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We look at some of the most common questions posed to our underwriters about plot purchases on large new developments.

Q: My clients are purchasing a property on a new-build development, but their lender is refusing to offer a mortgage because the roads have not yet been adopted by the local authority. Can you provide a policy to offer the lender protection, should the developer go out of business?

A: Yes – our Adoption of Road policy is designed for exactly this scenario. In fact, we’ve seen an increasing demand for this type of cover, as more homeowners are taking possession of a new-build property, before the rest of the building works and the supporting infrastructure are completed on large new housing estates. 

This is where our policies can help. In the absence of a Section 38 agreement (for the adoption of roads), our cover protects insured homeowners from future demands by the local authority for a financial contribution to bring the roads to adoptable standards, if the developer goes out of business. Policies protecting the buyer, the lender, and successors in title start at £127. Alternatively, a cheaper option, covering the lender only, is available from £90.

Q: Is there a similar policy available when the sewers have not yet been adopted on a new-build development?

A: Absolutely, our Adoption of Sewers policy provides cover for the same scenario, but where the section 104 Agreement (the adoption of sewers) has not been completed with the local water authority. Again, our cover protects homeowners from future demands by the local authority if they seek a financial contribution to bring the sewers up to standard because the developer has gone out of business. And as with our Adoption of Road policy, cover can be provided for the buyer, lender, and successors in title, or as a lender-only policy. Premiums start at £90 too.

We also have a combined Adoption of Road and Sewer policy available for situations where both the Section 38 and the 104 Agreements are absent.