SPECIAL FEATURE: Understanding Buildmark can be as easy as ABC for conveyancers – NHBC

SPECIAL FEATURE: Alison Garner at NHBC has written an article, which looks at understanding Buildmark and how easy that can be for conveyancers.

As a conveyancer, you are a key part of the home buying process and an instrumental part of a buyer’s journey, which can be stressful but ultimately rewarding when a buyer achieves home ownership.

So, whether you are working on behalf of a house builder or the buyer(s) of a new-build home, it is important to have knowledge of the policy, and how you can use our systems to fulfil your responsibilities to your client.

Alison Garner, Head of Customer Services at NHBC, said:

“The Buildmark warranty is a fantastic way to reassure anyone buying a new-build property of its quality. And it can be a benefit many buyers aren’t aware of.

“But as part of the purchase journey the conveyancer has a requirement to activate the warranty for the homebuyer which generates the policy documents and ensures that customers are informed of the cover that is in place for their property.”

There are two types of Buildmark warranty: Buildmark and Buildmark Choice.

Buildmark is a ten-year warranty and insurance policy for privately owned houses. Buildmark provides deposit protection cover to the buyers of new-build homes from exchange of contracts or missives, with further cover accessible on legal completion of the sale. If you are acting for the purchaser, it is your responsibility to activate the policy on their behalf at these key stages as part of the purchasing process.

Buildmark Choice is designed for new-build and newly converted homes in the rental market whether that is in the affordable housing sector or the private Build to Rent sector, for example housing associations or retirement living. Buildmark Choice is automatically accepted when the final inspection is signed off. The certificates are sent directly to the developers, and it does not need to be activated by the conveyancer.

It is important to stress that the Buildmark warranty can still be accessed by the homeowners during and after the purchase if the conveyancer does not activate it. As part of the Insurance Distribution Directive NHBC is required to send proforma packs to homeowners’ in-between reservation and exchange. This means that homeowners will always receive Buildmark warranty information.

However, it can mean that the buyer(s) is not aware of key information as early as they could be. That’s why being aware of and activating Buildmark for them is a great way to make the process of buying a new home simpler and more convenient for your customers.

Buildmark is a joint agreement between registered builders and NHBC to provide warranty and insurance protection on new build homes. It currently protects around 1.5 million homes in the UK.

Buildmark provides the first purchaser of the home with pre-completion cover for builder insolvency between exchange of contracts and legal completion. Then, once the home is complete, it provides a two-year builder warranty period (supported, where appropriate, by our Resolution Service) and after that, a further eight years insurance protection against certain defects, including cover for alternative accommodation and contaminated land.

And it can be extremely reassuring for your customers to know that Buildmark protects 10% of the full purchase value or £100,000, whichever is less under Section 1 cover. After all, for most people a new home is the most significant purchase they will ever make.

So, while the activation of the Buildmark warranty may seem complicated, it is simple and can be easily remembered as ‘ABC’:

A: Access – access the conveyancer’s portal. This is available now at nhbc.co.uk/homeowners/conveyancing-portal

B: Buyers details – add or update these as the purchase progresses

C: Certificates – these are issued and held on the conveyancer’s portal for up to 15 years.

Additional protection is provided for buyers of new homes through the Consumer Code. The Consumer Code for Home Builders, effective from 2010, is an industry led scheme which gives protection and rights to purchasers of new homes, ensuring that they are treated fairly.

This applies to all Home Builders registered with the UK’s main new Home Warranty Bodies including NHBC and will continue to protect most new homes that will be reserved and purchased during 2022.

There is also a new Code of Practice coming in soon, from the New Homes Quality Board (NHQB) who are an independent not-for-profit body created to develop a new framework to oversee reforms in the build quality of new homes and the customer service provided by developers.

For those developers and builders that have registered with the NHQB and activated during October 2022, the new Code of Practice will now apply to the homes reserved after the builder’s activation date.

So, to help conveyancers understand more about consumer protection and be clear on the process to ensure their client is informed about the warranty and insurance protection available to them at each stage, NHBC have created a helpful webinar.

As Candis Collins, Technical Trainer for NHBC, shared:

“We were pleased to find our first webinar in November fully booked. This just shows conveyancers keen interest in understanding more about the Buildmark warranty and how to activate it to give their customers the best possible experience.

“We’re delighted to be running the webinar again in February for any conveyancers who could not attend the first one.”

Join us for our second Buildmark Warranty – A Conveyancers Guide webinar on 15 February 2023 to learn more about:

- how Buildmark protects the buyers of new-build homes
- and up-to-date information on what conveyancers need to do to ensure the policy is activated at key points.

To secure your place on this popular webinar register here.

You can also download a free guide for conveyancers here.