New build home insurance

There are many advantages when it comes to buying a new build home:

• You won’t be caught up in an onward chain or risk being gazumped

• Some off-plan developments give you the option to customise certain design features, such as the colour of kitchen units and garden landscaping

• There’s no need to redecorate or carry out repair works – just move your furniture in

• New build properties are typically built with energy-efficient features, including double or triple glazing and roof insulation, so utility bills might be cheaper

• Required safety features, including industry-approved door and window locks, keep your home protected – they could also reduce home insurance costs

• New builds usually come with a 10-year warranty.

While there are many benefits to snapping up a new build property, there are also some downsides to bear in mind.

• New builds tend to be more expensive to buy than older buildings because of their modern fixtures and fittings, and may quickly depreciate in value

• You may have to pay a fee to secure a plot of land for your home, which will be lost if you back out of the deal

• Construction work might get held up, for example by a global pandemic, and if the delays run on for too long, your mortgage offer could expire

• If you’re one of the first people to move in to an area of new builds, you could find yourself living on a building site for months

• New build sites can often be cramped to pack in more houses, giving you less external space.

The NHBC offers the Buildmark Certificate – a 10-year warranty for new homes and new conversions.

Under this, in the first two years your builder must rectify any defects resulting from the work it did, such as leaky windows letting in rain. But it is not responsible for issues caused by simple wear and tear.

Over the following three to 10 years, you will be covered for structural problems resulting from the build – which includes the roof, floor, staircases, windows and doors.

NHBC Buildmark also covers you if you’ve exchanged contracts and the builder goes bankrupt before your property is completed.

Not all builders register with the NHBC, so there’s no guarantee you’ll have a Buildmark Certificate. If not, ask your builder why they haven’t registered with the NHBC. They may have legitimate reasons – perhaps they’re a small company and can’t afford the fees – but it’s a good idea to find out what the reasons are.

If you still want to go ahead and buy the house, you’ll need to take out your own buildings and contents insurance for your new build. Remember, you should buy buildings insurance from the date you exchange contracts.

Yes, if you’re buying a newly converted property you may be able to get a Buildmark Certificate. This will give you reassurance that you’re protected if problems crop up in the future.

But be aware that on conversion properties, Buildmark will sometimes add exclusions to the cover – these will be printed on your insurance certificate.

Yes, the Buildmark Certificate covers the property, not the owner, and is fully transferable during the lifespan of the certificate. So, whether you’re buying or selling a home with a Buildmark policy that’s still in force, the new owner benefits from any remaining cover. Ideally, the policy documents should be handed over on completion.

The most Buildmark will pay out is the original purchase price of the property, as shown on the insurance certificate, up to a maximum of:

• £1 million for a newly built home (up to a maximum of £25 million for all homes in a continuous structure);

or

• £500,000 for a converted home (up to a maximum of £5 million for all homes in a continuous structure).

The limits are increased by 5% of the original limit on each completion date anniversary, to allow for inflation. Buildmark then deducts any amount it has paid, or is going to have to pay, for claims it has accepted. You can see full details in the Buildmark Policy Document.

If you end up in a dispute with your builder or new neighbours, legal expenses cover could prove useful. This optional extra can be added to your home insurance (for an extra cost) to protect you against legal costs relating to living in your new home.

Most legal expenses policies also include a 24/7 legal helpline, which could advise on other legal matters, such as personal injury claims, employment disputes and tax matters.

If you do opt for legal expenses cover, check the terms and conditions carefully before you buy, so you know exactly what you’d be covered for and whether it’s worth the extra cost.

New builds are often cheaper to insure than older properties. This is because they’re usually built with high-standard safety features, so there’s less risk of a break-in.

A brand-new roof, wiring and plumbing systems also mean there’s less risk of making a claim on a new build than with an older house.

With that in mind, our data shows that a typical quote for combined cover on a new home built after 2021 is £149. Meanwhile, the same policy for an older home built between 1901 and 1930 costs around £224¹.

If you’re wondering how to get home insurance on a new build, it should be largely the same as for any other property. The only snag you might encounter is if you’re trying to get home insurance for a new build with no postcode.

When a new home is built, the developer or builder needs to contact the local authority’s planning department so a new address can be created. This is then officially registered with Royal Mail.

Problems can arise if your new home isn’t yet logged on the insurance provider’s database, but you can always try an alternative provider as it might have updated its systems more quickly.