|
| Personal finance articles |
|
|
|
Can you trust a new build home?
By Laura Howard
With the exception of fine wines and antiques, most things in life cost more new than they do second hand - and it's no different when it comes to property.
While the premium on a new home is much lower than you would expect to fork out for a brand new car, house builders still hike up the price by between 10 and15 per cent on a comparable property that has previously been lived in, according to Ray Boulger at mortgage broker, John Charcol.
"There is some extra value in a new home as it comes with a 10-year warranty from NHBC (National House-Builder Council) and so it's perceived that the buyer will not have to pay out for decorating or repairs for some years."
But in practice, this would only be the case in an ideal world. An increasing number of buyers are finding that, far from kicking back and relaxing on the promise of a trouble-free new home, their lives have been blighted with problems from the day they moved in.
One such victim is Liz Wallen who bought a new apartment from Millgate Homes in Surrey, in the autumn of 2005. Soon after moving in, Mrs Wallen discovered large patches of mould on the walls inside the built-in wardrobes in the master bedroom, as well as smaller patches elsewhere around the flat. She complained to Millgate Homes but, despite being cleaned and repainted several times, the mould continued to return.
Liz's son, Richard Wallen took up the case on her behalf with Millgate Homes who carried out investigations. However, it found no problem with the building construction or design, both of which it said complied with building regulations. Millgate Homes concluded that the problem was a result of condensation.
The Wallens, along with several other apartment owners, then turned to the NHBC for an independent assessment of the problem. After a short investigation - "the results of which seem to have been pre-determined," says Richard - the NHBC also concluded that condensation was to blame. It agreed that the building construction and the design were compliant with regulations and therefore there was nothing that the NHBC needed to address.
Having discussed the issue with the NHBC, Richard learned that his mother's case seems to be a common one with new-build apartments due to Government pressures on builders to reduce carbon emissions. "It seems that minimum ventilation is specified to help reduce heating requirements. However one way to reduce condensation is a dehumidifier which of course uses power," Richard adds. The problem has not yet been resolved.
A widespread problem
The Wallens are not alone. In the rush to meet Gordon Brown's target to build three million new homes by 2020, concerns are mounting about the inadequacy of the land on which homes are built - for example flood plains or landfill sites - as well as the quality of the build itself.
According to New Build Inspections, which checks for faults in new properties, an incredible 93% of new homes reported problems in 2006 - up from 81% in 2000. Of these properties, more than a third show up between 100 and 200 defects, usually relating to leaks and plumbing.
So what is the purpose of the NHBC certificate? Basically, the NHBC certificate is supposed to serve as a 10-year warranty against faults occurring with new build homes. It only applies to homes built by builders or developers registered with the NHBC, which accounts for 85% of all new housing stock.
For the first two years after completion, the builder or developer will be responsible for rectifying any problems in the home which do not comply with NHBC's Technical Standards - for example faulty electrical wiring, flaking plasterboard, damp, paintwork or leaks. In this case, says the NHBC, a homeowner should contact the developer or builder and ask it to rectify the problem.
All very well but few homeowners are adequately equipped to spot these teething problems - known as 'snagging' - on their new property that must be registered within the first two years. This is why a growing number of homeowners are employing snagging companies, such as New Build Inspections, to carry out checks on their behalf.
If there is a dispute about the work that needs to be carried out with the builders, homeowners should contact the NHBC's independent Resolution Service, says NHBC spokesperson, Melissa Blamey. "This involves NHBC investigating the items and instructing the builder to carry out repair works where necessary."
Such was the experience of Allan Manning who bought a Redrow new build home in Pontypool in Wales back in 1997, that he still claims is built with substandard mortar. "My solicitor, who was working in conjunction with Redrow, advised me that is was not necessary to have the NHBC inspection before completing on the property so I signed. The NHBC confirmed that it had carried out the inspections three months later but did not need to enter the property to do so. However, due to irregularities with the name of the inspector and the date he was supposed to be in the area, I do not believe this inspection took place at all."
However, the NHBC says the nature of inspections will depend on individual developments. "While the inspection regime is an effective tool in reducing defects in new homes, it does not replace the builder's obligation to build in accordance with the Building Regulations and to maintain quality and standards on site," says Blamey.
'Buildmark' guarantee
The second part of the NHBC certificate, which is called the 'Buildmark' guarantee, covers your home from year three to year 10 and discounts the builder from further liability. During this time, the warranty covers defects relating to the structure of the home, as well as items such as double-glazing, staircases and wet applied plaster. If homeowners have any concerns during this period of cover, they should contact the NHBC direct.
But what if you don't buy your new-build home from a major builder or developer? After all, the last property-obsessed decade has given rise to more novice developers building just one or two homes, often on front or back gardens, in order to sell on for profit. In this case, as the builder is unlikely to be a registered member of the NHBC, buyers should look for other guarantees, such as indemnity insurance.
Harsit Nakarja is an underwriter and solicitor for online indemnity insurance provider, Titlesolv.com. At the end of February 2008, the firm launched a new insurance for small builders who are not members of the NHBC. "It can be time-consuming, complicated and costly to get registered with the NHBC but that does not mean to say a new build home is not to standard," says Nakjara. "Mortgage lenders looking for security on their loan are increasingly recognising alternative guarantees such as our New Homes Structural Defects insurance policy."
Nakarja says that the validity of this document could be seen to supersede an NHBC warranty in the eyes of both lenders and purchasers as it is backed by Zurich - a household name insurer with deep pockets.
If either the developer or NHBC have refused your claim, your own buildings insurance could still save the day. "The common initial 'settling' of new build homes, which can result in minor cracks around the windows and doors, would not be covered by buildings insurance but subsidence, landslip or heave - even if it is a direct result of substandard building or poor workmanship - could be covered," says Malcolm Tarling at the Association of British Insurers (ABI). However, the standard excess on subsidence claims is £1,000 so the NHBC should always be your first port of call.
Even if you are armed with an NHBC certificate, you should still retain a healthy sense of caution when buying a new home. Keep your wits about you when the certificate is being issued - and remember to keep your own photographs, notes and full records of any complaint or claims.
Useful links:
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View