Uk
Most UK home owners don’t know the rebuild cost of their property
The majority of home owners in the UK don’t know the rebuild cost of their home and many think it is the same as the value of their property, a new survey has found. Overall some 67% of home owners said that they don’t know how much it would cost to rebuild their home if it was destroyed and 35% thought it would be the same as the valuation. This means that they are probably not insured properly should the unthinkable happen and the property is badly damaged and needs to be rebuilt, according to the research from insurance firm SunLife. ‘When you buy buildings insurance, you will need to know the rebuild cost of your home, which is the amount it would cost to completely rebuild your home if it was destroyed beyond repair,’ said Simon Stanney, director of insurance at SunLife. ‘Unfortunately, two thirds of home owners don’t actually know what this is or how calculate it properly. Contrary to popular belief, it is not the same as the current market value of the property,’ he added. He explained that having an accurate figure can help prevent over or under insurance. If you over insure, you could be paying out hundreds of pounds in unnecessary premiums, but if you underinsure, the consequences could be very serious. ‘In the unfortunate event that your home requires a complete rebuild and your buildings insurance is not sufficient, you will be left to cover any difference in price. Worse still, if your property is mortgaged you could be left with no home and thousands to pay back to your lender,’ Stanney explained. He pointed out that the best way to get an accurate rebuild cost is to get a surveyor to carry out detailed measurements of a home and then prepare a professional Rebuilding Cost Assessment which generally costs around £250. However, the survey found that only 8% of home owners do this. ‘Most people either don’t want to or cannot afford to spend this kind of money,’ said Stanney, adding that the research found 22% said they had calculated the rebuild cost themselves and 30% just leave it, hoping the insurer will estimate it for them. There are tools available, for example, the rebuild cost calculator from the Royal Institution of Chartered Surveyors which needs a property’s external floor area for both upstairs and downstairs as well as what it is made from, the type of house, and how old it is. The other way to avoid the issue of over or under insurance is to shop around for a policy that doesn’t ask the question. There are a number of providers out there that offer buildings insurance with a standard rebuild cost cover, including SunLife. ‘Despite the fact our research shows that most people don’t know what rebuild cost is, many policies still ask for it, and this is an example of how some insurers are not thinking enough about their customers. At SunLife we’re doing… Continue reading
US homes sales tumble but partly due to change in time frames rather than demand
Existing home sales in the United States fell considerably in November to the slowest pace in 19 months, according to the latest monthly report from the National Association of Realtors. However, some of the decrease was likely because of an apparent rise in closing time frames that may have pushed some transactions into December, the report says. It shows that all four major regions saw sales declines in November with total existing home sales down 10.5% to a seasonally adjusted annual rate of 4.76 million in November, the lowest since April 2014. After last month's decline, the largest since July 2010 at 22.5%, sales are now 3.8% below a year ago, the first year on year decrease since September 2014. According to Lawrence Yun, NAR chief economist, multiple factors led to November's sales decline, but the primary reason could be an anomaly as the industry adjusts to the new Know Before You Owe rule. ‘Sparse inventory and affordability issues continue to impede a large pool of buyers' ability to buy, which is holding back sales. However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it's highly possible the stark sales decline wasn't because of sudden, withering demand,’ he explained. Yun believes that while estate agents are adjusting accordingly to the Know Before You Owe initiative, the main result so far has been the need for longer closing times. According to NAR's Realtors Confidence Index some 47% of respondents in November reported that they are experiencing a longer time to close compared to a year ago, up from 37% in October. ‘It's possible the longer time frames pushed a latter portion of would be November transactions into December. As long as closing timeframes don't rise even further, it's likely more sales will register to this month's total, and November's large dip will be more of an outlier,’ Yun pointed out. The index also shows that pries are still rising. The median existing home price for all housing types in November was $220,300, 6.3% percent above November 2014 and the 45th consecutive month of year on year gains. Total housing inventory at the end of November decreased 3.3% to 2.04 million existing homes available for sale and is now 1.9% lower than a year ago. Unsold inventory is at a 5.1-month supply at the current sales pace, up from 4.8 months in October. NAR president Tom Salomone said that real estate agents worked hard to prepare for Know Before You Owe. ‘We knew there would be some near term challenges as the industry continues to adapt. Nonetheless, an early trend of longer lead times to closings is cause for concern,’ he commented. He added that the NAR will continue to work with the Consumer Financial Protection Bureau to ensure as little disruption as possible to the business of real estate. The latest data also shows that properties typically stayed on the market for 54 days in November, a decrease from… Continue reading
Scottish rents up just 0.1% in November, latest index shows
Scottish residential rental growth has almost ground to a halt in the run up to the festive holiday season with the average monthly rent up in November by 0.1% month on month. This takes the average rent to £546 per month with the data from the Your Move Scotland buy to let index showing that growth has fallen from a 0.2% rise between September and October. On an annual basis, the pace of rent rises in Scotland is also continuing to decline. November marks the fifth successive month where annual rent growth has slowed. With Scottish rents now just 1.4% higher than a year ago, the pace of annual rent rises has more than halved since the June peak when rents were up 3.1% year on year. But the headline figures disguise rises in some locations. For example, in Edinburgh and the Lothians rents increased to a new peak of £635 per month with a 0.8% monthly rise in November. The index data also shows that landlord total returns have increased to 6% across Scotland led by Glasgow and Clyde at 9.8% and the buy to let sector has seen its first fall in tenant arrears for six months. According to Brian Moran, lettings director at Your Move Scotland, the market is now set for change in 2016 with an extra 3% stamp duty tax set to be in place from April and rent control proposals looming. He reckons it will result in fewer properties available for rent which could push up prices. ‘Fresh supply is likely to be put on ice. Rents will then be ultimately be vulnerable to the shrinking pool of available homes for let. Landlords and the private rented sector have become a popular target for the Government recently but any attempts to curb investment in the private rented sector, and undermine landlords, will only have an adverse effect on tenants’ rents,’ he said. A breakdown of the index figures shows that as well as Edinburgh and the Lothians seeing growth above average, rents in the South of Scotland climbed 0.2% and those in the South were up 0.1%. Glasgow and Clyde saw the most significant monthly fall in rents, down 0.6% and the Highlands and Islands saw a 0.1% decrease in average rents since October. The picture is also mixed on an annual basis, with only three of the five regions of Scotland seeing rents increase in the past year. The Highlands and Islands saw rents rise 5.8% year on year, taking the average to £569. The next strongest annual increase was in the South of Scotland, up 3.1% and in Edinburgh and the Lothians typical rents are now 2.9% higher than in November 2014. Compared to a year ago, Glasgow and Clyde saw the biggest drop in rents, down 1.3% while average rents in the East of Scotland were down 0.1% year on year. After five months of successive rises, tenant arrears in Scotland… Continue reading
