DIY disasters are a common cause of insurance claims. Amateur plumbers and builders often find their best-laid plans go wrong and have to call in the professionals. When handling a DIY project, it’s good to know your limits and don’t attempt complex jobs that are beyond your skills and capabilities. However, if you do find a project doesn’t as run smoothly as expected – make sure your home insurance can pick up the pieces.

Accidental damage cover

This is normally offered as an optional extra and is bought in addition to your standard home insurance policy. As the name suggests, it can help cover you for accidental damage in your home – from small slip-ups to large DIY catastrophes. This can include things like spilt paint on the carpet or an unwanted hole in the wall. It’s worth checking whether this is currently included in your chosen policy.

Large modifications

If you’re planning to undertake a major DIY project, such as a loft conversion, make sure you inform your insurance provider. Making large alterations or additions to your property could affect your home insurance cover, so it’s wise to inform your insurer before getting started. For example, fitting a new en suite bathroom could count as an additional room in your home, so your insurer would definitely need to know about it.

Leaks and water damage

One of the main problem areas for insurers involves homeowners attempting technical plumbing jobs themselves. If not dealt with immediately and efficiently, a small leak can soon become a big problem – seeping through walls and floors causing extensive damage.

Water damage is normally covered as standard with both buildings and contents insurance, but it typically won’t cover the cost of repairing the faulty apparatus that caused the leak in the first place. To avoid problems, it’s best to leave complex plumbing to the professionals, as a small error might result in a major flood.

Calling in the experts

If your DIY does turn into a nightmare, make sure you call in a fully qualified, registered professional. If you end up with a cowboy tradesman, they may exacerbate the problem and could compromise your insurance. In addition, make sure that any tradesmen you do instruct at your property have adequate public liability insurance. This is essential protection for both you and them, just in case anything did unexpectedly go wrong.

Your best mate gets a fancy new mobile phone. You salivate over its sleek exterior, high-tech touch screen and huge range of abilities. They say the phone has the ability to get emails, have apps, they can social network and even make the odd phone call. You look at your own ‘so last year’ phone and decide that it is socially unacceptable to use it any longer. You realise that they are very expensive and your current model is, after all, only 12 months old. What you need is a strategy to justify to your nearest and the dearest why you absolutely, positively have to have the best mother flippin phone in the room!

Object Of Desire

You start to casually mention how clunky your old phone is, how it never gets reception, how little time the battery stays charged and how expensive batteries are to replace. You show them the scratches (helped by the way you have taken to throwing it on the table/desk/ floor lately). You point out that it does not have the latest apps so you were unable to compare the price of pork scratchings in the local pubs before you went and so had to go into every one to make sure you got the best deal. You start to buy gadget magazines and casually leave them lying around open with the object of your desire circled and highlighted.

And then you wait.

You birthday comes and goes and no one buys you one. As Christmas approaches you increase your efforts which includes sitting on your old phone so that the screen cracks and ignoring your partners text to say they were stuck in the rain with a flat tyre – blaming bad reception. Christmas passes and there is no phone – frankly you were lucky to get that jumper after the whole flat tyre incident.

Then finally you resort to desperate measures – you accidentally drown your phone in a freak sailing accident the same week as your January bonus comes through and the sales start. By lucky happenstance you just happened to have backed up all your numbers the day before.

Finally your day has arrived. You try the first mobile phone shop and they only have it in pink, same story in the next one, you start to panic. At the next shop they have sold out and at the next one they will only supply it with the £3,000 per month contract. Suddenly you have an epiphany – going outside to actual physical shops is so 20th Century you should be seated or reclined indoors moving only your right and left hands from the elbow down. You go home and buy it online, remembering to uncheck the box that says do you want to buy mobile phone insurance.

Your new phone arrives through the post. It is in a box roughly the size of a small fridge – you start to panic. Maybe they sent you the wrong model and you have something from the 80’s that comes with its own trolley and a wind up handle! You open the box and there at the top is a tiny beautiful black and silver device – you start to drool. After fondling your new phone for about an hour and wiping up the drool you finally investigate what the hell else is in the box. Ah – the manual.
You flick though the first 300 pages and are dismayed to realise that it is not the multiple language version. You start from page one – battery, safety, charging, zzzzzz. You wake up 30 minutes later and peel the instruction manual off your face and wipe up more drool. You decide that manuals are for girls put the phone in your pocket and go to the pub to show off to your mates. You wait so you are fashionably late and everyone else is there and then you walk in with your phone held high in triumph. They all laugh and point.
You flee to the loo to deal with your devastation in private. While there you realise they are not laughing at the phone but at you as you have pages 6&7 of your phone manual printed across your face. You use your drool to wipe it off – finally it comes in handy!
Your love affair with your phone lasts precisely for 18h 23mins. You spend the next 2 weeks swearing in and around the vicinity of your phone. The **?/## touch screen does not work with your sausage fingers, there are **?/## stupid symbols all over the home page which you can not work out how to get rid of, you cannot use any of your apps mainly because you cannot work out how to get to them. You can use the camera and have taken some great photos and even some video but you have absolutely no idea whatsoever how to remove said items from your phone and get them onto a computer.
You cannot set up email. Extensive research on the internet and amongst your social circle reveals that no one has ever managed to set up their email on their phone and you start to suspect a huge conspiracy in the mobile phone industry.
You studiously ignore the dark looks your partner shoots you ever time you swear at your phone. They start to mutter things which sound a bit like ‘waste of money’ and ‘read the manual’. However these comments have no impact as you what so ever as you are already practiced at selectively tuning out anything your partner says. For example “do the dishes” and “put your stinking dirty pants in the wash basket” are all effectively tuned out but ”are you ready for the pub” or “I am felling a bit frisky tonight” actually get amplified.

After several weeks you realise that all you use your phone for is making & receiving calls, telling the time and setting the alarm. You realise that that is all you have used each and every one of your phones for and are momentarily confused as to what you spent all that money on a new one when your old one did that perfectly adequately. You take the phone out of your pocket lay on the taxi seat as you contemplate its worth. You are so deep in thought that you exit the taxi, walk up the steps and let yourself in the flat before you realise that your mobile phone is no longer on your person and is now probably being boxed up for the Taxi drivers wife’s next birthday.
You realise that you have not backed up your address book, you did not buy insurance with the phone and you have precisely 48 minutes to come up with a really good excuse before your partner gets home.

According to a survey of 2,000 households carried out by Allianz Insurance, 16% have damaged their homers or their property while attempting to make improvements. 20% also admitted to injuring either themselves, or someone else, while carrying out DIY. This is supported by figures from the Society for the Prevention of Accidents, which estimate 200,000 DIY enthusiasts turn up at hospital each year. Interestingly the survey revealed householders in the north east of England have the most DIY disasters, while people in the south east are least likely to have a mishap.

DIY disaster

Without the proper qualifications or experience these people risk invalidating their home insurance policies if things go wrong. “TV home makeover shows make it all appear so simple, and it’s easy to forget that these are highly skilled professionals. In reality, trying to tackle certain areas you are not qualified for, such as electrics or plumbing, could invalidate your home insurance policy, leaving you liable for any subsequent damage. We’d recommend using a reputable tradesman rather than going it alone,” explains Halifax Senior Claims Manager Martyn Foulds.

Allianz Insurance figures reveal that 55% of those surveyed claimed to have started a DIY job without the correct tools and almost 50% said they had started a DIY job without really knowing how to do it.

“Thankfully people can add accidental damage cover to their buildings and contents insurance to cover them for paint spilt on carpets or hammering a nail into a pipe,” says Simon Coughlin, spokesperson for Allianz Insurance.

Accidental breakage to some parts of the home such as sinks, baths, ceramic hobs and fixed glass in doors is included in most buildings insurance policies. However householders many need additional accidental damage cover to protect against common DIY disasters, such as drilling through water pipes, spilling paint on carpets or putting feet through ceilings.

So before you get bitten by the DIY bug this weekend make sure your policy covers all eventualities, otherwise it could prove to be a very expensive weekend. “We suggest DIY enthusiasts should check to see if their insurance policy covers them for accidental damage in case the job goes horribly wrong,” says Simon Coughlin. “The average cost of a claim for DIY related damage is £600 and our claims staff expect to be busier than usual following a Bank Holiday weekend.” And, if in doubt, get an expert in to do the job!

If you’ve ever had a nice bicycle stolen from your house or from where you last left it then you may have found yourself uninsured and at a financial loss.

Most people would not think of insuring their bicycle but when they can often be worth hundreds of pounds it really should be given consideration.

Insure your bicycle are one company that could help.   Insure Your Bicycle provides comprehensive and cheap bicycle insurance cover in the UK.  They are part of Loyal Insurance Ltd and their bicycle insurance policy is backed by Fortis.

Their bicycle insurance will cover you against theft, loss or accidental damage so protect your 2 wheels today.

Extending a lease

1. What Is A Property Lease?

A lease simply means the right to occupy a property (usually a flat) for a period, which is generally set at 99 or 125 years. At the end of this time, although you can stay on as a tenant, the freeholder (freehold enfranchisement) will own your property.

2. Can I Extend My Lease?

The good news is that, as long as you have owned (but not necessarily lived in) your property for at least two years, you have a right to a lease extension for an additional 90 years at a peppercorn (zero) ground rent.

But there are exceptions. You can’t force the freeholder to extend a lease if:

- The majority of the leaseholders have applied to obtain the freehold

- Your lease has already ended

- You have sublet your home on a lease of at least 21 years

- The lease was originally granted for less than 21 years

- The freeholder is a charitable housing trust, the National Trust, the Crown (although they may agree), or the property is in a cathedral precinct

- If your freeholder wants to demolish or redevelop the property (in which case you would be entitled to compensation)

Should your freeholder refuse to extend your lease for any other reason than those listed above, get advice – they may be wrong (more on advice below).

3. Why Extend? Value

The most immediate reason for extending is that a short lease can seriously affect the value of your property.

A a flat with a lease of 100 years is worth roughly the same as a property on a freehold. But an apartment on a lease of 60 years, could be valued at approximately 60 per cent of the freehold price.

In practice, however, property values are more likely to be worked out at the freehold price, minus the estimated cost of extending the lease.

But bear in mind that if you wait until you have less than 80 years to go, buying lease extensions becomes more expensive (under 80 years and you have to pay so-called Marriage Value – more on this below).

4. Why Extend a Lease? Saleability

The second reason for extending a lease is saleability. Wealthy home hunters looking for a London pied-à-terre are more likely to accept a shorter lease, and can usually access specialist mortgage lenders who are happy to lend on short leases. But they are in the minority.

If you’re selling a flat in Fife or an apartment in Acton, most buyers will be scared off by a short lease, and they may also find that they can’t get a mortgage from the high street lenders.

A quick phone around reveals that the Woolwich doesn’t lend on property with a lease less than 30 years longer than the term of the mortgage (making it 55 years on an average 25-year mortgage).

The Halifax asks for 35 years longer (so, 60 years), and the Bristol and West draws the line at 70-year leases.

So, particularly if your lease is less than 70 years, it may make sense to apply for an extension before marketing your property.

5. Saleability and Assignment

Buying an extension is a costly business, and it can also take anything between two and six months – not good news if you’re low on funds and in a hurry to sell your flat.

There is another way, known as assignment. The seller begins the legal process to extend the lease, but assigns the right to the incoming leaseholder, who can complete it when they take ownership.

So, instead of having to wait two years to extend a lease, the purchaser can buy an extension straight away, which should leave both buyer and mortgage company happy.

6. How To Extend

There are at least two professionals whose services you’re likely to need when extending a lease.

Firstly, a valuer, usually a surveyor. A surveyor will be able to provide you with best and worst case estimates on the value of an extension, advise you on the amount of money you should offer the freeholder, and help you to negotiate an agreement. If you can’t agree a figure, the valuer will represent you at a Leasehold Valuation Tribunal (LVT).

Secondly, you will need a legal representative – either a solicitor or a licensed conveyancer. The solicitor or conveyancer will prepare the information you need for the application, serve the notice on the landlord, answer requests for information, and conveyance the new lease. There are also various specialist companies who will do the whole lot for you.

7. How Much Will It Cost?

How much the extension is worth is difficult to estimate accurately.

The value consists of three main amounts. The first two are to compensate the landlord for loss of ground rent during the rest of the existing term of the lease, and for not receiving possession of the property at the end of the term.

Thirdly, where the lease has less than 80 years to go, there is what’s known as a ‘marriage value’, which is arrived at by deducting the value of the property before the extension from the value afterwards, plus the value of the landlord’s interest.

Leasehold Advisory Service, the information service for leaseholders, gives an example of a flat with a 68-year unexpired lease, on a ground rent of £50 pa, with a current value of £150k, and an improved value of £165k. An extension of 90 years is likely to cost £8,250.

But the same property, on a lease with only 35 years to run, could set you back a whopping £55,368.

However, if the current lease is 95 years (and therefore attracts no ‘marriage value’) the cost of an extension would be only around £734.

In addition, the leaseholder is liable for both parties’ legal and valuation costs, unless the matter ends up at the LVT, who may apportion the costs differently.

Although it may be an expensive business, remember that you are adding value to your property, and, in addition, you will no longer have to pay ground rent.

8. Valuation Problems

Stories abound of leaseholders who have successfully negotiated the cost of a lease extension down, in some cases to half of the original figure.  It can be useful to engage a Lease Extension Specialists when negotiating with landlords to minimse the cost.

But if you can’t agree on a price, you can turn to the LVT – The Leasehold Valuation Tribunal. They will come up with a figure based on what they consider reasonable, including making a costs order if either party is acting unreasonably.

9. Bought A Flat With A Short Lease?

As a new leaseholder you don’t have an automatic right to an extension but, if your freeholder is amenable, you can try and negotiate one before the end of the initial two-year period.

If you face problems agreeing a figure, however, you won’t be able to turn to the LVT for help.

10. Use It, Don’t Lose It!

Remember – if you wait until your lease ends your freeholder will be under no obligation to negotiate an extension, and you could become an assured tenant, rather than the owner of your home.
Nikki Sheehan

© Find A Property 2000-2007

freehold enfranchisement

Leases lose value during their life is they are wasting assets. Let’s say you pay a large sum for a 100 year lease, as every year passes the lease becomes shorter and the value falls. You would not pay as much for a 10 year lease as you would for a 100 lease. UK law offers some protection to lease holders and gives them the right to negotiate an extension to their lease. The best news is that if at least 50% of lease holders all act together they can force the person or organisation that owns the freehold to sell it to them via a process termed freehold enfranchisement or collective enfranchisement.

What conditions must you meet in order to participate?

• At least 50% of leaseholders must be involved
• The freehold building is detached and self contained
• The original lease must have been over 21 years long
• Commercial space can only be a maximum of 24% of the property
• 2/3 of the properties must be qualifying

The legal issues involved are complicated and delicate negotiation is likely to be a key element of successful lease enfranchisement. Luckily there are lots of experts out there who can offer advice and manage the process for you.

Home Insurance

Home insurance is a basic term for two different types of insurance policy. Buildings insurance to cover the construction of your property and home contents insurance to protect your valuables and other household objects.

The problem is that not all home insurance policies are created equal making it difficult to compare like with like. The areas and level of cover provided vary from policy to policy along with the premiums. So having a definite idea of what you need to insure and for how much will help minimise the overall time and money spent buying it.

TIP 1: Cut the risk, cut the cost

All insurance policies protect against the risk of financial loss. So to cut the cost, cut the risk to the insurer and you’ll get a lower premium. To give you an idea, here’s a quick summary of the most effective tactics…

Contact your home insurance company or local neighbourhood watch scheme and they will send you a list of steps to make your house more secure and less likely to be targeted by thieves.

Fit locks to all windows and level 5 (BS3621) mortise deadlocks locks to the doors. Most insurance companies will give you up to 10% off your home contents insurance if you have these kind of locks fitted around your house.

Having a good alarm fitted by a recognised alarm fitter, which your insurance company can recommend, can give you up to 10% off your policy. Bear in mind that these are expensive alarms which require an annual check up.

Higher policy excess. You will usually have to pay the first £50 of any insurance claim, but if you’re willing to pay more then, your premium will fall now.

Neighbourhood watch schemes. Some home insurers offer discounts if you live in a neighbourhood watch area; however this is less common.

No claims bonus. As with your car insurance; a record of no previous claims will reduce your premium. If you need to make a claim, consider whether it may be cheaper to pay for the loss yourself and avoid an increase in premiums.

Your age. Statistically, the older you are, the less likely you are to make a house insurance claim. So if you’re a lower risk this will be reflected in your premiums. Some companies offer extra benefits to those over 50 such as Saga.

Extra security. Declare any special safety precautions you’ve made for your valuables such as a home safe.

Your lifestyle. If you have a dog, are teetotal and don’t smoke, be sure to declare this as such factors are used by some insurers to reduce premiums.

Occasionally applying to your existing insurer as a new customer can reduce your premiums. Many insurers offer discounts to new customers which won’t be repeated when you come to renew.

If you can apply online you will normally get a discount of around 5%.

Before you carry out any security improvements to your home, always check with your home insurance company first. They will confirm which improvements will have the biggest cost cutting impact.

TIP 2: Know what home insurance you need

Working out an accurate figure for the buildings and contents insurance value can be awkward, which is why a lot of homeowners are either under insured or paying for levels of cover they don’t really need.

Buildings insurance covers the re-build cost of your property not its market value. The re-build value of your home is the cost of re-building it in the event that it is destroyed by fire or subsidence for example. The re-build value of your home can usually be found on your mortgage agreement, or property deeds. The Building Cost Information Service (BCIS) of the Royal Institution of Chartered Surveyors (RICS) produces a range of detailed information on the cost of rebuilding houses and flats together with a re-building cost calculator.

Alternatively, you can opt for a policy that has an unlimited or high standard buildings sum insured so you don’t have to worry about insuring the right amount.

Then there is the home contents insurance which covers almost everything else you would take with you if you moved house. Make a list of the rooms in your house and write down all the items contained in each with there value. Then, total the individual amounts to see what contents insurance protection you need. Remember to value items such as music CD’s, videos and clothing as their total cost is often missed or under insured. Whether your wardrobe is full of jeans or designer labels, make sure you include the cost of replacing them.

TIP 3: Look at separate buildings & contents insurance

If you need both buildings and contents insurance, get quotes for separate policies for maximum potential savings. Most insurers do provide them as separate policies and just because one is cheap for buildings cover doesn’t mean they are equally competitive to insure the contents. Find the cheapest providers for each component and consider buying each from different insurers.

TIP 4: Shop around for home insurance

Shopping around will yield the biggest savings on home insurance.

Firstly, don’t simply opt for the home insurance supplied by your mortgage lender. They can be convenient when your busy sorting your mortgage but they’re often over priced and chances are they won’t have been compared against other policies on the market.

When shopping for insurance you basically have three options; go direct to the insurer, browse the web or use a broker. If you have the time and commitment you can do all three, but the fastest and most effective route is to log on and use the reach of the internet.

The best insurance websites compare dozens of brokers and home insurance companies in minutes. You only have to fill in one form to get a list of premiums displayed on your screen from major insurers and brokers. However, if you have unusual or very specific requirements the final premium may increase when confirmed direct with your chosen insurer.

TIP 5: Ask for a bargain

Home insurance has a margin of profit built into it which can be negotiated down if you’re armed with the right information. Not all insurers will buckle and concede an additional discount but if you don’t ask you won’t know.

• First, find the cheapest quote after using internet comparison sites and phoning a few brokers.
•  Select the cheapest quote and contact your existing insurer first asking them to beat it. If they won’t budge contact the second cheapest insurer and do the same.
•  If after your best efforts, the insurer won’t budge, ask them to throw in some extra cover to sweeten the deal or move on to the next home insurance company and repeat the same steps.