The NHBC (National House Building Council) Explained for New Build Home Buyers

When you're purchasing a new build home in the UK, you'll likely encounter the term "NHBC warranty" or "Buildmark cover" in your paperwork. But what exactly is the NHBC, and why does it matter to you as a homebuyer? This guide explains everything you need to know about the National House Building Council and how their services affect your purchase.

What is the NHBC?

The National House Building Council, established in 1936, is the UK's largest provider of new home warranties. As an independent, non-profit organisation, the NHBC exists to raise standards in house building by championing high-quality homes and protecting homeowners. They achieve this through training and quality services, and by assessing, inspecting and directly insuring new homes registered with them.

Unlike many organisations in the construction sector, the NHBC is a company limited by guarantee with no shareholders. This means they are independent of both government and the construction industry itself. Any profits generated are reinvested back into the business to support their core purpose of building confidence in the construction quality of new homes.

According to their website, around 80% of new homes built in the UK each year are covered by an NHBC 10-year warranty, making them by far the dominant warranty provider in the market. The NHBC is also the UK's largest single Approved Inspector for Building Regulations, inspecting around 50% of all new build properties.

The Buildmark Warranty Explained

The cornerstone of the NHBC's offering to homeowners is Buildmark, their industry-leading home warranty and insurance product. The concept of a new home warranty isn't new, the NHBC introduced a two-year building warranty in the 1940s, followed by the first 10-year warranty in 1965. Today's Buildmark policy has evolved from these early initiatives.

Buildmark provides cover in three distinct phases. First, it includes deposit protection, which safeguards your deposit if the builder becomes insolvent before completion. Second, during the first two years after completion, the builder is responsible for fixing any defects caused by their failure to build to NHBC Technical Standards. This is backed by the NHBC resolution service, which can step in if the builder fails to rectify issues or has gone out of business.

The third phase covers years three to ten, during which NHBC provides insurance cover against damage caused by defects in the construction of the property. It's important to understand that this later phase only covers certain aspects of the building, specifically damage to the main construction and weather-proofing elements, and only when actual damage has occurred due to breaches of NHBC Technical Standards.

NHBC Standards and Inspections

To sell homes covered by Buildmark, builders and developers must register with NHBC and comply with the NHBC Standards. These standards define the technical requirements and performance expectations for the design and construction of new homes, providing guidance on how these can be achieved. The standards are regularly reviewed and updated to reflect changes in building regulations and best practice.

During construction, NHBC inspectors visit building sites at key stages to check compliance with these Technical Standards. Typical inspection stages include foundations, drainage, superstructure (such as brickwork), pre-plaster, and pre-handover. For flats, roof construction is also inspected. Last year, the NHBC conducted over a million inspections across the UK.

However, it's important to understand that these inspections are not designed to check every detail of the build. The inspection process provides an overview of build quality, and if the NHBC is satisfied overall, they will issue the warranty. There have been instances where reportable items found during construction are still deemed an acceptable risk, and the build receives approval.

Why Mortgage Lenders Require NHBC Cover

Most mortgage lenders in the UK require that a new build property has an NHBC warranty, or equivalent cover from another approved provider, before they will lend money for the purchase. This requirement is detailed in the Council of Mortgage Lenders' handbook and reflects lenders' need for assurance about the quality and insurability of the property they are financing.

The warranty provides lenders with confidence that if significant defects emerge, there is a mechanism in place to address them without the property losing value or becoming unsellable. For you as a buyer, this means that having NHBC cover is essentially a prerequisite for obtaining a mortgage on most new build homes.

Understanding the Limitations

While the NHBC warranty provides important protection, it's essential to understand its limitations. During the first two years, the builder is responsible for rectifying defects, with the NHBC only stepping in if the builder fails to do so or becomes insolvent. The types of defects covered are those resulting from failure to meet NHBC Technical Standards, not every minor imperfection you might notice.

From year three onwards, the cover becomes more limited, focusing on specific aspects of the building fabric and only where damage has actually occurred. Cosmetic issues, general wear and tear, and many of the minor defects that homeowners commonly discover are not covered by this later phase of the warranty.

The NHBC has faced criticism over the years. A 2010 BBC Watchdog programme highlighted cases where homeowners felt the NHBC had failed to properly repair homes or compensate owners adequately. The NHBC responded by acknowledging that construction issues can be complex and that expert opinions may differ, whilst pointing out that they resolve claims from around 15,000 homeowners each year and help resolve around 5,000 disputes between homeowners and builders annually.

More recent concerns have centred on whether the quality of new builds has declined, with pressure on the industry to build 300,000 homes per year potentially affecting standards. These concerns highlight why independent professional snagging inspections remain valuable, even when NHBC cover is in place.

The Role of Independent Snagging Inspections

Given that NHBC inspections occur at specific stages during construction and are not designed to identify every defect, many homebuyers choose to commission an independent snagging inspection. Research has shown that the average new home has in excess of 140 defects, many of which are not visible to the untrained eye or may not be apparent during the NHBC's key stage inspections.

An independent snagging inspection provides a comprehensive review of your property, documenting defects with photographs and detailed descriptions. This report can then be presented to your builder during the two-year builder warranty period, ensuring that as many issues as possible are identified and rectified whilst the builder remains responsible.

The NHBC's resolution service can be helpful when builders are unresponsive, but having a thorough, professional snagging report from the outset strengthens your position and provides clear documentation of issues that need addressing.

The NHBC plays a significant role in the UK new homes market, providing warranties that protect around 1.5 million homes and setting the standards that registered builders must meet. Their Buildmark warranty offers important protection, particularly against catastrophic defects and builder insolvency.

However, homebuyers should understand both what the warranty covers and, equally importantly, what it doesn't cover. The NHBC warranty is not a guarantee of perfection, nor does it replace the need for thorough due diligence when purchasing a new build home. Independent professional advice and inspection services remain valuable tools in ensuring you receive the quality of home you've paid for.