Property: HOME TRUTHS
Sunday 12 October 1997
I live in a house which has been converted into six flats, worth about pounds 130,000 each. Recently, I was checking through some paperwork and noticed that the buildings insurance cover for the whole house is only pounds 250,000. I am a little concerned that if the house were completely destroyed, I would not be adequately insured. Could the insurance cover be wrong?
It is unlikely that the figure quoted in your buildings insurance policy is wrong, although it would obviously be sensible to check. The buildings insurance figure is usually different from the market valuation of the property. Normally, a qualified surveyor will inspect the property and suggest a figure which, in their opinion, represents the cost required to rebuild, as new, the property in the same form, size and style, if it were completely destroyed.
Holiday home options
My family and I have just returned from a break in France where we stayed in a wonderful holiday home, which we have found out is for sale. We would love to buy it for ourselves, but are unsure how to go about raising finance. We only have a small mortgage on our family home which is valued at about pounds 180,000.
There are a couple of options that you could consider. First, you could approach your existing mortgage lender and see if they could provide you with extra borrowing against the equity in your family home. You should bear in mind that there may be some restrictions, and that you would not be eligible for MIRAS tax relief on the second property. Also, you would have to be able to afford the increased monthly repayments from your existing income. Second, you could look at taking out an unsecured personal loan to buy the holiday home. This may be a little more expensive, but it may offer a bit more flexibility for you. Again, you would have to demonstrate your ability to continue meeting the interest payments each month. You will be able to get more details on this option by speaking to your local bank.
I am thinking of building a conservatory. What value is it likely to add to my house, and will I recoup the cost if I sell in the next year or so?
I think it is fair to say that the conservatory will increase the value of your property. However, it may not add an equal or greater value to your home as the amount you spend building it. Although it may not vastly increase the value of your house, a tastefully designed and furnished conservatory could make it more attractive to buyers and hence easier to sell.
Moving-in survival kit
I will be moving into my new home shortly and friends have told me to prepare a survival kit for the big day. What would you recommend I include in my kit?
It is always useful to have some essentials ready on the day of the big move; they can often help defuse those tense moments. I recommend taking the following things yourself, rather than in the removal van:
q Tea, coffee, milk and sugar
q Mugs and kettle
q Washing-up bowl and liquid
q Rubber gloves
q Soap and hand towel
q Mop and bucket
q Dustpan and brush
q Cloths and tea cloths
q Bin liners
q Toilet paper
q Light bulbs
q Basic tool kit (screwdrivers etc.)
Most important of all, though, is a bottle of bubbly to celebrate once you've got everything - and yourself, of course - moved in.
George Wise is managing director of NatWest UK Mortgage Services.
q Send your queries on practical property issues to the following address: Home Truths, Travel & Money, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL Fax: 0171-293 2043; e-mail: firstname.lastname@example.org
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