Do Houses with NHBC Cover Need a Survey?

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The NHBC guarantee warranty, along with the Buildmark policy, cover specific areas of defects and usually operate on a minimum value basis. That is to say a defect, if accepted as such, will need to reach the minimum value in terms of costs before the policy is activated - the policy document will state what this is. The policy does not generally cover wear and tear, neglect or failure to carry out the appropriate maintenance. It does not cover later alterations carried out after the original completion date or any items agreed at the outset with the first owner which may have resulted in a reduction in asking price.

The NHBC covers up to 10 years and so the closer you get to the term end, the higher the risk of matters changing in the property through general use. That being said, the limitations of the cover to more serious aspects leaves a potential gap in the protection for the new buyer as not all defects are reported for fear of the claim process and property devaluation. It is not advisable to begin a claim from a point of recent ownership when this may have been detected prior to purchase by the action of a survey. Given the age of the property, at a maximum of 10 years under standard NHBC cover, a Homebuyer report should be perfectly suitable for this.

The advantage of the report is that it is proactive in the sense of identifying any significant or less significant, but nonetheless costly, defects before any commitment to purchase is made (other than the acceptance of an offer to purchase). This is irrespective of the NHBC cover and anything found can then be resolved from a position of  negotiation and possible cost reduction - rather than trying to resolve this after purchase which, in the worst case, could prove costly.

Standard heating and electrical tests could also be due if a rental or coming to the end of the 10 year term, so these could be confirmed as part of the report process. 

In my view, the cost of the average Homebuyer report against the cost of the property to the potential legal wrangle on any unidentified defects is not worth the risk. 

We have often been instructed to inspect newly built properties prior to hand over, and even in these cases whilst no significant defects were found, unfinished items were identified which would have left the buyer to resolve from the weaker position as an owner, rather than prospective purchaser.

Completion of all items was agreed with the contractor and actioned prior to purchase, thereby saving the buyer time and administrative effort to resolve. In this type of situation with brand new properties, a Condition Report is usually adequate. 
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Gary Scott, Scott Architectural

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Gary Scott

Scott Architectural

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