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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 its 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.
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Copyright Assetsure Limited 2007
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