Category Archives: Home owner information

Various advice from industry professionals and guest contributors on mortgages, insurance and other property-related matters.

Noisy neighbours: the number-1 off-putting factor

When you’re looking around a property, some things are guaranteed to make you think twice about buying. Obnoxious smells, damp patches, sagging roof – any of these things could be an indication you will have problems further down the line if you go ahead and buy.

But not everything is so black and white. There might be problems that don’t present themselves on your first visit. There may be things you hadn’t even thought to look out for. 

Ocean Finance, wanted to find out more so they decided to look into this to inform and help prospective buyers and commissioned some research on what factors put people off buying*. 

Noisy Neighbours 2Right at the top of the list, ‘noisy neighbours’ were the number-one off-putting factor. Fully 55% of the people we questioned said this would put them off buying or renting a property. 

There is no guarantee your future neighbours will be in the first time you view a property, so you should come back again at different times (in the evening, for example, or at the weekend). It’s always a good idea to see what the neighbourhood is like on a Friday or Saturday night – you might discover someone in the block has a thing about loud parties. 

Other things, like mould (number 2 on the list) or unpleasant smells (6), might depend on the weather to some extent. Arranging a visit after a rainstorm could help you get an idea of the property at its worst. 

Top 13 off-putting factors: 

1.  Noisy neighbours (55% of respondents said this would put them off)

2.  Mouldy rooms (49%)

3.  Property in a generally poor state of repair (43%)

4.  No central heating system (30%)

5.  Untidy neighbours’ gardens (28%)

6.  Unpleasant smells (cigarette smoke, for example, or animals) (27%)

7.  Badly kept communal areas (shared houses / flats) (16%)

8.  No double glazing (14%)

9.  Partly completed decorating / building work (8%)

10. Stone cladding (7%)

11. Green or brown bathroom suite (4%)

12. Overgrown or untidy garden (4%)

13. Decorating ‘not to our taste’ (2%)

Everyone has different priorities, of course. You might be happy to make a few compromises if it means you can afford a home that seems just right for you.  

But forewarned is forearmed. There might be something listed above that you hadn’t considered, which may help you negotiate on price or warns you off the property altogether.  After all, buying a home is a massive commitment. You might be there for decades, so it is well worth putting in the time beforehand – and trying to make sure you won’t run into any unpleasant surprises once you have moved in.

*Consumer Intelligence carried out online interviews with a representative sample of 2,202 UK adults between 31st July and 5th August 2013. 

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UK mortgage market is back to “normal”

The Times says there are now 10,000 different mortgages available 33% more than last year and the most since the crash in 2008. Even the self-employed are finding it easier to get a home loan with lenders easing their criteria in the wake of cheap money from low savings rates and the government’s “Funding for Lending”.

Asking prices are at a five-year high and even interest-only mortgages are back, albeit described as “low start” with buyers paying only interest for the first three years then reverting to a traditional repayment mortgage available from Clydesdale and Yorkshire banks.

So lenders are stoking the property bubble and those who cannot really afford to buy and pay realsitic interest rates are being given the means to buy now even though any rises in interest rates or falls in house prices will hurt them later.

So you have to ask, will lenders take up the Help-to-Buy state mortgage indemnity in January? and is it really required, given the fact that lenders are easing criteria to “normal” and lending to anyone who asks?

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Are annuities really the best option for your pension pot?

Insurance companies and pension advisors are keen to push retirees towards buying an annuity with their pension pots. This is not that surprising given the commissions advisors receive and the huge profit annuities generate for the insurance industry. Standard Life for example makes 18.6% each year on retirees pension annuities. The other providers are not telling!

Only those who live to a ripe old age (beyond 85) are likely to benefit from buying an annuity when they retire. At that age, realistically what will you be spending your money on? 

Reason why annuities are not such a good idea

1) Annuity rates have fallen by 20-30% since 2010. Buying now, or in the near future will mean you are getting up to a third less for life, than you could have got in 2010. On a £100,000 pension pot that is around £2,908 a year – a massive £58,160 over 20 years!

2) Once you have bought an annuity that’s it, you cannot change it or access the money.

3) When you die your pension pot goes to the insurance company, not your heirs. Unless guaranteed for a certain minimum number of years, annuity payments will stop.

4) Annuities are poor value.

Someone buying an annuity at 65 would need to live to 82 (17 years) just to get their money back in nominal terms, that’s not allowing for inflation, or the investment returns the insurance company will be making on your pension pot. For example: a 65 year-old male non-smoker in good health would get just £5,816 with a £100,000 pension pot at today’s rates.  

It is even worse if you opt to “index link” your annuity to the RPI “to safeguard against the effects of inflation.” Our 65 year-old man would receive just £3,370 per annum now. With most providers it will take around 16 years just to ‘catch up’ with the initially higher, level annuity rate, our 65 year-old would be 81 before any he receives any additional financial benefit from an index linked annuity. 

Income Drawdown

For many, income drawdown is a much better option. The same £100,000 fund would provide annual payments of £6,960. Even if there were no income at all, which is unlikely, it would take 14 years to deplete the pension pot completely. If you die in the meantime, any remaining pension pot is transferred to your estate, not an insurance company.

Always take the 25% tax-free lump sum. There are moves to limit this to £36,000 and it may even be withdrawn altogether in the future.

It important that people get proper independent financial advice before making a decision and especially before committing their pension pot forever by buying an annuity.

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OFT advice on buying from door step traders

The Office of Fair Trading Top Ten Tips: Buying wisely and safely on your doorstep or in your home.

door step sellingMany people who sell things on the doorstep, on the phone and even in your home are legitimate traders, but unfortunately some aren’t. Rogue traders may use illegal pressure selling tactics to make people buy and they can ignore their legal rights. The Office of Fair Trading has developed ten top tips to help you buy safely and with confidence on your doorstep – and to help you say ‘no’ when you need to. The brand-newhomes.co.uk website has a 22-point checklist when choosing a tradesman.

1. Don’t sign on the spot

Don’t feel pressured to agree on the spot- if you are interested in what they are selling, you can ask them to come back at another time that is more convenient for you, maybe when you have someone else with you or you’ve shopped around.

2. Check the trader’s identity

Always ask for an identity card and look up the organisation to check the salesperson’s identity is genuine. Don’t use the number on their card. Check if the trader is a member of a reputable trade body, like the Direct Selling Association, whose members should ensure their salespeople sell responsibly.

3. Be wary of special offers or warnings about your home

Don’t get taken in by sales banter or high pressure selling techniques. Don’t be hurried into a decision even if there is a discount. The discount might be on a price that is too high in the first place.

4. Always shop around for the best price

Check with other companies offering the same product first. Make sure the price and product is right for you.

5. Read the small print

Always read documents carefully before you sign them and make sure you fully understand your rights. It’s best to ask salespeople to call back so you can do this in your own time – don’t be rushed into signing before you feel ready.

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Why saving in an ISA is better than a Pension.

ISAs are simple. Once the money is in there is no further tax to pay on it. There are no forms to fill or tax to reclaim. You can also withdraw your money whenever you like without paying any further tax.

Pensions just don’t come close. The real problem is uncertainty Any government can arbitrarily change the rules and move goalposts making many of the positives negative. Paying into a pension doesn’t avoid paying tax on your contributions, you just defer the day. When you take income from your pension, through either drawdown or an annuity you will be taxed on the income will be taxed on the income.  At present you can take a pension once you reach 55. There are no guarantees the age will not be raised again as it was from 50 to 55.

Currently you can take up to 25% of your pension pot as a tax-free lump sum – a great incentive, especially as you approach 55. But will this still be possible in 5 or 10 years? No one knows. Politicians are already giving consideration to limiting the amoun, perhaps capping it at £36,000.

Then there is the tax relief on contributions, again under review. Pension contribution tax relief deprives the treasury of around £35bn a year. It is suggesting that relief could be limited to 30% rather than the highest 40% as currently.

Finally, you are compelled to buy an annuity or drawdown. In most cases you would need to survive for 20 years just to get your pension pot repaid to you. Not surprisingly, annuity providers make huge profits on pension annuities. Standard Life for example has disclosed their profit margin is 18.6%. This is in addition to the fees charged over the years you build up your pension, taking a large slice of the growth in the form of their annual charges.

ISAs may not be 100% safe from a raid by the taxman. But as around 23 million people have one and will protest at any attempt to confiscate any of it, they are a lot safer than pension.

Ask anyone that saved into an Equitable Life pension!

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How to switch energy suppliers in your new-build home

Moving house can be a tricky business: there’s a lot to think about. When you’re moving into a brand new home, there can be other things to think about too. That’s why Debt Advisory Centre has put these tips together to help you set up your utility bills in your new-build home and make sure everything goes smoothly.

Before you leave your old home

The process of setting up your utilities in your new home actually starts in your old one. Here’s what you’ll need to do before you move out:

OLYMPUS DIGITAL CAMERA

  • Let your utility suppliers know that you’re moving.
  • Make sure they have the address of your new place. If your supplier doesn’t recognise your new address or postcode, refer to the information below.
  • Take meter readings on the day you move out and send them to your suppliers. Keep a record of this.

In your new-build home

Setting up utility bills in a new-build home can be different than when you move into a second-hand home. Firstly, new homes are generally built to higher energy efficiency standards, which should mean you should spend less on your utilities. 

If your home is brand new, there is a chance that businesses like energy suppliers, insurers and retailers might not recognise your postcode – and this may make it difficult to switch your energy supply. If this is the case, you will need to contact the house builder’s sales advisor. You should ask Royal Mail for your new postcode to be put on their database (which most large companies use for reference). You may need to fill out the ‘Postcode Finder Address Enquiry Form’ on the Royal Mail’s website. It is best to check whether your new postcode is registered before you move in, so everything is set up for when you get there. 

Once your postcode is registered, you can look for the best deals on gas and electricity. It’s best to ask the house builder which company they use initially as this provider may have the best deals anyway. 

What to do if you’re struggling with your energy bills

Whether you’ve recently moved to a new home, you’re considering it, or you’re staying in your current home – it’s important to know what to do if you start struggling with your utility bills. 

Recent research from debt management provider Debt Advisory Centre shows that around four million adults in the UK are in arrears to their gas, electricity or water provider. And the research suggests that 13 million have ignored a utility bill because they couldn’t afford to pay it at the time. 

Here is what you should do if you’re falling behind on your utility bills:

  • Contact your provider. Tell them about your situation and what you can currently afford to pay towards your arrears. They should do their best to reach an arrangement that suits both of you. 
  • Carry on paying for your usage. If you don’t do this, your utility provider could take action like installing a prepayment meter – or your water company could take out a County Court Judgment against you.
  •  Consider a prepayment meter for gas or electricity. It can be more expensive than paying by Direct Debit, but contact from your provider will stop because you’ll be paying for all the energy you use ‘as you go’. Your arrears can be loaded onto the meter and you can pay these off more gradually too.  

If all else fails, get professional debt advice. This could help you to get on top of your utility arrears – as well as any other debts you may have, like credit cards and loans.

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What to do if you find you have rats or mice in your home

Finding out you have rats or mice in your home can be a shock, but they are among the most common type of vermin around. Some home insurance policies will offer help in finding an exterminator if you discover you have unwanted guests, but you can also do a lot to prevent it happening in the first place. 

Home Insurance may not cover damage caused by rats and mice, though, so it’s worth taking steps to make sure they don’t take hold: 

Block access: Mice and rats can fit through surprisingly small gaps, so make sure you don’t leave them any entry points. Check around gas, electricity and water pipes and make sure all doors and windows fit securely. 

Fill holes: If you do find any odd holes that could provide a way in for vermin, fill them with wire wool and expanding foam, which you’ll find at a DIY shop. Also ask about guards for your drainpipes to stop rats climbing up. 

Don’t feed vermin: Store food in airtight containers and never leave crumbs or scraps out as they make tempting bait. Surprisingly, chocolate is popular with mice, so don’t leave anything sweet out.

Watch your hygiene: Remove rubbish at the end of each day, and take it out to a bin well away from the house. Don’t leave food debris around the garden, and avoid composting fish, meat or bread as they attract vermin. Wipe up any spills, clean under your worktops and don’t leave crumbs on the floor. 

Keep a look out  for tell-tale signs:  No-one wants to think about rats and mice wandering around your house, but it’s important that you watch out for signs that they’ve visited. Any new holes should be investigated, along with damage to skirting boards and carpets that may be caused by gnawing. You might also hear footprints, find droppings or even see the vermin themselves, particularly late at night.   

DIY treatments: If you suspect you have vermin, block nearby holes with newspaper and then check 24 hours later to see if it’s been disturbed. Use traps or poison – which should be kept out of the reach of children or family pets – to control the problem.  

Time to call in the professionals:

Contact your local council’s environmental health department. help may be limited due to the government austerity cutbacks and the level of help may vary depending on the council. However, they have a legal duty to deal with vermin from property owned by the council. It may be better to just call out an exterminator who can assess the problem and then lay traps. If left untreated, rats and mice can spread disease and cause damage to your property, so it’s important that you act quickly. 

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Good advice for anyone considering renting a home

Young people don’t expect to own their own home until they’re in their forties, according to a recent survey.* It is no surprise that attitudes are changing, with people happy to rent as they realise they’re priced out of the housing market. When asked about their plans, 38% said that owning a home “wasn’t critical” to them.

If you are one of the millions who aren’t desperate to get on the property ladder, renting can give you great flexibility and the chance to live in an area that you might never be able to afford if you were trying to buy a home. Once you’ve found your dream flat or house to rent, there are a number of things you’ll need to remember before moving in day:

  • Although you won’t need buildings insurance, it’s essential that you have a good contents insurance policy in place. It’s up to the landlord to insure the building, but don’t get caught short when it comes to your own possessions. Some contents insurance policies offer unlimited cover, but others will require you to list the value of your belongings so make sure everything is included.

  • Find out who the gas and electricity supplier is as soon as you move in and give them an up-to-date meter reading on the first day. That way, you won’t end up paying for gas and electricity used by anyone who lived there before you. Ask your supplier for a rough idea of how much the bills will be, and if you’re on a tight budget or don’t fancy any nasty surprises set up a direct debit so that you know exactly how much you’ll be paying each month.

  • Check with your water supplier to find out if you’ll be paying a straightforward bill or whether the property is on a meter.

  • Ask the landlord or agent how recently the locks have been changed. It’s safest if they’re changed when you move in so you know you’re the only one with a key.

  • Rented flats and houses may be unfurnished, furnished or part furnished. Agree to go through an inventory with your landlord or agent so you’re all clear on exactly what’s in the house – from a TV to cutlery. This might sound like a tedious job, but if you have it written down it will save any misunderstandings when you come to move out and get your deposit back. If anything isn’t in pristine condition, note that down too, so you won’t be saddled with a bill for damage at the end of your tenancy.

[*] Source – Findaproperty.com

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Brandon Tool Hire – Why employees should be careful what they sign!

Why employees should be careful what they sign!

A recent case was reported in the Mail on Sunday where an employee of a building company went to Brandon Tool Hire to hire a cement mixer on his employer’s behalf. He even used the company’s credit card for the deposit! However the company he worked for Weald 24 Limited, ceased trading and the cement mixer was never returned. As a result, Brandon Tool Hire is holding the employee responsible and has successfully sued him, winning a judgement for £3,022! 

How can an employee be personally liable for his employer’s debts?

When the employee collected the mixer, he was asked for his driving licence and signed the Brandon dispatch note. The note, whilst not specifically labelled as any contract or agreement, did state that whoever signs it agrees to the terms and conditions small print on the back. 

Brandon’s boss Tim Smith says that an employee would not be responsible “if the customer had a trade account” but how many employees would know whether their employer has a trade account or not. 

In this case Brandon is still pursuing the ex employee for his employer’s liability.

I would suggest that anyone working and signing on behalf of an employer should be cautious and consider using a false name! I suspect that many building sites up and down the country will suddenly find that “John Smith” or “Mike Mouse” is signing for quite a lot of deliveries! 

Anyone using Brandon Tool Hire should sign a false name, or at least sign “signed on behalf of the hirer ?????? Ltd, no contract or liability exists with signatory” to protect themselves if the employer does not pay the bill.

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Do not renew your home insurance without getting alternative quotes

You don’t need to be a Meerkat to realise that it is always best the check the market before accepting your existing insurer’s renewal quote. As the Mail on Sunday recently reported with the case of an 85-year-old gentleman who had renewed his home insurance with Aviva for many years, renewing can leave you seriously out of pocket. For his ordinary three bedroom terraced town house built in 1935 he was paying a massive £912 a year for home and contents insurance. 

When he first insured with Aviva in 2001 his premiums were just £220. Aviva acknowledge that across the insurance industry quotes for existing customers are normally higher than those for new customers as they often include offers or large discounts which vary each year. 

It is disgraceful that people are still being taken for a ride by large financial institutions. The above insurance would be less than £300 with nearly every insurance provider. Even Aviva quoted £269 quite a big drop when his daughter threatened to cancel the policy and move elsewhere. He also got a cheque for £300 by way of an apology – no doubt after 12 years of over charging Aviva can well afford to do so.

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