing parts of the home, including foundations
External walls, windows, and external doors
Roof structure and weatherproofing
Flues and chimneys
Load-bearing floor constructions
Staircases and internal walls
Drainage systems serving the home that were installed as part of its original construction
Additional Coverage:
Contaminated land issues that could result in a statutory notice
Reasonable costs for alternative accommodation if the home becomes uninhabitable during repairs
Associated costs such as removal and storage of possessions during repairs
Important Considerations:
The cover applies to damage caused by defects rather than the defects themselves
Wear and tear and maintenance issues are not covered
Any amount claimed reduces the total cover available for future claims
The financial limits increase by 5% each year on the anniversary of the completion date
This protection system is designed to provide comprehensive coverage from the initial purchase through the first decade of ownership, addressing different risks at each stage of the property lifecycle.
Financial Coverage
The NHBC Buildmark warranty provides different levels of financial protection depending on the type of property and its construction. For individual properties, new-build homes receive coverage up to £1 million for Sections 2 and 3 of the policy combined, while converted properties typically have coverage up to £500,000. These limits apply to the total cost of all claims made during the warranty period.
For properties within a continuous structure, such as apartments or terraced houses, the coverage limits are structured differently to account for shared elements. The total coverage limit can extend to £25 million for new builds and £5 million for conversions. This higher limit reflects the potential need to address issues affecting multiple properties within the same structure, such as problems with shared foundations, roofs, or communal areas.
The financial limits are not static throughout the policy period. On each anniversary of the completion date, the overall financial limit increases by 5% of the original limit until the policy ends. This incremental increase helps account for rising repair costs over time. When calculating coverage for a claim, NHBC uses whichever is higher: the limit at the time the claim is reported, or the limit when the claim is validated.
For shared parts of buildings, the financial limits apply proportionally to each homeowner's share of the repair costs. This ensures fair distribution of coverage when repairs affect multiple properties within a continuous structure.
Claim Process
Claims during the first two years should be directed to the builder. If the builder does not address reported issues, NHBC's resolution service can assist. For claims in years three to ten, homeowners contact NHBC directly. Claims during this period must meet a minimum claim value, which is specified in the policy schedule.
The process for making claims under the NHBC Buildmark warranty varies depending on which period of coverage applies to the issue.
Claims in First Two Years
During the first two years after completion, homeowners should:
Report defects directly to the builder as soon as they are discovered
Document the issues with photographs and written descriptions
Keep records of all communications with the builder
Allow the builder reasonable access to inspect and rectify the problems
If the builder fails to address the reported issues or disputes their responsibility, NHBC's resolution service becomes available. This service includes:
Investigation of the disputed items
Independent assessment of whether the builder has failed to meet NHBC requirements
Production of a resolution report detailing necessary repairs
Setting timescales for completion of work
Guarantee of repairs if the builder still fails to complete them
Claims in Years Three to Ten
For claims during the insurance period (years 3-10), homeowners should:
Contact NHBC directly to report the issue
Provide evidence of the damage, including photographs
Allow NHBC representatives access to inspect the property
During this period, claims must meet the minimum claim value specified in the policy schedule. This value increases by £50 each year from the end of the builder warranty period. However, if a claim exceeds the minimum value, NHBC will cover the full cost of repairs without requiring any contribution from the homeowner.
For claims involving shared parts of buildings, such as communal areas or structural elements affecting multiple properties, the process may require coordination with other property owners and managing agents. The minimum claim value in these cases applies to the total cost of repairs rather than individual properties' shares.
NHBC aims to acknowledge claims within 10 working days and will arrange for an inspection if necessary. After assessment, they will either:
Accept the claim and arrange for repairs
Accept the claim and make a payment for the cost of repairs
Explain why the claim is not covered under the policy
Exclusions from Cover
While the NHBC Buildmark warranty provides comprehensive protection for many aspects of a new home, certain items and conditions are excluded from cover. Understanding these exclusions helps homeowners manage their expectations and ensure appropriate additional insurance coverage where needed.
General Wear and Tear
Normal deterioration that occurs through regular use of the property is not covered. This includes:
Scuff marks on walls and woodwork
Worn carpets or floor coverings
Fading of paintwork or finishes due to sunlight
Normal settling of the building
Weather-Related Damage
The warranty excludes damage caused by weather conditions, including:
Storm damage to roof tiles or external fixtures
Frost damage to external pipework
Wind damage to fencing or garden structures
Weather-related flooding from external sources
Fire and Smoke Damage
Damage from fire or smoke is excluded as this should be covered by standard buildings insurance. This includes:
Direct fire damage to the structure
Smoke staining and damage
Heat damage to fixtures and fittings
Associated water damage from fire-fighting efforts
Condensation
Condensation-related issues are excluded unless directly caused by a defect in construction. The warranty does not cover:
Condensation due to lifestyle factors
Mould growth from poor ventilation
Surface condensation on windows
Dampness caused by drying out of new materials where adequate ventilation has been provided
Post-Completion Changes
Any modifications made to the property after completion are excluded:
Extensions or alterations
Fitted kitchens or bathrooms installed after the original build
Additional electrical or plumbing installations
Loft conversions or basement modifications
Items with Manufacturer Warranties
Components covered by manufacturers' guarantees are excluded:
Kitchen appliances
Boilers and heating systems
Bathroom fixtures
Windows and doors (mechanical parts)
Solar panels or other renewable energy systems
Decorative Elements
Surface finishes and decorative aspects are excluded unless damaged as a direct result of a defect:
Paint finishes
Wallpaper
Tiles (unless damaged due to underlying defects)
Floor coverings
Kitchen and bathroom sealants
Additional Exclusions
The warranty also does not cover:
Boundary walls and fences unless supporting ground loads
Landscaping and garden features
Damage caused by pets or vermin
General maintenance requirements
Issues caused by failure to maintain the property
Damage resulting from accidents or misuse
Changes in colour or texture of materials
Swimming pools and associated equipment
Lifts (except during the first year)
Temporary structures
Property Transfer
The NHBC Buildmark warranty is designed to follow the property rather than remain with the original owner. This transferable protection provides continuity of coverage throughout the 10-year warranty period, regardless of how many times the property changes hands.
Transfer Process
When a property is sold within the warranty period, the coverage automatically transfers to the new owner. This transfer requires:
All policy documents to be physically handed over to the new owner
Notification to NHBC of the change in ownership
The policy schedule and insurance certificate to be included with the property's legal documents
Documentation Requirements
The following documents should be passed to subsequent owners:
The Buildmark certificate
The policy schedule
The policy booklet
Any correspondence regarding outstanding claims
Records of previous claims made under the warranty
Impact on Coverage
During property transfer, there are several important aspects of coverage to consider. The financial limits of the policy remain unchanged from the original terms, continuing at the same level for the new owner. However, it's important to note that any previous claims made under the policy will have reduced the remaining coverage available for future issues. The original completion date of the property continues to serve as the key reference point for determining all warranty periods, regardless of when the transfer occurs. If there are any ongoing claims at the time of sale, these automatically transfer to the new owner at the point of sale, ensuring continuity in the resolution process for any existing issues.
Additional Considerations
When selling a property with an active Buildmark warranty, there are several important factors to consider. Sellers have a legal obligation to disclose any existing claims or known defects that fall under the warranty's coverage. Meanwhile, prospective buyers should carefully review the remaining period of coverage to understand exactly what protection they will receive after purchase. As part of the standard conveyancing process, the warranty transfer is typically handled by the conveyancers along with other legal aspects of the sale. Once the sale is complete, it's important for the new owner to contact NHBC directly to update their contact details on the policy, ensuring they receive any important communications about their coverage.