Buying, selling and letting - May, 2007

Bought a new home? Now you need to look at insurance to cover your property, your possessions and your income, says Your Mortgage magazine.

You can now insure yourself against almost any eventuality. There’s buildings insurance, contents insurance, life assurance and critical illness insurance, with mortgage payment protection insurance (MPPI) covering your mortgage repayments if you are unable to work due to an accident, sickness or unemployment. As a home owner certain types of insurance are more important than others.

Buildings insurance

No lender will agree to give you a mortgage without buildings insurance. It is the responsibility of the freeholder to arrange this, so leaseholders don’t need to worry (except check it has been done). Your property is the lender’s security on the loan, so it will understandably want you to have that property insured against damage from fire, subsidence or heavy storms. Your lender will usually offer to sell you buildings insurance, though you may get cover cheaper elsewhere, but do bear in mind that if you take your mortgage lender’s insurance they have a vested interest in your property and therefore may be more amenable to covering your claim in full should the worst arise.
If you let your property out to tenants it is vital that you tell your insurer. It is unlikely that they will increase the premium but due to the wording of your contract the policy may become null and void if the property is not your primary residence.

MPPI

Mortgage payment protection insurance covers your mortgage payments in the event of your being unable to work due to accident, sickness or unemployment, and is also known as ASU. MPPI covers a combination of insurances. You may simply want the unemployment cover for your mortgage if you already have accident and sickness at work, for example. While about 50 per cent of new mortgage borrowers take out MPPI, only one-third of all borrowers have this insurance. This may simply be that the cover is not particularly cheap – many lenders charge around £5 per £100 of mortgage payment you wish to insure each month. But note that you may be able to find cheaper MPPI if you shop around.

Life insurance

When you take out a mortgage it makes sense to take out life insurance that would pay off your home loan in the event of your death. There are different types of life insurance:
Level term assurance: The most basic type. In return for relatively low monthly payments, the policy guarantees an agreed amount of life cover (also known as the sum assured) over a fixed term – often the mortgage period itself. It is often used to cover interest-only mortgages, where the capital owed remains constant throughout the mortgage term. The lump sum is paid out if death occurs before the policy ends. Term assurance has no surrender value after the policy has ended.
Decreasing term assurance: Instead of the cover staying at the same level it reduces over the life of the policy and only pays out if death occurs before the end of the policy. This type of cover is popular among those taking out repayment mortgages, as the sum assured reduces roughly in line with the amount of capital owed on the mortgage through time. So if death should occur before the period ends, the policy pays out a proportion of the sum originally assured, which should be enough to pay off the amount of the capital still owed.

Convertible term assurance: Can be converted into permanent cover after the original policy comes to an end, usually by buying whole-of-life- insurance or an endowment policy. You cannot be refused the right to take out a new policy, regardless of the state of your health, but there are a number of rules. You can't increase the sum assured when you convert; you must convert before your term assurance ends and the new premiums will be determined by your age and sex so they will be more expensive.
Renewable term insurance: Allows you to exchange your term insurance for another policy at the end of the term, irrespective of the state of your health.
Increasing sum: The sum assured increases during the policy’s life, usually by five to ten per cent per year and usually runs out when you reach the age of 65.
Family income benefit: Paid on a regular basis from the death of the policy holder until the end of the policy term. Policies are usually written in joint names so payments are made as soon as one parent dies. They are usually written to coincide with the dependency period of the youngest child (for example 18 or 21 years). Policies can be arranged that will pay a level income or an income that goes up by a predetermined amount each year.

Health insurance

If you are worried about falling ill and losing your income, think about critical illness cover (also known as the dread disease cover), which pays you a lump sum if you are diagnosed with a serious illness.
Alternatively, you could consider permanent health insurance, which will provide you with a monthly income should you suffer from a long-term illness or disability.

Accident, sickness and unemployment insurance (ASU)

Under Department of Social Security rules, home owners who bought their property after 1 October 1995 have to wait nine months before they receive help with their mortgage interest payments from the state; and even then they must be in receipt of Income Support or the JobSeeker’s Allowance, so their savings must not exceed £8,000. In addition, benefits only cover interest on the first £100,000 of the loan.
By taking out ASU insurance alongside your mortgage you can set the deferral period yourself, knowing that a proportion or all of your mortgage payments will be covered after a certain number of weeks or months (usually 30, 60 or 90 days) for a given period.
yourmortgage.co.uk

The market is slowing down, they say. But nobody seems to have told buyers in east London and Essex, where a wealth of high-quality new homes has charmed prospective purchasers. Johnny Turner finds the secret of eastern success.

In recent months the news has been downbeat. Slowdown, correction – whatever you want to call it – the only-way-is-up property market we have seen over the past decade looks to be on its way out as the pendulum swings the other way. There’s only one problem with this doom-mongering: buyers are still out there buying and developers are finding their schemes winning over just those purchasers the press has been intent on proving don’t exist. In east London and Essex, sales of new properties are strong and many developments are selling out.
One such scheme is Fairclough Homes’ College Fields, a collection of spacious bungalows. All of the three-bedroom bungalows have now been reserved and there are just three of the four-bedroom bungalows remaining for sale, as well as three-bedroom semi-detached and four-bedroom detached houses. These homes offer good sized bedrooms, well-equipped designer kitchens and private rear gardens.
Prices at College Fields start at £269,950. Find out more about this popular development by calling 0845 676 0165.

Fairclough is also selling the last of the homes at The Parks in Oxford Lane, in the popular commuter haven of Ilford. Of the 56 three- and four-bedroom town houses and 103 one- and two-bedroom apartments there are just a handful of town houses and 18 apartments left in the last section of the site to be completed.
The developer is offering the incentive of 15 per cent deposit paid, which would make quite a difference to a first-time buyer or even an investment purchaser. Apartments are priced from £163,950 and £189,950 for one bedroom and two bedrooms respectively. For more information contact 0845 676 0161. See what else Fairclough has to offer in east London and Essex, as well as elsewhere in the South East, by visiting faircloughhomes.com.
At The Maltings and Maltings Court, twin developments located in the market town of Witham, Bovis Homes has found buyers in a bullish mood. Contrary to the reported state of the market, The Maltings is now on the brink of a full sell-out. Indeed, phase two of Maltings Court, although released only recently, is going fast. The three-, four-, five- and six-bedroom homes at The Maltings and two- and three-bedroom properties at Maltings Court have been carefully designed to combine well planned accommodation with high-quality specification.
Their picturesque position, combined with convenience for commuters, make the developments ideal for busy professionals who need both an easy route into work and an evening’s respite from the hustle and bustle. Journey times from nearby Witham station into Liverpool Street are approximately 45 minutes.
A select range of houses is available, priced between £194,950 and £394,950. Call the marketing suite on 0845 230 3332 or visit bovishomes.co.uk.

In Bow, a very happening corner of east London, Berkeley Homes has only a few apartments left to sell in the first block of Bow Central. One one-bedroom apartment is still available, priced at £175,000, as well as five two-bedroom apartments, each priced at £235,000. Purchasers will be moving into the highly contemporary gated development from next spring.
Proximity to the City, West End and Canary Wharf makes for a smooth transition between the work day and private time, while the low-maintenance aspect of the designs means the young professionals who tend to be drawn to this scheme won’t spend all their time looking after their home. Further, besides the high spec and great location, buyers are particularly impressed by two attributes that are rare in London: outdoor parking and private gardens.
Buyers should be quick, as the last few apartments won’t hang around. Call Berkeley Homes on 020 7321 2122.

Battersea, London

St George has announced that 80 per cent of apartments in its first phase at Battersea Reach have now been sold, thanks in part to the opening of a stunning new marketing suite and show apartment which demonstrate to potential purchasers exactly what it could be like to live on the river in such a convenient and attractive location. When complete, Battersea Reach will offer one-, two- and three-bedroom apartments and penthouses. For prices call 020 7978 4141.

Smithfield, London

Modern City Living is now selling The Spur, its luxury scheme of apartments in a vibrant part of the City. Located barely 15 minutes away from Soho and Covent Garden, The Spur will offer residents a buzzing atmosphere and lively nightlife as well as proximity to good transport connections: Farringdon station with its underground and mainline links is within a few minutes’ walk. Prices at The Spur start from £270,000 for a one-bedroom apartment. Call 020 7329 6313.

Dagenham, Essex

Bellway has released a wide range of two-, three- and four-bedroom houses at its Greenleas development following on from the sale of all 15 of its apartments in just ten days. House prices start at £185,000 for the two-bedroom Avondale, which boasts fully fitted kitchen, large living/dining room with French doors to the rear, en suite to the master bedroom and second bathroom and bedroom. Call 020 8517 8325 to find out more.

Tunbridge Wells, Kent

Silver Homes is currently marketing Saxonbury, a development on Forest Road, one of Kent’s most desirable locations. Carefully designed to reflect the surrounding Georgian architecture, Saxonbury comprises just two substantial and luxurious houses, each on a generous plot, within one mile of the town centre. Priced at £825,000, the houses are almost 3,300 sq ft in size and boast flexible living accommodation. Call selling agent Wood & Pilcher on 01892 511211.

Sevenoaks, Kent

South East Living’s latest scheme in Sevenoaks is Roma Court, where purchasers can make the most of both town and country worlds. Voted the ‘number one happiest place to live’ in a recent poll by Essex University, Sevenoaks offers excellent commuting options, beautiful countryside and a quaint and convenient town centre. Roma Court comprises four one-bedroom apartments, eight two-bedroom apartments and two two-bedroom penthouses. Call 020 8851 3938 for prices.

Romford, Essex

Persimmon Homes is celebrating after the spectacular unveiling of its show apartment and marketing suite at Cotton Park Gardens. The show apartment, which perfectly reflects the development’s style and design, boasts spacious lounge, two bedrooms, modern, open-plan kitchen with stainless steel integrated appliances and bathroom with both bath and shower. The developer is offering five per cent deposit paid on the scheme for purchasers able to complete within a four-week period. Call 01708 765014.

Thamesmead, London

Fairclough Homes has just opened a sales ‘pod’, incorporating a sales office and show home, at its Gateway development on Miles Drive in Thamesmead West. The one- and two-bedroom apartments, many of which have river views, are pre-wired for a home media network – ideal for home workers. Prices start at £199,995. The sales centre is open daily from 10am to 5pm. Call 0845 676 0162.

Brentford, Middlesex

The Island at Brentford Lock, a joint venture between Charles Church and Crest Nicholson, has now been launched to buyers. The development, as its name suggests, is surrounded completely by waterways and has been designed to maximise the appeal of existing features such as the lock and sluice themselves. All but a few of the apartments, houses and penthouses benefit from waterside views. Prices start from £269,950. For further details call 0870 758 1010.

Home Information Packs to go ahead

The Housing Act 2004 has now received Royal Assent, which means that from the introduction date of the new scheme anyone selling a property in England and Wales will need to compile a Home Information Pack (HIP) up-front for potential buyers when marketing their property.
This pack will include a Home Condition Report (HCR), all the required legal documentation, a lease copy and management records (if the property is leasehold) plus planning permissions and building control approvals for alterations and extensions. From January 2007, it will be illegal to market your home without a HIP.
The HCR needs to be produced by a government-licensed home inspector. Local chartered building surveyor Rund Partnership Limited, based in Locks Heath, will be among the first few home inspectors in the UK and will be expecting to introduce, in conjunction with local estate agents, voluntary schemes of pre-sale-surveys (i.e. home condition reports) in advance of the launch of the national scheme.
Stuart Parrett, director of the new scheme at Rund Partnership Limited, states that ‘this act is the result of consumer pressure to provide a level playing field when buying and selling homes. The new Home Information Pack is designed to help prevent gazumping, provide property-condition advice and set a national standard for home inspection and report writing. Several innovative features are to be introduced on the Home Condition Report, including an Energy Efficiency appraisal.’
proinspect.co.uk.

Buyer confidence in market increases

The Hometrack November survey of the national housing market reports a fall of 0.6 per cent for the second consecutive month, the fifth month in a row that house prices have fallen. The average property price now stands at £164,800, down from a peak of £167,700 in June this year. Since January this year prices have risen by 1.90 per cent, which hides an initial rise of 3.8 per cent in the first six months of the year before the downturn began in July.
John Wriglesworth, Hometrack’s housing economist, comments: ‘This month’s house price fall confirms, beyond doubt, that the housing boom is well and truly over. With house prices now over 100 per cent higher than five years ago, values have reached their peak given current levels of household income and interest rates.
‘We expect house prices to stabilise next year and recover in the second half. Household incomes are rising by five per cent per annum, unemployment is falling and is now at a 20-year low, interest rates are likely to remain stable rather than increase and lenders are continuing to extend the multiple of income on which they will lend, which all points to a recovery of buyer confidence next year. Typical mortgage repayments as a percentage of average earnings are broadly in line with long term averages, and are two-thirds of the previous peak back in 1989.’

House prices rebound

House prices rose 1.3 per cent in Octoer, according the Nationwide’s latest market survey. The rise reverses the falls seen in the previous two months and brings the annual rate of house price inflation to 3.3 per cent.
The price of a typical house in the UK is now £157,107, compared with £152,159 at this time last year. Fionnuala Earley, Nationwide’s group economist, said the annual growth rate ‘remains subdued in comparison to this time last year when house price inflation was running at over 15 per cent. Prices in the three months to October increased by a more modest 0.2 per cent. This remains in line with the gently slowing trend we have seen throughout this year but is a bounce back from the zero per cent increase in the three months to September.’

Today’s sassy woman: financially savvy

There’s a new girl on the block with influence on today’s property market, according to research by The One Account. The mortgage broker has identified a new breed of woman who has as sharp an eye for her finances as she does for fashion – and like many before her she comes armed with an acronym.
The SASSY woman is smart, ambitious, self-sufficient, and young. She is just as commanding over her money as she is at earning it. With role models such as Charlotte Church, this new breed of woman is emerging across the UK.

She is career-focused, ruthlessly competitive, rising to the top – and she doesn’t think twice about re-mortgaging her home if she finds a better product that will save her money and suit her lifestyle.
Research by the One account revealed that  43 per cent of women feel they are in control of their personal finances and are doing the best with their money, versus just 37 per cent of men. Also, most men and women know how much they pay each month on their mortgage, but women (35 per cent) are more likely than men (30 per cent) to shop around for a better deal when their discount period ends. Forty-five per cent of women say they regularly shop around for the best insurance deals, and 38 per cent regularly surf the web for ‘best buy’ tables for their financial products. Thirty-two per cent know their mortgage’s standard variable rate (SVR).