Q. What factors do I need to take into account when buying leasehold?

A. Under English law, you can only have one freehold property on each piece of land - so leasehold was adopted as a way of getting round this problem in order to give flat-dwellers a degree of security of tenure. With a lease, you are effectively a kind of tenant, having bought rights to a property for an extended period of time. As such you are bound by the terms of the agreement, which are set out in the lease itself – subject of course to the various statutory rules and regulations. One of the key things you need to consider is the length of time still outstanding on the lease. Anything less than 80 years and you would encounter problems if you wanted to sell. You are legally entitled to have the lease extended – as long as you have already held it for a minimum of two years. However, this comes at a price, since the relevant legislation entitles the freeholder make a charge for this by way of compensation for having to wait longer to get their property back. Another reason why the 80 year mark is so important is that at this point, in addition to the afore-mentioned compensation, you also become liable to pay the freeholder so-called “Marriage Value” – i.e. 50% of the increase in the property’s perceived market value due to the lease extension. Clauses in the lease concerning repairs, and responsibility for them – also require careful study. Ditto, matters such as ground rent, service charges, insurances, maintenance schedules, rights over/responsibilities for communal areas, parking provision, the rules governing sub-letting…the list goes on. Ultimately, however, the key thing to remember about leasehold agreements is that while they all share certain basic elements, there is actually no such thing as a standard lease. Even in a modern development, they will often vary, while in the case of older leases, they can contain all manner of weird and wonderful clauses. The devil is always in the detail. So – don’t even think of trying to do your own conveyancing. Going through the terms and conditions of a lease with a fine toothcomb really is a job for the experts!

Q. Help! We need to move and don’t really want to wait till the Autumn - but we’re going to be away for much of the summer.

A. The first thing to say is “don’t panic!” Even in high summer (if you can call it that) there are buyers about; maybe not as many as in the autumn, but they are just as keen to buy. Indeed, for people like teachers, this is precisely the time that they will be actively househunting. And don’t worry about it interfering with your own holiday plans, either. When it comes to showing prospective buyers around, many estate agents actually prefer it if the seller is absent, since it allows them to concentrate on the job in hand. So, just give your agents the keys and a contact number, and let them deal with viewings and so forth while you’re away. Security is really the big issue here. Remember, 4 out of 5 burglaries take place when properties are empty – so having an estate agent visiting your property regularly is actually a big plus. Not only does it mean you’re home will get a regular airing, but it’s also good to have someone dropping by now and then, just to keep an eye on the place. In addition, of course, there are all sorts of other measures you can take – most of which are really just common sense. For example: · Avoid discussing your holiday or business trip in public, and don’t put your home address on your luggage. · As well as the agent’s visits, try to enlist a friend or neighbour to keep your house looking lived-in: for example, by opening and closing curtains, keeping the hallway clear of junk mail, etc (particularly important if your front door is glazed) - even parking their car in your driveway from time to time. Also, make sure they too have contact details for you. · Put one or two lights in different rooms on timer switches, and do the same with a radio (speech programmes rather than music). · Cancel any milk or newspaper deliveries. · If you are going to be away for a long period, arrange for someone to keep the garden looking neat and cared-for. And finally… · Try not to leave valuable items visible through the windows.

Q. There seems to be quite a discrepancy between the market value of my home and its insured value, and I’m concerned that I may not have adequate cover.

A. The market value of a property, and the value that is put on it for insurance purposes, are two very different things. Market value obviously reflects the price someone is prepared to pay for your home – which, as we all know, can go up, down or sideways, depending on a whole range of external factors. On the other hand, insured value is based on a calculation of what it would actually cost to completely rebuild your home to the same specification in the event of something like a major fire. Even in the current market, the former is almost always higher – primarily because the insured value doesn’t take into account the value of the land on which a property sits.

So, that’s where the discrepancy comes from – and in itself, it needn’t be a cause for concern.

However, whether or not the insured value is actually correct is another matter altogether. Generally speaking, insurance companies increase their valuations annually in line with inflation – but that won’t necessarily reflect the true cost of labour and materials at any given time. Besides, they may have got their sums wrong in the first place. Then again, you may have significantly extended or improved your home over the years, and unless you make a point of telling your insurers, they won’t have taken that into account.

As a general rule, I would advise you to check the insured value every 2-3 years. You can calculate this yourself by multiplying the total external size of your home (both upstairs and downstairs) by the estimated rebuilding cost per square foot or square metre, which can vary quite considerably, depending on where you live and the type of property you live in. These costs are published by the Royal Institute of Chartered Surveyors, and are available – at a price - from most qualified surveyors. Alternatively, you can check out the Association of British Insurers’ free online building insurance calculator.

Once you’ve done your calculations, compare the result with the insurer’s valuation, and if you’re not happy, ask them to make the necessary adjustment. It might mean you pay a slightly higher premium, but it’s a small price to pay for peace of mind.

Q. We are hoping to buy an old character property, but the lender’s valuer has given it the thumbs down, unless we have a structural engineer’s report...

A. Despite our sending them a copy of a full building survey which we commissioned and which says it is OK!

Not knowing the specifics of the case, I should start by saying that this is not an unusual problem, since lenders have always tended to take the word of their own valuers over any professional you might employ.

What can you do? Well, my first piece of advice would have been to send them a copy of your own survey – but you’ve already done that! So, you could start by writing to them asking for a detailed explanation of why the survey is not acceptable. You could follow that up with a further letter or report from your surveyor, setting out in detail why in his professional opinion the property is fundamentally sound - and specifically, why it should not be expected to meet modern standards and regulations, etc. After all, there are plenty of such properties around that are successfully bought and sold with mortgages every year.

Alternatively, you could always just commission an engineer’s report, as the lender asks. However, before going to that expense, you would need to have a pretty clear commitment from them that they will give you the loan you need if the report comes back positive.

Of course, I’m afraid it’s always possible that this particular lender will simply refuse to budge. After all, mortgage companies are the ones being asked to lend money, so they can basically set their own rules and decide who they are prepared to lend to – or not, as the case may be.

If this happens, then I would suggest you simply take your business elsewhere. After all, since so much depends on the personal opinion of the valuer, it would be strange if it were to prove impossible to get the loan you need from anywhere else! If you went through a mortgage broker, then I would definitely get him involved again. And if you didn’t, then I would definitely recommend you use one next time. After all, a broker won’t earn his commission if you don’t get the loan you need, so he will certainly have an incentive to try and sort things out!

Q. What is the current situation as far as Energy Performance Certificates is concerned?

A. A new consumer-friendly version of the EPC, together with new rules governing their use, came into force, bizarrely enough, on Good Friday, April 6th. By law, the new 4-page EPC must now be commissioned and made available within 7 days of a property being offered for sale or rent – with an extra 21 days allowed if any particular problems are encountered with its production.

Anyone (the owner, landlord or their agent) failing to make an EPC available, free of charge, to prospective purchasers or tenants within that time frame can be reported to local Trading Standards and may be liable to pay a fixed penalty of £200.

In addition, the front page of the EPC – the bit containing the familiar bar chart and key advice on increasing energy efficiency - must now be attached to all estate agents’ particulars. Moreover, the National EPC Register, which already contains several million certificates, has for the first time been made publicly available, with the aim of making it easier for people to compare the energy efficiency of their own homes with other, similar properties.

In announcing the changes, Communities and Local Government Minister Andrew Stunell said that the package of measures would make energy information on properties easier to understand, and help people save money on their fuel bills.

So far, so good, except for the fact that estate agents have been told by Landmark – the Daily Mail-owned private company running the EPC database – that the ability to automatically extract the front page of each report and attach it to property details (as required by the new law) won’t actually be available until June!

OK, so that is the agent’s problem, you might think – and you’d be right. However, homeowners might be rather more concerned to discover that thanks to these same changes, their full address and post code will now be publicly available on the Register. Something which, in extolling the virtues of the new arrangements, Mr Stunell somehow neglected to mention…

Ultimately, of course, the question that really matters is whether any of these changes will make EPCs more useful than they have so far proved – and so far, there is precious little evidence to suggest that buyers actually care very much about them at all.

Still, anything that saves the planet has got to be worth doing – hasn’t it?