Obtaining a mortgage for residential properties is already a complex process, involving a long list of requirements set forth by the mortgage lender. But what happens when you throw in the lack of a building warranty into the mix? It’s a question that both financial lenders and prospective homeowners must grapple with. This article will delve into what a building warranty typically covers, why they are important, and what alternatives are available if you’re considering a house purchase without one.

Damian Youell

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The Importance of Building Warranties

Typically, a 10-year structural warranty is provided by warranty providers to protect against structural defects in the building construction. Granite Building Warranties and other warranty products offer security against structural issues that could compromise the financial stability of your investment. The warranty documentation usually includes coverage for load-bearing parts of the building, weather damage, and even accidental damage in some instances.

Building control oversight is essential during construction, with several building control stages that must be satisfied before a building regulation completion certificate can be issued. Even so, not all building companies offer warranties. In such cases, a Professional Consultant’s Certificate might be considered sufficient for the mortgage provider. But is it adequate?

Mortgage Types and Providers

Whether you’re exploring First-time buyer mortgages or Buy-to-Let mortgage options, mortgage companies assess the risk associated with the mortgage loan. The type of mortgage—be it a capped, collar, or combined mortgage—will affect the terms and conditions attached to it. Each mortgage provider might have their criteria for what forms of warranty they require or accept.

Dangers of No Warranty

Opting for a mortgage without a building warranty adds an additional risk. While a structural survey might indicate no immediate concerns, latent structural issues may surface later on. Without a warranty, the responsibility of addressing these issues falls on the homeowner, leading to additional costs like construction costs, legal costs, and damage to fixtures.

Water damage, for instance, is a common problem that develops over time, and without comprehensive cover, the cost of repairs can be astronomical. Housing schemes that include warranty cover generally have a period for action and a defects insurance period, offering a safety net for homeowners. This isn’t the case with a house lacking a warranty.

Alternatives and Solutions

Retrospective Warranty

If the building is relatively new but does not come with a warranty, some companies offer a retrospective warranty. CRL Structural Defect Insurance is one such option. However, be prepared for additional paperwork and possibly higher premiums.

Professional Indemnity Insurance

Some mortgage companies may accept a professional indemnity insurance policy from the builder as a form of assurance against structural defects. However, this comes with its risks. Builder liability may not cover all potential issues, and there might be a limited developer liability period.

Indemnity Schemes

Building standards indemnity schemes can sometimes act as an alternative to a structural warranty. This can be an option if you’ve received building regulation consent but not a full building regs certificate.

The Mortgage Application Process Without a Warranty

Applying for a mortgage without a warranty will involve a bit of paperwork and might require the intervention of a mortgage broker skilled in such niche transactions. Mortgage products that accommodate for the lack of warranty often come with higher interest rates to compensate for the extra risk. Rates may vary, so it’s essential to compare current rates and perhaps consider mortgage transfers if your current mortgage lender doesn’t offer favourable terms.


Opting for a mortgage without a building warranty is undoubtedly a path less travelled, filled with extra costs and risks. While it may be suitable for cash buyers or those willing to take on the additional risk, it’s not for the faint-hearted.

The lack of a warranty adds a layer of complexity to the mortgage process, but with due diligence and perhaps a little help from mortgage professionals, it’s not impossible. When the standard route is unavailable, knowing your options can offer some measure of security in an inherently risky venture.

By keeping abreast of building regs, consulting with Building Surveyors, and possibly investing in indemnity insurance, you can navigate the intricacies of acquiring a mortgage without the traditional safety nets in place. Whether you’re eyeing a brand-new property or a current house, make sure you understand the bits of house that could potentially become problematic down the line. Be prepared, be cautious, and most importantly, be well informed.

About The Author

mortgage broker damian youell

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Damian is an experienced mortgage broker, founder of NeedingAdvice.co.uk Ltd and company director. With over a decade working as a mortgage broker he has a strong understanding of hard to place mortgage cases. With hundreds of 5 star client reviews. hundreds of repeat clients his work speaks for himself.

He started NeedingAdvice.co.uk as a one man band with the philosophy of putting clients needs ahead of his own. This ethos of offering excellent customer service has helped the business grow over the years. He gets satisfaction on getting cases pushed through to offer stage where other mortgage broker and companies have failed.

Throughout his time as an adviser he has carved out a niche area of advice helping clients with their business protection requirements too. Having helped hundreds of client with Relevant Life Policies, Shareholder Protection Insurance, Keyperson Policies and other important protection requirements of large to small businesses.

At home he is a family man and likes to spend his time with his four children and wife Lisa. He enjoys going on holidays spending time with friends and going for walks.