Mandatory 15 year warranties on new homes supported with caution

An LABC Warranty survey has found that while the majority of those in the housing industry are unaware of the potential for minimum 15-year structural warranties to be introduced by law, they are optimistic about the effects of that change.

The Building Safety Act, introduced in April 2022, brings generational change to the UK's construction industry. The Act introduces new regulations, enforcement mechanisms regulatory bodies, and enhanced powers for these regulators.

Significantly, it also includes provisions that will make structural warranties legally mandatory for the first time.

The survey, which drew responses from housebuilders and developers, designers, building control professionals, consultants, contractors, self-build, social housing provider, and homeowners focused on two aspects of the proposed legislation:

Minimum 15-year warranties. The legislation, if triggered by secondary regulations, would establish a new standard of 15-year minimum coverage for structural warranties. Currently, most warranties span 10 years, with certain exceptions.

All new-home coverage. The new legislation, if activated, would also make it mandatory for all new-build homes to be covered by a structural warranty. Presently, no statutory requirement mandates warranty coverage for new build homes.

LABC Warranty's survey set out to discover the awareness level for the above legislative changes, and the level of support these changes have among existing structural warranty customers and readers of their technical content.

The survey shows that:

• 64% of respondents were unaware of the proposal to extend the standard 10/12-year warranty term to 15 years.
• 53% were unaware of a proposal to make warranty cover a legal requirement for all new homes.

Despite this:

• 60% of respondents are in favour of extending warranties from 10/12 years to 15 years.
• 58% believe mandating warranties would lead to better standards of safety, or improved customer satisfaction.
• Overall, 40% believed there would be a positive outcome if all warranty-related secondary legislation came into force, 23% believed it would lead to a negative outcome, and 37% believed it would lead to a mixed result.

Only 5% of respondents said they had prepared for the secondary legislation to be enacted.

Reasons in support of longer warranty periods included improved standards (46%), better protection for homeowners (41%) and alignment with the Defective Premises Act liability period (10%). Lack of need (56%) and increased cost (37%) were the main reasons for those against.

Building control practitioners were most in support of the extended term (92%) while housebuilders/developers were most against (67%).

LABC Warranty commented: "Even respondents who offered a broadly positive outlook had reservations about potential negative effects of the legislative changes discussed. Given this and the strength of feeling shown through comments, LABC Warranty would describe the response as a very cautious optimism while we await more details on any upcoming secondary legislation."

This article appears on the CIAT news and blogsite as "Industry 'cautiously supports' mandatory 15-year warranties on new homes" dated September 12, 2023.

--CIAT

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