Buying a newly converted property with no NHBC or Zurich Warranty

by Readers Question

9:24 AM, 8th May 2015
About 4 years ago

Buying a newly converted property with no NHBC or Zurich Warranty

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Buying a newly converted property with no NHBC or Zurich Warranty

I am thinking of buying a newly converted flat (leasehold) that I really like. My mortgage broker however pointed out an issue i.e. it is newly converted and I would be the first buyer since conversion. The property has a building control certificate saying all work complies to regulations but doesn’t have any guarantee that comes with new builds. The seller is offering an indemnity instead. 

This is what my broker said “Normally lenders will look for NHBC or Zurich guarantee that often comes with properties classed as new conversions or new builds, these normally cover any building / conversion defects for around 10 years, it will definitely restrict your options moving forward. Unfortunately an indemnity policy wont suffice”

I can perhaps try and get a mortgage on it as I have a good credit rating and can afford 25-40% deposit, but I am thinking, is it worth it? In other words, am I taking a big risk by buying a property with no such guarantee and might face huge costs in future? What kind of costs they might be given the place will have normal building insurance and complies with building control regulations? Is this something that will still be a problem if I sell the place 10 years later?

Any opinions on this will be appreciated.

Thanks

Rita



Comments

Mark Alexander

9:25 AM, 8th May 2015
About 4 years ago

I have invited Howard Reuben, one of our recommended mortgage brokers, to comment.
.

Sam Addison

17:02 PM, 8th May 2015
About 4 years ago

I built my own house 10 years ago. At that time NHBC did not inspect themselves but relied on Building Control inspections (Zurich inspected). You might try asking NHBC if they would issue a guarantee retrospectively?
Selling after 10 years won't need a guarantee as they only last 10 years. If it hasn't fallen down by then it probably does not have major structural faults.

Mark Alexander

17:11 PM, 8th May 2015
About 4 years ago

Was the work signed off by a qualified and insured architect and also by building control? If so I really can't see what the problem is.
.

Tony Lilleystone

17:38 PM, 8th May 2015
About 4 years ago

Many lenders will lend on conversions provided that a Professional Consultant's Certificate
is provided in the form issued by the Council of Mortgage Lenders.
The professional consultant should be either a registered architect or a member of one of the other professional bodies.listed in the CML handbook, and should have prescribed professional indmenity insurance.

rita chawla

18:26 PM, 8th May 2015
About 4 years ago

Thanks a lot everyone, that is v reassuring as the place definitely seems good in other aspects. we definitely have building control approval as i have been forwarded a copy of that. probably i need to consult a different broker. i will also check if the seller can pay for the professional certificate.

rita chawla

19:17 PM, 8th May 2015
About 4 years ago

do any of you have an idea how much a professional consultants certificate for a 1 bed flat might cost? e.g. are talking about £200-500 or more like £1-2k? thanks

21:53 PM, 10th November 2015
About 3 years ago

I've recently built a house with the intention of a family member living in it. The property was designed by my father in law who is a retired architect. Unfortunately due to unforeseen circumstances we now need to sell the property. We did not have any inspections by NHBC, only by building control.
Is there any way we can get retrospective cover for the sale of the property?


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