News story

CMA accepts NHBC undertakings on structural warranties

The CMA has accepted new undertakings from the NHBC on structural warranties, an insurance that protects against potential defects in new buildings.

Hard hat in construction

These replace previous legally binding assurances (known as ‘undertakings’) that were originally given by the National House Building Council (NHBC) in 1995.

As part of a recent review, the Competition and Markets Authority (CMA) found that although competition in the market has grown and house builders are now purchasing some of their structural warranties from a range of suppliers, the NHBC has retained a very high market share compared to its competitors.

These revisions will bring the undertakings up to date and protect, and encourage, growing competition in the structural warranties market. They oblige the NHBC to display clearly on its website that builders who are members can source structural warranties from both the NHBC and other providers, or from another provider alone.

Given regulatory developments, these changes also remove any requirement on the NHBC to oversee warranties provided by its competitors.

The new undertakings replace the previous undertakings and will remain in force for 15 years. They can be viewed on the case page.

Published 5 December 2017