Are you properly insured?

Property values in the UK fell slightly for the first part of 2011 (Nationwide indicated an average fall of 1.3%, Halifax a fall of 3.7% and the Land Registry a fall of 2.3% for the same period). With fewer first time buyers entering the market. According to the Council of Mortgage Lenders property investors took out 27,600 buy to let mortgages (totalling £2.9 billion) in early 2011 which was 3.5% lower than loans taken out in the last quarter of 2010 (11% fall in overall mortgage lending in the first part of 2011).


Property values in the UK fell slightly for the first part of 2011 (Nationwide indicated an average fall of 1.3%, Halifax a fall of 3.7% and the Land Registry a fall of 2.3% for the same period). With fewer first time buyers entering the market.  According to the Council of Mortgage Lenders property investors  took out 27,600 buy to let mortgages (totalling £2.9 billion) in early 2011 which was 3.5% lower than loans taken out in the last quarter of 2010 (11% fall in overall mortgage lending in the first part of 2011).


When purchasing a property for investment it is worthwhile to consider home insurance which can provide financial cover for a range of incidents that may result in damage to the property, the loss or damage of contents and (liability) insurance against accidents that may occur inside the property.


The cost of an insurance policy (the premium that is paid) is determined by a number of factors, these may include the location of the property, the value of the property, the value of the contents within the property as well as the insurance companies assessment of the potential risks associated with the property at the time the insurance application is made. The premium (the monthly payment) can be reduced if the house is fitted with a security alarm and smoke alarms. Further details within the insurance contract will describe what can and cannot be insured.


Investing in property can be a worthwhile investment decision, it represents a high value asset (one that can appreciate over the years). A home insurance quote from a reputable organisation will provide a good estimate of the costs associated with insuring the property. There are two main types of home insurance on the market, buildings insurance and contents insurance.


If purchasing a property using a mortgage, the borrower will usually be required by the lender to take out building insurance – this is compulsory, some lenders may offer mortgages combined with (buildings) insurance in a package.


Building insurance will provide cover against damage to the physical structure of the property and the permanent fixtures and fittings such as bathrooms and kitchens against severe events such as natural disasters, fires, explosions etc.


Contents insurance can offer financial compensation against potential material loss that may result from a burglary, fire, explosion or flooding of the home. Tenants living in shared property can apply for individual contents insurance for their individual possessions, whereas the building insurance will be the responsibility of the landlord.


 


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