Home Value Protection Insurance - 'blight' insurance

johnweir123

Home Value Protection insurance is meant to guard against a decimation in the value of your home by forces beyond your control.

Does anyone know if you can still get it? There was a company who provided this back in 2004 but it looks like it didn't take off in any major way. https://www.independent.co.uk/property/house-and-home/get-wise-before-the-event-547168.html

For instance if you buy a house on an ordinary street but your neighbor decides to sell half his back garden and the council approves a 3-story block of flats on the site. No matter how much you've objected, the plans go ahead and your house becomes a less pleasant place to live. You can't move because you can't afford to move after the value of your house has fallen dramatically as a consequence of the new development. Your house is blighted.


Some kinds of 'blight' are ok as the government will bail you out. If they want to build a major road or a new railway they will pay your costs and compensate you for loss of value. But there are many kinds which aren't covered.



It might never happen, but if it does it would be good if you could protect yourself against the possibility.

G_M

Months if not years of wrangling over a claim:

"Sorry that's not blight".
"Yes it's blight but the impact is negligible."
"Yes it's blight but you should have been aware before you purchased - the plans were available in the council's basement."

AdrianC

johnweir123 wrote: »

Home Value Protection insurance is meant to guard against a decimation in the value of your home by forces beyond your control.

Paging Crashy...

Does anyone know if you can still get it? There was a company who provided this back in 2004 but it looks like it didn't take off in any major way.

I can't possibly imagine what might have happened since then that would have given their underwriters a proper fit of conniptions.


Seriously, it's just not going to be sane business for any insurer. Either the premiums will be massive, or they're going to have a list of exclusions a mile long.

Remember:
claims paid out = premiums paid in - (admin costs + staff costs + marketing + profit + tax)

johnweir123

G_M wrote: »

Months if not years of wrangling over a claim:

"Sorry that's not blight".
"Yes it's blight but the impact is negligible."
"Yes it's blight but you should have been aware before you purchased - the plans were available in the council's basement."

That applies to every kind of insurance.

johnweir123

AdrianC wrote: »

Paging Crashy...



I can't possibly imagine what might have happened since then that would have given their underwriters a proper fit of conniptions.


Seriously, it's just not going to be sane business for any insurer. Either the premiums will be massive, or they're going to have a list of exclusions a mile long.

Remember:
claims paid out = premiums paid in - (admin costs + staff costs + marketing + profit + tax)

The original policy which was offered (described in the article) was £12 a month. £100k maximum payout value. Had to be agreed at time of moving into the home and based on planning searches amongst other risks.


There is a remote possibility some buildings insurance could cover it. But I've not been able to search through the Ts and Cs of every buildings policy.

davidmcn

HS2 being built through your back garden = blight

Residential development next to existing residential development = normal

You might consider it "blight" because you remember what it was like before, but these things tend not to affect market values as much as people imagine. So I'm not sure where they would draw the line between normal market changes in price and "blight".

johnweir123

davidmcn wrote: »

HS2 being built through your back garden = blight

Residential development next to existing residential development = normal

You might consider it "blight" because you remember what it was like before, but these things tend not to affect market values as much as people imagine. So I'm not sure where they would draw the line between normal market changes in price and "blight".

Sorry, but you're concentrating on the particulars of the example I've described rather than the point at large. What you seem to be saying is that there's no way for the value of a house to fall so this isn't necessary to have a discussion on this?

davidmcn

johnweir123 wrote: »

Sorry, but you're concentrating on the particulars of the example I've described rather than the point at large. What you seem to be saying is that there's no way for the value of a house to fall so this isn't necessary to have a discussion on this?

I would say it's quite rare for a value to fall because of a specific "blight" issue which could be objectively identified and insured against and isn't otherwise covered by compensation (I would guess that, say, "annoying neighbours" isn't one of them), and even rarer for such a loss to be so severe that a lack of insurance would cause you a problem.

£12/month premium during my period of home ownership so far would cost me about £4k, with no opportunities to make a claim having come up or being foreseeable - I think I'd rather have the £4k in the bank.

johnweir123

What can happen is that the market value is affected but you have the additional angst of not being able to actually sell the house for any money because nobody wants to buy it after it has been blighted.


If I remember rightly, noisy neighbours was one of the possible reasons mentioned in the press release describing the policy. You're obliged to mention problem neighbours when selling a property and that could be a problem which appeared without warning during your ownership which materially affects the value of the property. If your neighbor decided to start keeping old cars all over their land at the front and in the back garden. When the house was valued originally, the price you paid, the mortgage you took out... all those knock-on consequences.


Another possible would be a green field being replaced with a static caravan park. Totally legal, happens everywhere. What would've been a property with a premium glorious costal view which you originally paid over the odds for suddenly isn't worth a fraction of what you paid.


You may say 'tough luck', it's a risk you take moving to particular properties... but that's how insurance works. You pay the premium to mitigate against the risk. Both you and the insurer hope you won't have to make a claim. In the meantime the insurer makes a profit for harboring the risk and you have your peace of mind should the worst happen. This is obvious though, right?


So has anyone seen any insurers offering anything like this? As I say, it was available at one point.

D_M_E

If the naysayers are to be believed, there is one big blight on the horizon: Brexit.

We hear many times that house prices face a drop of up to 30% after Brexit - would this event be called a blight?

Probably not as it would most likely be considered self inflicted.

johnweir123

D_M_E wrote: »

If the naysayers are to be believed, there is one big blight on the horizon: Brexit.

We hear many times that house prices face a drop of up to 30% after Brexit - would this event be called a blight?

Probably not as it would most likely be considered self inflicted.

It wouldn't make property less desirable.


Unless 16 million remainers decide having a non-EU property is a problem and move to Ireland so they can stay in the EU. In which case there'd be a property fire sale allowing brexiteers to offset potential losses by increasing their portfolio.


Then when Ireland follows the UK (as it often does) they'll have to move to France.


Interesting silly diversion.