How much does an affordable housing structural warranty cost?
As a rough guide, around 1% of the rebuild cost for new homes registered before work starts, and around 1.25% for conversions or schemes already under way (with no broker fee on top - we are paid by commission from the provider). Here is what drives the price and when it is paid.
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The rule of thumb
Warranty cost as a percentage of the rebuild cost
Most schemes come out at a percentage of the rebuild cost - what it would cost to build the homes again, not their sale value or the scheme's gross development value. The figure covers the insurance premium and the provider's technical inspection and administration fees (with no broker fee on top - we are paid by commission from the provider).
For example, 30 affordable homes with a total rebuild cost of £4,500,000, registered before work starts, would typically come to around £45,000. If the same homes were already under way, expect nearer £56,250, and an office building converted into flats with a rebuild cost of £2,000,000 would be around £25,000 (with no broker fee on top - we are paid by commission from the provider).
These are indications, not quotes. The warranty provider sets the price once it has reviewed the scheme. Minimum premiums and fixed inspection fees can push a small scheme to a higher percentage, and extras such as deposit protection on homes sold off plan add to it. Your quotation shows every part of the cost separately.
What affects the premium
What providers price an affordable housing scheme on
- Rebuild cost of the homes - the starting point, as the percentages above show
- Number of homes and phasing - larger schemes spread fixed fees over more homes
- Build method - traditional masonry, timber frame, modular and panelised systems are priced differently, as are taller blocks, podiums and basements
- Ground conditions - previously developed and former estate land can need more investigation
- Stage of the build - registering before the start is usually cheapest
- Track record of the developer and contractor, including with the chosen build method
- Extras, such as deposit protection on homes sold off plan
What you pay
What a structural warranty quote is made up of
Every quotation sets out each part of the cost separately, which makes it easier to take through your own approval process.
Insurance premium
The cost of the cover itself, set by the warranty provider or insurer, plus any tax that applies to it.
Technical inspection fees
The provider's charge for reviewing the design and inspecting the work at key stages of the build.
Administration and our fee
The provider's administration fee, where it charges one. There is no broker fee to pay. We are paid by commission from the warranty provider, which is included in the premium.
When fees are payable
Most providers ask for payment when the scheme is registered, before work starts or before cover begins. Phased schemes can often be paid phase by phase as each one is registered. Retrospective cover is usually paid in full before cover is confirmed. Your quotation says exactly what is due and when.
Example scenarios
How the price changes from one scheme to another
These are illustrations, not quotes. All the percentages are of the rebuild cost (with no broker fee on top - we are paid by commission from the provider).
24 homes for social rent, registered before the start
Traditional construction on a cleared site, one contractor and one phase. Typically around 1% of the rebuild cost, with the premium and inspection fees shown separately.
Section 106 homes bought by a housing association
The developer registers the whole site before work starts, so the affordable homes come in at around 1% of their rebuild cost as part of the wider scheme. The housing association checks the cover will pass to it.
An office building converted into affordable flats
The provider may cover the existing structure as well as the new work, subject to a structural survey first and to its terms and exclusions. Expect around 1.25% of the rebuild cost.
Council homes started before a warranty was arranged
The provider needs evidence of the work so far and may ask for parts to be opened up. Around 1.25% for a build under way, and around 1.5% for homes already finished, where cover is available at all.
Ways to keep the cost down
- Bring the warranty into the design stage and register before work starts on site
- Have the ground investigation, structural design and construction details ready, especially on previously developed land
- Choose a build method and system the provider is comfortable with - we can tell you which
- On programmes of several sites or phases, ask whether they can be registered together
- Keep dated photographs and records of each stage, especially work that will be covered up
- Tell the provider early about design changes, tenure changes or a new contractor
Already on site without a warranty? See our sister brand Retrospective Warranties for cover after work has started.
Request an indication
Send us the basics of your scheme and we will come back with an indication of the likely warranty cost, with no commitment on your part.
- Takes under a minute
- Instant reply by email with your reference
- Insurer quotes usually within one working day of your completed proposal
- Schemes anywhere in England, Scotland, Wales and Northern Ireland
- Free and no obligation
Already filled in a proposal form? Email it to us or send it on WhatsApp with any drawings you have and we will take it from there.
