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Competition and Markets Authority to review new-build warranties

The Competition and Markets Authority is to review the operation of new home structural warranties issued by the National House Building Council.

Around 1.6m homes in the UK have the warranties - around 80 per cent of the new homes built in recent years.

The undertakings surrounding the warranties were given in 1995, following an investigation by the now-defunct Monopolies and Mergers Commission which found that some NHBC rules restricted competition from companies looking to offer alternative warranty schemes.


As a result, NHBC amended its rules to remove the restrictions and enable its members to use other warranty providers. It also agreed not to make any further changes to its rules which might have an adverse effect on competition without written consent from the competition authorities.

The NHBC has now requested that the Competition and Markets Authority review the undertakings. It argues that there is now more competition from other providers and that housebuilders purchasing new home structural warranties now have greater choice. 

The NHBC also says that changes to regulation and consumer protection have removed the need for it to approve other home warranty schemes used by the NHBC’s registered builders - as it is currently required to do by the undertakings.

The review will look at how the market for new home structural warranties currently operates to protect home buyers in order to see if there has been a change in circumstances which would justify the removal or variation of the undertakings.

Earlier this week the CMA turned down a request by a lettings sector ginger group, the Fair Fees Forum, to conduct an assessment of letting agents’ fees.


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