The challenge and opportunity of 15-year structural warranty

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

Significantly, it also includes provisions that could make structural warranties legally mandatory, and mandate that those warranties are a minimum of 15 years.

This would be the first time that structural warranties would be mandated by law, and the 15-year minimum is a five-year extension over the typical length of warranty currently issued.

At the same time, the effective retroactive liability period of the Defective Premises Act will be extended to 30 years.

While these changes, and proposed changes, have not been covered in the same depth as other changes brought in by the Building Safety Act, they have the potential to carry significant effects for the housing industry.

Building, working in partnership with LABC Warranty, asked the housebuilding industry itself and a panel of industry experts to shed light on how they feel about the proposed changes, and how these might impact the sector.

Homebuilders react

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.

Gathering 270 responses from their audience of homebuilders, developers, social housing providers, contractors, self-builders and more, the survey indicated that while the sector was largely unaware of the possibility of minimum 15-year structural warranties, they were cautiously optimistic about their introduction.

The majority of those in the housing industry are unaware of the potential for minimum 15-year structural warranties to be introduced by law

In particular, the positive aspects focus on how the changes could increase the standards of new homes, and increase the confidence that residents have in their new-build homes. However, this cautious optimism comes with a number of concerns about how the changes could affect a sector already struggling with inflation, labour shortages, economic uncertainty, and other cost-related issues.

Experts weigh in

Some of the concerns and uncertainties are shared by experts from the manufacturing, regulatory, legal and consulting fields.

They included respondents from Local Authority Building Control, quality experts from Hill, Calfordseaden, Watson Farley & Williams, and the Construction Products Association.

Speaking to Building in their capacity as experts in their respective fields, they shared their opinions on how the changes would affect the housebuilding industry.

Some of the potential negative and positive outcomes for the change are couched in the knowledge that there is a great deal of uncertainty around the topic right now.

This cautious optimism comes with concerns about how the changes could affect a sector already struggling with inflation, labour shortages and economic uncertainty

One of the key concerns is cost, with one expert discussing the possibility that the increased cost would be disproportionate compared with the benefits of enhanced protection.

In fact, some experts speculate that the cost, even with the promise of enhanced protection, could drive prices high enough to price more buyers out of the market.

Of course, it’s not all bad – many of the experts believed that the net outcome for residents would be an increase in standards and protections.

Explore the findings

Read on across the course of the next week for more in-depth coverage of the results of LABC Warranty’s survey, and more reflection from industry experts on how minimum 15-year warranties may affect the housebuilding industry.