Home Insurance
London homeowners cash in on Olympics
Thousands of homeowners across London are preparing to cash in on the Olympic Games – by renting out their properties to people from the UK and overseas who prefer to live in a more domestic environment instead of an expensive hotel. That’s not to say that many of the properties for rent are low end – far from it. But the undeniable privacy and cosier ‘homestay’ aspect of such rentals appears to be very popular, according to estate agents.
With many families across London leaving the city for the summer, renting out their property seems to be a perfect way to earn some extra cash. And with asking prices reportedly surpassing the £4000 per week mark, it’s little wonder there is so much interest.
Estate agents across the capital say there have been many enquiries regarding these options, with many deciding between either an expensive hotel such as the Dorchester, or a private home.
According to some figures, there are already 140,000 room available across London, and with the increasing capacity coming from private renters, there is a considerable chance that rental prices will be pushed down.
In terms of insurance – whether you have normal domestic home insurance, holiday home insurance or one of the various other property insurance products on the market – you’ll need to read the terms and conditions of your policy thoroughly to find out where you stand, or whether you need to take out additional cover.
UK insurer Aviva fires 1300 staff worldwide
Think the world of insurance doesn’t have its fair share of amusing mis-haps? Think again. Aviva plc, the world’s sixth largest insurer, has had its rivals from New York to Hong Kong grinning quietly to themselves – since the firm accidentally fired 1300 staff.
The grand firing was carried out by email, in a message which asked each recipient to ensure they returned all company property before leaving the building. It also reminded them of confidentiality agreements as regards any information they held about the company. According to the firm, the human resources department was quick to send out apologies to recipients of the email.
The mass email was, according to Aviva, meant to be for a single person in the Investors staff, but the entire Investors team somehow received the bad news. It’s not clear if the intended person’s name was revealed to the 1,300 recipients.
The Daily Telegraph was first to report on the debacle, which was blamed on an administrative error.
Paul Lockstone, spokesman for the London-based insurer, explained: “Unfortunately, as a result of a clerical error, it [the email] was sent to all of the Investors staff worldwide.”
So it seems that the world of insurance – from travel to car to holiday home insurance – can be a little bit more entertaining than some might believe!
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Making time for the garden
So, your unoccupied property insurance policy is bang up to date. Does that mean it’s wise to simply leave your property alone until it’s sold, rented or renovated? There are a number of reasons why you should keep tabs on your property, and particularly the garden.
If you’re looking to sell or rent out the property, keeping your garden looking pretty (especially now that spring is here and all the neighbours are sprucing up their flower beds and lawns) will help make the place more attractive. In addition to this, keeping your garden well-maintained gives the impression it is inhabited – or at least that someone is keeping an eye on it.
Even if you’re not into gardening, it doesn’t take a horticultural genius to make the garden look nice. You don’t need to splash out on expensive books by celebrity gardeners – there’s plenty of info online. The BBC’s gardening website is a great resource to help you get started: http://www.bbc.co.uk/gardening/
If you don’t have the time to plant new flowers, setting aside a few hours to remove all the dead leaves and foliage from the winter can do wonders for the overall look of your garden. And who knows, you might even enjoy it and discover you have a new hobby!
Unoccupied Property Insurance – A Summary for Beginners
Unoccupied property insurance fills the gap left by other policies that cannot cover a property being left empty for a prolonged period of time. In most cases, this time period is 30 days or longer.
There are a number of situations whereby a property owner might need this type of policy, they include:
• A property standing empty between lets
• A property undergoing refurbishment
• A property in probate
• A property for sale, where the owner has already moved
• Properties belonging to elderly or unwell owners who have gone into hospital or care
There are a number of issues to be aware of when taking out this type of policy. Be sure to tell your insurer if the property is under refurbishment, since some unoccupied property insurance policies will not cover properties that are boarded up or are technically building sites. Most policies require that doors and windows have five lever mortise locks fitted to optimise security. You should also be aware that any damage caused by contractors may well be excluded, since those businesses should have their owner insurance.
Additionally, during winter months your insurance provider is likely to expect that water and heating systems are fully drained – particularly over winter months.
Another key issue is contents insurance: most insurance products will require an add-on policy. One way to avoid this is to remove valuable items from the property while it is vacant.
Renovations and your insurance policy
As high season approaches, many holiday home owners will be gearing up for a very busy summer. Summer nearly always offers the biggest earning potential of all the seasons, but this year this is especially the case with the London Olympics and the high profile ‘staycation’ campaign.
The low season represents the ideal time to carry out renovations on holiday homes and other properties; with few or no guests there is little revenue loss. It’s a good idea to time any renovations carefully, so as not to miss out on big getaway times of the year, such as Easter. Directly after the New Year celebrations is a popular time to have such work done, allowing a good three months to complete the work. Impress upon those carrying out the work how important it is to have it completed on time. Building in a couple of ‘delay’ weeks might also be a good idea.
It should be noted however that any alterations to your property may affect the validity of your holiday home insurance policy. Most insurers will probably restrict cover or impose terms on the policy whilst work is undertaken and large-scale will have to be assessed on an individual basis. Remember that if you do not disclose property works it could invalidate cover completely leaving you uninsured. If at all unsure about where you stand, it’s advisable to download (or dig out from your files) the policy terms and conditions. If still unsure, contact your policy provider directly, and they will be able to advise.
Cover for French Property Owners
Having the right insurance policy is essential – be it unoccupied property insurance, buy to let, or one of the various other insurance products available. The issue of having the right policy will be on the minds of many French holiday home owners, returning to France following the winter.
As anyone who has left their property empty for a long period will know, the moment when you enter your flat or house after an absence can be a tense affair. Yet, with temperatures in France having dropped to -17 during the winter, for some property owners, the tension won’t end there. Cracked radiators and boilers – not to mention pipes – can cause a great deal of damage, and witnessing it after a long time away can be an unpleasant experience.
For those who need to make a claim on their insurance, there can sometimes be some nasty surprises – particularly if they don’t pay out. Many repudiations arise because a given property has been left empty for too long a period.
It’s yet another reason to ensure terms and conditions are read thoroughly before a policy is taken out. Pay particular attention to the periods of time that your property can remain vacant for, so you know exactly where you stand as regards your cover.
A Gift from the Tax Inspector: Office & Travel Costs
When it comes to owning a property, there are some costs that cannot be avoided. Basic maintenance costs would of course be counted among these, and among those coming highly recommended would be insurance – such as landlords, unoccupied or holiday home insurance policies, among others. But there is one cost that has often been compared to shuffling off this mortal coil – and that’s tax.
But our friends at Her Majesty’s Customs and Revenue could well be alleviating some pressure from us over the upcoming tax year. There are two notable ones which may well be of interest if you own a property.
1. Home and office costs – From the 6th of April, UK landlords will be able to claim a total of £208 towards costs associated with running a home office for their business. What’s more, this can be achieved without any comment from the tax inspector. The allowance has increased by £150 to £208 a year, equating to £4 per week.
2. Mileage rates – from the 6th of April, these will increase from 40p per mile to 45p per mile for the initial 10,000 business miles, then 25p per mile for any additional mileage. An extra 5p per mile can also be claimed for any additional passengers who are in the vehicle for the business trip.
Rates remain the same for motorcycles and bicycles: 24p per mile for motorbikes and 20p for bikes.
Together, these two little giveaways from HMRC are not to be sniffed at. If we become aware of any more helpful tax changes along these lines, we’ll highlight them in this blog.
Helping children on to the housing ladder
Many of our clients are hoping to sell their empty houses if the market improves. Some of them are renovating but others are just waiting for a buyer to come along. One of the main problems in the last couple of years has been the shortage of first time buyers; and this has been partly caused by lenders requiring large deposits that young people find hard to accumulate.
If parents have spare cash they could help out with the deposit but not all families are as lucky as this. Some parents may be willing to put up their on houses as security. If they have substantial equity in their house it may be possible for them to stand as guarantors in this way but only if they are prepared to put their own homes on the line! The shortage of first time buyers is one reason why our unoccupied property insurance clients have found it difficult to sell.
Parents need to be quite clear about the risks they are taking before entering into any commitment to help their children. It is quite common for parents to be guarantors if the children are renting accommodation, while at university for example. However, this carries risks. The obvious one is that the parents will be liable for the child’s unpaid rent but it could be far worse. The guarantee may well apply to the whole of the rent under the tenancy- not just the child’s share. The guarantee may also cover all of the liabilities in the tenancy agreement- not just the rent. If so, the parents could find themselves dragged in to disputes about damage to the property.
If you are trying to help a child buy a home it will pay to talk to a specialist advisor about all the deals on offer and get everything checked by your lawyers. If you are asked to become a guarantor of a tenancy make sure you understand exactly what obligations you will take on.
Checking Your Empty Property
For many landlords, their busy working lives can mean that there is a great deal of pressure on their time. For those who have multiple properties, that can especially be the case. Making the time, however, to visit one’s property on a regular basis is crucial for the safe-guarding of one’s house or flat.
Carrying out such inspections is also a requirement of the vast majority – if not all – unoccupied property insurance polices. Precisely how often my differ depending on your insurance provider, but visiting once a week is a common requirement.
This measure, together with making your property look occupied via a variety of techniques can help ward off unwanted visitors – in the form of burglars and vandals, particularly the former. Rearranging furniture and curtains inside the property, installing an alarm and putting lights on a timer system are all good ways to help keep your property secure.
If you haven’t familiarised yourself with your policy yet, it’s very much worth taking some time to ensure you know what is required of you, so that your property remains covered. Other requirements usually include turning the water off at the mains – especially important in the winter when so many burst pipes occur, although this measure alone does not eradicate the risk of water damage. A burst pipe could stand undetected for days leaving it to cause significant damage with insurers having bit hit hard in recent years this is a sensible precaution to request.
Unoccupied insurance is available from Click4quote.
Will You Be Sued if Someone Slips on Your Property?
While the UK has not quite reached the levels of the United States when it comes to compensation culture, the practice in Britain is certainly on the increase. Within this realm, there is some concern among property owners that if someone slips over and hurts themselves on their property, the owner may be liable.
So what are the facts? The UK government offers up its ‘snow code’ by way of explanation, which has this to say on the matter:
“Don’t be put off clearing paths because you’re afraid someone will get injured. Remember, people walking on snow and ice have a responsibility to be careful themselves. Follow the advice below to make sure you clear the pathway safely and effectively. Don’t believe the myths – it’s unlikely you’ll be sued or held legally responsible for any injuries if you have cleared the path carefully”.
While it does sound as if a property owner won’t get sued, the presence of the word ‘likely’ will no doubt send a shiver down many a property owner’s spine.
The best course of action is to clear your pathways (the ones that you own) as well as you can. Do this by clearing paths early in the day and do not use hot water to melt the ice: this can re-freeze to become perilous black ice. As well as breaking the ice up and clearing with a shovel, use salt and sand too.
These steps, together with public liability insurance should keep you protected; whether you have a buy-to-let, holiday home or unoccupied property insurance policy, check to make sure it includes public liability insurance.