UK Finance produces new guidance for warranty providers

Written by Protek Warranty. Posted in Construction, House Building

UK Finance has issued new guidance for warranty providers setting out the standards its members typically expect from a new build home warranty provider. 

The guidance is welcomed as it removes uncertainty for developers, stops loopholes being exploited and affords better protection to consumers.

It outlines the technical standards and cover requirements. However, importantly it now requires an annual attestation, so if there is any variation in the overall standard cover, including named insurer(s), credit rating, directors or ownership, lenders must be notified.

Notification must also be made where the warranty provider stops writing new business, ceases trading or transfers aspects of their trading style to a third party.

The expectations set out in the UK Finance Warranty Guidance include:

• Full details of the named insurer(s) and their credit ratings
• The named insurer(s) must be FCA registered, covered by the FSCS and be a member of the Financial Ombudsman Service
• The new build element is built to Building Regulations and will have Building Regulations certification
• A final inspection of each complete property is carried out to confirm that it is finished such that it can be occupied by the borrower(s)
• Minimum cover of 10 years
• Warranty cover is automatically extended to all subsequent homeowners
• Where the buyer is not protected by a consumer code directly with their developer then the warranty provider is expected to offer a warranty linked consumer code. This must be CTSI, Level 2 approved.

To find out more about how a lender approved structural warranty protects your project please visit our lender approved warranty provider page.