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Saving For a Space Ship

New homes warranty firm pays millions to leading homebuilders  

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New homes warranty firm pays millions to leading homebuilders  



The organisation that provides warranties for most of the new homes in Britain is paying millions of pounds to the leading housebuilders every year, raising questions about its independence and credibility amid a wave of complaints about the quality of new-build properties.


NHBC, the standard-setting body and main home construction warranty provider for new builds in the UK, is paying around £10m to £15m every year to housebuilders through what is effectively a profit-share agreement. The largest firms can receive as much as £2m from the scheme, because it rewards the developers who registered the most homes with NHBC.


Campaigners said the revelation shows that NHBC is on the side of developers rather than consumers and that the lack of protection for buyers of new homes is a “scandal”.


A senior industry source said the annual payment to the housebuilders was a way to keep them “sweet” and ensure they remained NHBC customers. The source also said that the system is open to abuse, and there were at least two occasions since 2010 when a major housebuilder asked for an extra or increased payment which was approved by NHBC.


The questions about the credibility of NHBC, which claims to have an 80% share of the warranties market, will also be a headache for the government, which is poised to launch its housing white paper this week.



Edited by Saving For a Space Ship

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