Assetsure News 28th September 2007
Homeowners Staying Put
It is being reported that more and more homeowners are deciding to stay in their existing property rather than move and face the prospect of a larger mortgage, higher interest rates, and the expensive costs of moving. The recent scare involving Northern Rock has made many people think twice about borrowing money and many homeowners are now deeply concerned about the costs of borrowing rising steeply. In recent years, money for a mortgage has been fairly easy to obtain and many people are already over committed and the prospect of borrowing even more moving seems daunting.
Recent figurers released by the Halifax indicate that moving home in the United Kingdom costs at additional £4700, in London; this amount rises to an astronomical £12,700. These figures include such things as legal fees, stamp duty, estate agents fees etc but exclude the extras associated with a newer home such as increased insurance costs and heating bills, council tax and of course the associated maintenance costs of running a larger property.
Many people are now sitting down, doing their sums and working out that what they can achieve by moving is simply not worth the effort and additional expense. More and more homeowners are now coming around to the way of thinking that making the best of your existing property is the way forward, at least in the short term. Loft extensions are the most popular and even in London, altering your building to include extra space in roof, can be achieve for less than £40,000, often this is the cheapest and most cost effective way forward
However, latest thinking is to actually redesign the home so it can suit the family that stays together longer, whatever their age and lifestyle. More and more young adults have to stay at home longer with parents as they save up for a deposit on a mortgage. Some architects are advocating changes to the internal structures of homes, even with separate doors so as people can come and go as they please without having to disturb the other occupants. Some parent are even considering, splitting their own homes in to flats, so as each family member can have his or her own area. If you own your own home, this alteration (subject to planning permission) can be achieved quite cheaply. The cost of the extra plumbing, electrics and sound insulation may only set you back around £25,000, this compares favourably with the cost of moving and the additional expenses mortgage costs.
Many homeowners are also examining the internal layout of their buildings and are seeing if there is anyway that they can obtain more space, often an outside opinion can spot things which are overlooked,.
If you are intending making structural alterations to your buildings, homeowners are reminded that you should first check the terms and conditions of your home insurance policy. Many insurance companies, have an exclusion preventing you carrying out building work or alterations without first seeking their permission, you may find that during the course of the building alterations, cover under your insurance policy is restricted.. If you are the owner of a listed building, you will certainly need to contact your local authority with detailed plans before any improvements can be made at your home.
Winters Coming-Time to check policy wordings
UK insurance companies are still counting the cost of the recent spate of bad weather insurance claims. Unseasonably bad weather in July & August meant that the UK insurance industry suffered heavy losses. Property owners are now being warned to check their buildings insurance polices carefully to make sure that they have adequate flood insurance protection in force before the winter months and the threat of more bad weather, particularly storms increases.
Policyholders should check their levels of cover and make a note of the renewal date so as the policy does not lapse in error. Insurance Companies and brokers should release your renewal notice to you 21 days prior to the renewal date, however, many property owners have found that papers become lost in the post and they end up with no protection. The onus to make sure cover is in force and to satisfy any mortgage lenders conditions is on the policyholder, not the insurer. Policyholders are also being urged to check sums insured, many have not been reviewed in years and whilst, index linking applies to almost all home insurance polices, many commercial building insurance polices have no form of sum insured uplift at all. Be careful, if you are underinsured and suffer a loss, you may find that your insurance company, applies' average" to your claim.
More and more parts of the United Kingdom that have previously only suffered minor flooding damage are no seeing a large increase in damage and the severity of damage and insurers fear that this winter could see record claims being made. Homeowners without insurance protection are being urged to take out a policy as quickly as possible, there has been much talk about properties situated in flood areas and the general feeling is that if you already have a policy and the area floods, your insurer will probably continue cover for you. However if your home or business is situated in an area that floods this winter and you have not already purchased cover, you may find it hard to do so.
Whilst many policyholders remember to insure their building against a wide range of insurance perils, many commercial property owners forget or are simply not aware that business interruption cover, or loss of profits cover is available to purchase. In the event of claim for a flood ( or any claim for that matter, the building insurance policy will pay for the reinstatement of the property. But what would be the situation if you ran a business from the property and the remedial work took three months to complete. How would your business suffer a downturn in business for three months. The reality of the matter is that whilst your profits would undoubtedly be hard hit, many of your business costs such as rates, wages & service charges would continue.
Business interruption cover will help to pay for your loss of profits whilst your business is closed and you are getting back on your feet. Whilst most modern commercial building insurance polices do include this cover as part of it's core wording, many offer it as an optional extra. If as a policyholder, the covers are not explained to you fully you may overlook to include this vital cover.