Buying a new build property to let may seem like a simpler insurance proposition than an older property — no unknown history, no ageing wiring, no subsidence from century-old foundations. In practice, new builds have their own specific insurance requirements, and getting them right from day one protects both the investment and the rental income from it.
What Landlord Insurance Covers on a New Build
A landlord insurance policy for a new build covers the same core risks as any other residential buy-to-let — the difference lies in how each element applies to a property that is newly constructed and being let for the first time.
Buildings cover protects the physical structure against the standard insured perils: fire, lightning, explosion, storm, flood, escape of water, theft, subsidence, and impact. For new builds, subsidence risk is generally lower in the early years, though developments on clay-heavy or filled ground are not immune. The sum insured must reflect the full rebuild cost, not the purchase price — we cover this in detail below.
Property owners' liability covers your legal liability to tenants and visitors for injury or property damage caused by conditions at the property for which you, as landlord, are responsible. The usual minimum is £2 million; we typically recommend £5 million.
Loss of rent protects the rental income you would have received if the property becomes uninhabitable following an insured event. For a new build being let for the first time, this is particularly relevant — any significant damage early in the tenancy could disrupt your income before the property has had time to establish a track record.
Optional extensions including accidental damage, malicious damage by tenants, legal expenses, and terrorism cover are all available and worth considering depending on the property and its location.
For a full overview of cover options, see our residential real estate insurance page.
Structural Warranties: What They Are and What They Don't Cover
Most new build homes come with a 10-year structural warranty from an approved warranty provider, and many landlords assume this removes the need for buildings insurance. It does not. A structural warranty covers major defects arising from the builder's failure to meet defined construction standards — it does not cover fire, flood, storm, theft, escape of water, or any of the standard insured perils that a buildings insurance policy addresses. Your mortgage lender will require buildings insurance from the point of exchange regardless of any warranty in place. The two products do different jobs and run concurrently, not as alternatives.
Getting the Sum Insured Right
The sum insured must reflect the full rebuild cost — not the purchase price and not the market value. This is the most common source of underinsurance on new builds. The rebuild cost covers labour, materials, demolition, site clearance, professional fees, and compliance with current building regulations, all of which are influenced by construction costs rather than land values or market demand.
RICS-based rebuild cost calculators are available for this purpose, and the ABI and RICS jointly publish guidance on reinstatement cost assessments. Underinsurance exposes you to proportional claim settlement: if the building is insured for 70% of its correct rebuild cost, the insurer may settle claims at 70% of their value, leaving you to fund the remainder personally.
New Build Flats: Leasehold Considerations
The majority of new build flats are sold on a leasehold basis. For leasehold properties, buildings insurance responsibility typically rests with the freeholder, not the individual leaseholder. If you have purchased a new build leasehold flat as a buy-to-let, confirm who arranges the buildings insurance, obtain a copy of the schedule, and arrange your own contents and leaseholder's improvements insurance separately. Most insurers will automatically note a mortgagee's interest when the policy is set up, though on larger programmes with multiple lenders this is worth verifying directly with the managing agent or insurer.
For newly completed blocks, the freeholder's initial insurance is often placed through the developer's associated managing agent without being market-tested. This is worth reviewing at the first service charge reconciliation.
When to Start Your Landlord Insurance
Buildings insurance should be in place from exchange of contracts, not completion. At exchange you are legally committed to purchase; if the property were damaged between exchange and completion you could be obliged to complete on a damaged building with no cover. Most mortgage lenders make buildings insurance from exchange a condition of the offer.
Between completion and the first tenancy starting, the property will be unoccupied. Check your policy's unoccupancy terms — many policies impose additional conditions after 30 consecutive days of vacancy — and ensure cover is not reduced during this period.
Frequently Asked Questions
Do I need buildings insurance if my new build has a structural warranty?
Yes. A structural warranty covers major construction defects but does not replace buildings insurance. Your mortgage lender requires buildings insurance from exchange of contracts regardless.
Is a new build cheaper to insure than an older property?
Not necessarily. New builds carry lower risk for certain perils, but the rebuild cost, location, property type, and tenancy arrangements all influence the premium.
My new build flat is leasehold — do I need to arrange buildings insurance?
Probably not, but confirm this in your specific lease. If the freeholder is responsible, ensure the policy is in place, covers the full reinstatement cost, and notes your lender's interest.
New Build Landlord Insurance: Getting It Right from Day One
The point of purchase is the best time to structure landlord insurance correctly for a new build. Getting the sum insured right, ensuring cover starts from exchange, and addressing the gap between completion and the first tenancy are all decisions that shape your protection for years to come.
For landlord insurance new build UK requirements, Taurus Risk Management works with landlords across England and Wales on purchases, portfolio additions, and buy-to-let investments of all sizes.
