Rising house prices and a lack of properties has prompted many homeowners to improve rather than move. And who can blame them? According to the latest Halifax House Price Index, property values took a massive leap in the 12 months to the end of March, rising more than 10 per cent to £214,811.
This is the biggest rise since July 2014. It’s no wonder that homeowners are deciding to improve their own property rather than make do with the lacklustre stock on the market.
But spare a thought for those on the receiving end of an eager neighbour undergoing renovations. As more people decide to make improvements, many could find themselves facing disputes ranging from boundaries to the rise of iceberg basements.
You’ll probably be familiar with arguments over the ownership of a fence or overhanging trees. But in more affluent areas you could be facing the ultimate status addition: an iceberg basement. This is an extended underground area that is often as big as the house itself.
In one high profile case, residents of London’s Primrose Hill are protesting about plans by multi-millionaire Robert Beecham who wants to build what is believed to be the biggest single storey basement in London. Beecham, who made his money from Star Wars bubble bath products, has received planning permission to tear down his six-bedroom home and replace it with a seven-bed mansion accompanied by a 200 ft-long basement hosting a swimming pool, gym, bar and cinema.
Whether it is protesting against a patch of land or an iceberg basement, there is often an easier solution to the inevitable legal wrangles.
Fees can run into hundreds of thousands of pounds as you get lost in legal jargon and documentation such as Land Registry filings or Party Wall Agreements. If you feel that a neighbour’s renovations have caused damage to your property you could also end up in the small claims court where fees can reach £10,000 for the highest value disputes.
However, there is an alternative to lining the pockets of various solicitors by checking your home insurance for legal expenses cover. This is one of the most underused add-ons but could prove to be the most useful if you worry about future disputes with your neighbours.
The policies cover the cost of legal advice if you are sued or need to bring a claim relating to personal issues such as your property. Policyholders often have access to a 24-hour legal helpline and, if a claim is accepted, are covered for the costs of instructing solicitors. Some also provide free legal documents and templates such as tenancy agreements and complaint letters so you could manage the process yourself.
According to comparison website GoCompare, a quarter of buildings and contents insurance policies automatically include legal expenses cover as a standard policy feature, while more than two thirds offer it as an extra. The extra premium ranges from £2.99 to £45 and you can obtain protection for expenses ranging from £10,000 to £150,000. This is much cheaper than instructing a solicitor.
So before you go crashing into your neighbour’s iceberg, check your home insurance to see if legal expenses cover ensures you don’t sink.
Marc Shoffman is a freelance personal finance journalist