The Role of Retrospective Defects Insurance: A Bridge to Property Sale

Build Warranty Group wrote in August 2023 that anyone selling a property built in the last decade may struggle without latent defects insurance, because mortgage lenders increasingly insist on structural warranty cover. Without it, the firm said, buyers can find it hard to obtain a mortgage and sales can stall.

It presented retrospective defects insurance as the remedy. Before such a policy is issued, a structural survey looks for existing problems, which can then be put right or excluded from cover. The cover applies to new builds, conversions and major refurbishments, including houses, flats, bungalows and barn conversions completed within the past ten years.

The firm distinguished a monitoring service, used before building starts, which involves inspections during construction and interim certificates that release staged payments from lenders, from a retrospective service for finished buildings, which involves a single inspection after completion. Providers must pass audits by insurers before they may certify completed properties, and Build Warranty said its technical services division inspects finished homes and reviews building records. It argued that this route lets owners avoid being stuck as mortgage prisoners and complete their sales.

Source: Build Warranty Group, original article (16 August 2023)