HSBC updates policy on warranties for new build properties

HSBC has revised its policy regarding the acceptance of professional consultant’s certificates (PCCs) for new build properties.

Effective from 4th December 2023, the bank will now accept PCCs for newly built homes within developments comprising no more than 10 properties.

This change aligns HSBC’s criteria with several other high street lenders and marks a significant shift in its approach to new home warranties.

Previously, HSBC’s policy did not consider PCCs as an acceptable form of warranty for new build properties, except in cases of conversions without full structural alterations.

The new policy extends the acceptance of PCCs to flats and maisonettes within these developments, provided there is a PCC for the common parts and the structure of the building, if these are part of the new build or conversion works.

Conveyancers are required to ensure that the new home warranty, whether a PCC or a Structural Defects Warranty, meets the criteria outlined in the UK Finance Mortgage Lenders Handbook.

Nick Mendes, mortgage technical manager at John Charcol, said: “Another positive tweak to HSBC criteria allow for PCCs will be acceptable for newly built homes within a development of no more than 10 properties.

“Several high street lenders already accept PCC such as Santander, Halifax, NatWest, Barclays, TSB and Nationwide.

“HSBC’s latest move brings them in line with the market following a similar change earlier in the year when HSBC extended the maximum term to 40 years.”