No-one watching the news could fail to be shocked at the flooding in much-loved areas of the North -West. Flood defences installed following the last floods in 2005 have failed miserably in some places, leaving families coping with second and third floods. The Government will be called on to make further improvements and hopefully, protect householders from experiencing this yet again, but in the meantime, they are left with insurance claims, massive cleaning and re-building projects and possibly, difficulties in obtaining insurance in the future for claims of a similar nature, if at all.
A nasty situation for all, but particularly for landlords, who will lose rental income whilst the property is uninhabitable and may find that existing tenants have no wish to return to a property which has destroyed family possessions that they have often neglected to cover with contents insurance. This is exacerbated by arguments with insurance companies if the value of the property has not been accurately assessed.
This an issue of concern to many landlords, unsure how to value their properties but knowing that an error could cost them thousands – and that is money no landlord can afford to lose in the event of a catastrophe such as fire or, in the present situation, flood.
There is some help available, however, if you know where to get it. The Royal Institute of Chartered Surveyors have an excellent website which contains a lot of information. With regard to property valuations, the page to look at is The Building Cost Information Service (BCIS). BCIS has commissioned The Association of British Insurers (ABI) to produce guidance to help home owners (and landlords) to check that their properties are valued correctly and adequately insured.
There is a calculator to assist with the process, but there is a registration procedure which must be adhered to with acceptance of the terms and conditions of use. After registration, the calculator can be used up to 4 times in any period of 12 months and is restricted to an e-mail address. This may not be of much use to landlords with large portfolios, but could prove cost effective for the landlord with just a few properties. Four valuations should, of course, include your own residence – it is as important to ensure your family home is correctly insured as it is for investment properties.
When using the calculator, be objective. There are 3 building specifications – basic with minimal facilities; good with typical facilities and excellent. Your file copy should have notes which explain why you have decided on the classification you have used. When the page with the re-build costs appears, it should be printed at that point as it cannot be saved or returned to, so you could have wasted 1 of your 4 tries.
My advice is always the same – use the help that is available to you. The website address is http://calculator.bcis.co.uk. If you check it out and are not confident to use it, then you could approach a local Chartered Surveyor who will know the market in the area, though his services may be quite expensive. However, getting the right valuation is imperative, whatever the cost and will safeguard your investment and what you can claim. Don’t quibble and check your policies now.
For advice on buy to let issues – Ask Sharon