Property: Subsidence scares reveal cracks in insurance system

WATCHING Holbeck Hall Hotel sliding off a Scarborough cliff reminds me that many home-owners are still suffering from a series of Eighties droughts which pushed subsidence pay-outs to a record pounds 500m by 1992. Some are fighting for compensation, others are weighed down with soaring premiums. And despite a wet winter and an improved market, claims could continue to rise as cautious valuers are picking out every crack as a possible problem. This is sending would-be sellers crying to insurance companies after paying up to pounds 500 for full structural reports on their properties.

Most are likely to be unnecessary, however, and the owner may not get the expense reimbursed. The surveyors Angmering Gorse launched a cheap inspection for high-risk areas around London a year ago. Out of more than 100 surveys, only about 10 per cent revealed subsidence. 'And of these around half will get no worse,' says a spokesman.

Yet insurance companies have pushed up premiums as much as 100 per cent in a couple of years, particularly in large swathes of London and the South-east, judged at risk because of the underlying clay shrinkage during droughts. This broad-brush approach, often based on the postcode of a property, has been condemned by many experts because it blights homes that face little or no risk. 'It smacks of an attempt to raise income to compensate for losses on home repossessions,' says one insider, who points out that all rebuilding insurance premiums are rising despite the fact that construction costs have fallen.

Insurers are also often irritatingly slow to hand money back. Christopher Hall of the solicitors Jakobi & Co set up the Subsidence Claims Association last year to give owners a voice and has been overwhelmed with inquiries.

Many complain about delays that mean they cannot sell their homes. 'Valuers are also reluctant to approve homes which have had underpinning work, despite assurances from lenders and insurers that this would be no problem providing the paperwork was available,' he says.

MOVES are finally under way to make home-buying easier and quicker. As part of the Citizen's Charter, local authorities will be set a deadline for producing information on planning and other matters. This could speed up one of the major delays in transactions. Ideas are also being drawn up to reform the whole procedure of buying and selling. The most concrete change, however, could be letting everyone know how much homes cost.

Sellers face huge problems setting a value on their homes. National surveys are useless as they only give broad averages. Asking-prices in adverts for comparable homes are also a waste of time as they are rarely achieved nowadays. Most people rely on the word of an agent, but you only have to ask two or three to give an estimate to realise how subjective that can be.

The best guide is the price of a similar home in the same street - which is exactly the information used when a lender sends around a valuer. But you will not have his sources of information. So the Housing Minister, Sir George Young, has told the Land Registry to set up a system that will provide anyone with these prices.

The figures are already known to officials for tax purposes, so it merely means publishing them. In fact, the information used to be available until a couple of decades ago, when it was decided this should be kept private.

Re-opening the system will probably bring squeals of protest, yet countries such as the US have always provided these figures for the public without any sign of society disintegrating.

I HESITATE to perpetuate stereotypes about our Celtic fringes. On the other hand, those Taffs and Jocks seem to know a thing or two. Almost three-quarters of people north of the border are determined to own their own home within the next decade, according to research for the Council of Mortgage Lenders. That might appear understandable, considering Scottish prices were still rising by 4 per cent last year. But what excuse for the Welsh, where close to 85 per cent expect to be home-owners in 10 years? They saw a 2 per cent fall.

This puts the slump in perspective. The urge to own has not been killed. There will, after all, be a property market in future for today's new buyers. (And before anyone questions my political correctness, I am a Taff.)