Earth quake insurance quote

The insurance company Standard Life says that the rate rises since last summer have led more people to question the wisdom of property investment.

Its survey suggests that enthusiasm for investing in either one’s own home, or buy-to-let , has retreated to the level of January 2006.

However, confidence in ordinary savings accounts has risen.

The research asked a sample of 1,523 people if now was a good time or a bad time to invest in various investment .

Bad time to invest?

There was a significant increase in the of respondents believing that now was a bad or very bad time to invest in either their own homes or in buy-to-let properties.

Property experts have claimed that the rising cost of borrowing with a mortgage means that new buy-to-let investors may find the income from their properties does not cover their mortgage repayments.

However, the most recent and industry figures, from the Council for Mortgage Lenders, show that 330,000 additional buy-to-let mortgages were taken out in 2006.

That was far and away the highest annual figure since the market for this sort of investment started a decade ago, and took the total stock of such mortgages up to 850,000 - 9% of the total mortgage market.

The malleable and abundant nature the sedimentary rock made it a popular choice with construction teams in the late 19th and early 20th Centuries.

But sandstone has a vulnerability to the elements, particularly with the passing of time and the pollution produced by the city’s heritage.

The problems this can cause were last week when a stone balcony in the city’s Govan Road fell 25ft from the 1906-built Potted Heid building onto the street below.

Those living in the property may now face a hefty repair bill.

However, one resident - who bought her flat 18 months ago - said she received no warnings about the building’s structural integrity when it was surveyed.

Glasgow City Council said owners were responsible for listed buildings.

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“The council and others make funds available to assist owners of listed buildings and have certain limited powers to carry out urgent works to unoccupied buildings.

“We would not therefore have been able to undertake any works in this instance.”

No-one was injured in the Govan Road incident, but such incidents can prove to have fatal consequences.

Cyril McConnell, 59, died after he was hit by masonry while walking along Parnie Street in Glasgow after storms destabilised the stonework in 2002.

The following year, 10-month-old Trilby Graham died after a roof fell on her and her mother as they walked along the high street in West Bromwich.

Working holiday

Seven years ago Australian backpacker Christine Foster died after being struck by a piece of heavy stonework in Edinburgh.

The 26-year-old had been serving customers at a pavement cafe in the city after coming to Scotland for a working holiday.

Her death prompted Edinburgh City Council to launch a review of historic buildings to assess their safety.

It found that without statutory compulsion, property owners were unlikely to voluntarily introduce proactive repair and maintenance schemes.

At the end of the day it is up to the property owner to make sure the building is well maintained Andrew Adam JW Group

The initiative found that most would opt for a reactive, minimum repair approach.

The council carries out 1,300 emergency building repairs every year.

A said: “Edinburgh is a historic city and like any city with a high proportion of older traditional buildings there is a real risk of falling masonry and building materials, which can cause serious injury or death.

“Property owners, including tenement owners, are responsible for ensuring their buildings are safely maintained and repairs are carried out.

“We would urge property owners to be vigilant and have their buildings inspected regularly.”

Catastrophic effect

There have also been calls for the introduction of regular MoT-style safety checks of all aging properties across Scotland.

Owners of buildings must be able to show that they understand the maintenance needs of their property to comply with their insurance contracts.

Andrew Adam, sales and marketing manager with the JW Group of insurance brokers in Glasgow, said: “Falling masonry can have catastrophic effects. At the end of the day it is up to the property owner to make sure the building is well maintained.

There are some (buildings) that have been poorly maintained or inappropriate modern building techniques have been used on them Donald Coghill

“But the onus is also on the insurers to ask all the right questions and instruct the property owner if there are any risks.

“Most of these old substantial properties now have factors and insurers are very proactive about creating risk management programmes designed to tackle the issue.”

Donald Coghill, who worked as a building control officer for 14 years and was also a surveyor across Scotland, said inappropriate repairs were also adding to the problem.

He said: “A lot of these buildings are still solid and there will never be any problems.

“But there are some that have been poorly maintained or inappropriate modern building techniques have been used on them, causing problems with the structure.”

Climate change is also having an impact. Wetter weather can lead to the saturation of stonework, causing it to decay and break away.

Mr Coghill added: “If that increases then it could lead to more problems, so it is important that people regularly check their roofs and guttering.”

Most lenders will have some kind of fee for shutting down a mortgage account and this was traditionally to cover the cost of releasing the title deeds back to you. The fee itself will be perfectly legitimate but it is worth asking your lender if you can leave a small balance on the mortgage, which will mean that they will keep and look after the deeds for you rather than you having to find a safe place for storage, such as a solicitor. Just be sure to check whether they make any charge for this service.

Tayyib asks:

Are there mortgages available for university students?

The problem for students in securing a mortgage is that they have no or limited income to support the mortgage. Lenders need to be able to see that an applicant can afford the mortgage rather than just lend against the value of the property.

There are lenders that may be able to help if parents are happy to guarantee the mortgage and Bath Building Society has recently launched a &39; mortgage where parental guarantee and rental income from lodgers can be used to support the mortgage. Primarily aimed at Bath and Bristol, other university towns can be considered.

Once you&39;t expecting was Abbey to charge the sum of 225 for simply repaying the mortgage by transferring it to a different lender! When I first entered the mortgage, this figure was set at 99 and was to cover &39;. Abbey informed me that they increased the fee to 225 in May 2005 and that I would have been informed of this when I received my statement at the end of 2004 (having taken the mortgage out from April of the same year).

This is simply my word against Abbey&39;s not surprising you don&39;s house when she died some 12 years ago. My other two brothers also have a third each. In accordance with my mother&39;t be, although it would be worth checking with your insurer, which should be able to tell you for sure. Going back, endowments were often assigned to the lender and the policy held by them but this practice became increasingly rare in recent years, so policies may never have been assigned to the lender. In any case, the assignment should have been released when your mortgage was repaid as part of the process. There is no harm in the state of play with the policy provider.

However, it sounds like you decided to keep hold of the policy despite winning your complaint but you will not face any clawback on the compensation paid if the revival of the markets leads to the expected level of performance. Of course you may well still have a shortfall and it&39;ll be trapped in the house for years upon end until the value returns to the sum I paid for it. Could you recommend the best mortgage for first time buyers with a limited credit history?

There is always a chance that the housing market could fall although that certainly isn&39;t be repaid from the sale proceeds. It therefore only becomes a real problem if you need or want to sell the property and cannot make up the difference from other funds.

I think that you need to decide whether you are happy to take on home ownership first of all, as it is a big commitment and not something to rush into if you are unsure. Property prices have always done well in the long term but buying a home should not really be seen as a short-term option.

In terms of mortgages available, most lenders will be happy to lend to a first time buyer and can even offer up to 100% of the purchase price. This does increase your risk of negative equity so it is better and usually cheaper to put down a deposit.

Rob in Swansea asks:

I am about to start a self-build project. The build will cost around 100k. I currently live in a house with a very small mortgage of 80 a month. This house is worth 120,000 and I intend to sell it when the new one is ready. I could finance the development with stockmarket-based investments but would it be better to take out a short term loan?

Could you suggest some options?

If you don&39;t lock into a product if you intend to repay all or most of the mortgage when you come to sell the property. Therefore, go for something with no early repayment charges.

Alternatively, you could use a self-build mortgage that will release funds at certain stages as the build progresses. The deals on offer can be more limited than a mortgage on your home although plenty of lenders such as Norwich & Peterborough are happy to lend against self-build projects. There is also lots of information available on Buildstore&39;overpayment&39; products are now daily interest but there are still some operating on annual interest. If your mortgage is calculated annually you would be better saving the excess and then overpaying just before the interest is recalculated, usually at the end of the year.

John asks:

My son is looking to buy a flat/house in or around Cape Town. Where might he find out about the best mortgage providers?

This depends to an extent on whether your son lives permanently in Cape Town or is looking to purchase the overseas property as a holiday home. UK lenders are not going to lend against a property in South Africa in either instance.

Your son will probably be better to approach South African banks and advisers. However, if he is resident in the UK then he could approach a specialist in overseas mortgages such as Conti Financial Services Ltd - www.mortgagesoverseas.com

Ruth asks:

Do I have to surrender my endowment policies at maturity or can I continue to pay into the policies after maturity so that I can recoup any shortfall? Would you advise this as a course of action or would it be preferable to take a completely separate course of remedial action and what should this be?

Once the policies mature and pay out, that is the end of the policy, so you will not make any further premium payments. If you have a shortfall on an endowment to repay your mortgage then it is important that you take some action now rather than waiting to see what happens.

Rather than increase payments to the endowment, you could start to put money away in an alternative investment although there will be risk with any stockmarket-linked investment not reaching its target. You could put the shortfall amount of your mortgage onto repayment, which will ensure that you chip away at the capital over the remaining term, leaving the proceeds of the endowment to hopefully clear the balance.

Anne asks:

Where can my neice obtain a 100% mortgage, to get her on the property ladder.

There are plenty of lenders that offer 100% mortgages but it&39;s known as a higher lending charge. This is charged by some lenders on mortgages greater than 90% of the property value and can amount to thousands of pounds in some cases. There are deals available that do not charge this amount and even though the rate may be a touch higher it will generally work out cheaper.

Lenders such as Portman, Coventry, Newcastle and Northern Rock all offer rates to 100% without any higher lending charge.

Mr. Woods writes:

My daughter is engaged to an Australian who is on a two year visa with a view to permanent residency in the UK. They have just been refused a mortgage by a leading building society, which they believe is due to the visa issue. Are there any other options open to them in order to obtain their mortgage during his visa period?

Lenders will be reticent to lend to a foreign national without a permanent right to reside although it is worth checking with the lender to see if they can confirm that it was that issue that caused the application to be declined.

Some lenders, such as Accord Mortgages are more flexible than others when it comes to lending to those on a visa. However, even those lenders will prefer to see that your daughter&39;s and not the programme's. The answers are not intended to be definitive and should be used for guidance only. Always seek advice for your own particular situation.

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What should I do if my home or business is flooded?

If you are unfortunate enough to be flooded, the advice from the insurance industry is clear.

Ideally you should have already ensured that your contents insurance covers the full replacement cost of any items ruined, rather than their current market value.

Contact your contents and building insurer as soon as possible. It is advisable to keep insurance documents in a waterproof plastic bag.

Your insurer will expect you to take reasonable steps to protect property.

Therefore, take easily moveable objects upstairs and, if possible, use sandbags to hold back the water.

For the sake of safety, make sure the electrical supply is switched off at the mains and equipment unplugged.

As for cars and other vehicles, comprehensive insurance should cover flood damage.

However, third party cover won’t pay out if your vehicle is damaged by flood.

How can I best cope with the aftermath?

Once the waters have receded, you can take up carpets, but you must retain them so that the insurance company loss adjuster can see them and verify the claim.

Tips on coping with flooding Contact insurer as soon as possible Move property to higher ground Turn off electricity and other utilities The cost of business and residential accommodation may be covered by your insurer Source: of British Insurers (ABI)

For the same reason, it is very important that you keep all damaged items rather than throw them away.

If necessary, store them outside, in your garden or elsewhere.

Most household insurance policies will cover the cost of alternative accommodation, if the property is uninhabitable.

Likewise, many businesses have business cover, which will pay the cost of alternative accommodation.

No bad thing, since when a major flood event takes place it can take months for insurers to pay out.

How much will the Boscastle flooding cost?

So far there are no estimates of the likely cost of Monday’s flash flood.

But the public expense on rescue and clean-up operations is bound to run to many millions of pounds.

As for the cost to local residents, businesses and their insurers, at least 50 cars were washed away by the waters and many buildings in the village were badly damaged.

As for businesses, the short notice - in some cases only a matter of minutes before the flood waters engulfed them - means losses on damaged or destroyed stock are likely to be substantial.

What will happen to insurance premiums?

Properties in areas hit by the flash flood may well see premiums rise.

But across the country, the Boscastle flood is unlikely to raise premiums substantially.

Unlike other floods in the UK - which have hit large areas of the country and in some cases lasted for weeks - the flooding was localised.

The most damaging floods of recent years occurred in the winter of 2000.

The Association of British Insurers (ABI) estimated that those floods cost UK insurers 1bn, for which are still paying through higher premiums.

Is much of the UK at risk of flooding?

The Department for Environment, Food and Rural Affairs (DEFRA) estimates that 10% of the land area of the UK, up to 2 million homes and 185,000 businesses, is in danger of flooding.

Despite the Environment Agency’s attempts to increase flood awareness, many people living in flood plains are still not aware that they are at risk.

Boscastle, for instance, is located on three rivers and in a valley leading to the sea. Intense rainstorms triggered the flash flood.

What about flood defences?

Big increases in government expenditure on flood defences have recently kicked in.

To speed up work, the government has introduced new flood planning procedures.

However, decisions to build flood defences are arrived at through a cost-benefit analysis.

Put simply, the savings have to justify the expenditure.

Highly-populated flood plains like the Vale of York have passed this test. But less populated areas may end up without defences.

What are the insurance companies doing?

Some insurers had threatened to start cancelling policies unless the government coughed up the cash for flood defences.

But now the programme of flood defence building is under way, the threats have subsided.

However, one insurer is adopting a high-technology approach to their assessment of whether an individual property is at risk.

Norwich Union has digitally mapped the UK and can now calculate the risk of flood to within a few metres.

As well as showing whether an individual property is at risk, the map shows how often a flood is likely to occur and to what depth.

The multi-million pound project launched for new customers in parts of Shropshire and Norfolk, both areas at substantial risk of flooding.

Source:

Insurance companies have committed to continue to insure at-risk properties where new flood defences will be in place within five years, it said.

Previously, insurers had said they would cover these properties only until 2007.

The agreement could benefit owners of an estimated 100,000 properties.

“The insurance industry is now committed to ensuring that flood insurance remains available to existing customers where flood defences will be delivered within five years,” said Stephen Hadrill, ABI director general.

“This is good news for the millions of homeowners and firms who rely on insurance for financial protection,” he added.

In response, the government said it would maintain the current level of funding for flood defences and ensure that new developments did not increase the risk of flooding.

Many people living on flood plains are still not aware that they are at risk How the flood threat could affect you

Slow

In 2002 the government and insurers came to an agreement that homes at risk of flooding would still be offered insurance.

However, some insurers had that the flood defence projects were slow to start and that they may have to start refusing insurance cover.

The new deal agreed between the government and the ABI on Friday will secure insurance rights until at least 2010, while planned flood defences are completed.

But in areas where there are no flood defences planned it could be difficult for homeowners to find insurance from 2007.

In 2007 an earlier commitment to insure all homes at flood-risk will expire.

Last week, in a report, insurer More Than said there would be more frequent floods in the future.

It said up to 3.5 million homes in the UK could be at risk from flooding.

In , the report expressed concern at plans to build 200,000 new low-cost homes on flood plains in England.

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