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Ashley Ilsen

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How is a private road different to a public road?

By Blog

As a property development finance company, we are commonly asked about the main differences between private and public roads. In this guide, we clarify the most frequently asked questions on private and public roads.

What are private streets?

Private streets (also known as unadopted streets) can be classified as roads that are not being maintained at public expense.

What this means is, is that council tax is not used in order to fund neighborhood expenses such as rubbish collections, road maintenance etc. That means councils are not legally required to carry out repair work on private streets should they arise.

This remains the case even if the public has a right of access to this private road.

If repair work is urgently required in order to make sure the street is safe, then the council may ask the residents on this private road to carry them out.

 

Do I receive lower council tax if I live on a private street?

No, the council will not provide you with a council tax reduction because you live in a building that is on a private street. It is worth remembering that council tax is paid to help with all the public services provided, not just for maintaining streets.

 

Can a private street be adopted by the local authority?

Yes, it is possible for private street ownership to be taken over by the local relevant authority, providing that they meet certain criteria.

For example, the private street in question will need to have met the local council’s adoption standard. These requirements can vary from authority to authority, but may include things such as improving lighting or curbs in the area.

 

How to find out if a road is public or private

If you want to find out whether a road is private or public, you can check this with the highway authority for the area in the UK. In most cases, this will be the local council.

The authority in question is required to keep a statutory list, available online, of all the highways that are being maintained at the public’s expense.

This means that if you see a road on this list, it will be a public road. If the road is not listed, it is almost guaranteed it will be a privately owned road, even if there is a public right of way so pedestrians can access it.

 

Is there a difference between a private road and a private street?

There is not a legal differentiation between the two, it is simply up to the local authority and others to determine which to use.

 

What are the advantages of private roads?

A private road can have a number of benefits. For example, this may be any of the following:

  • Less traffic and noise
  • A greater sense of community
  • More control over the surrounding area

 

Are there disadvantages to having private roads?

There are some potential pitfalls to private roads that it is important to be aware of.

For example, it is the responsibility of the owners of the property on that part of the street to maintain them if it needs repairing. If the residents on a private street disagree on the cost, it can cause problems.

Another potential issue can be if the street is not completely maintained. The private road could end up falling into disrepair and may cause safety problems.

Insurance costs also need to be considered, as if accidents occur on a private road the cost of a claim could be very high.

solar-panels-property

Should you add solar panels to a property?

By Blog, Development Finance

Yes, adding solar panels to a property can be a worthwhile investment and should be considered when you are thinking about property development finance costs.

Adding solar panels is becoming increasingly popular amongst property developers, as more and more buyers become concerned and aware of their environmental impact, and want to find ways of reducing their carbon footprint.

With all this in mind, we take a closer look at the advantages of having solar panels, and the main aspects you need to know about them before making a final decision.

 

How much do solar panels cost?

On average, solar panel installation will cost you anywhere between £5,000 and £8,000 in total.

 

How long do solar panels last for?

If you decide to install a solar PV system, you can expect it to last 25 years. It is very important to keep in mind that solar panels are a long-term investment.

 

The popularity of solar panels

Having solar panels installed can help to increase the property’s overall saleability.

For example, an independent study that was carried out by ING Direct showed that almost half of all prospective buyers stated they were the thing they most desired in a home.

As a result, by tapping into the growing popularity of solar panels you can increase the likelihood of your property selling, as it will be more attractive to potential buyers. It can also help to make your property stand out, and could well be the thing that encourages a buyer to make that final offer.

 

Energy savings = increased saleability

Solar panels also help when it comes to energy efficiency. With more prospective buyers looking to reduce their energy bills, it means that solar panels are helping to increase property’s saleability in this way too.

In a report carried out by the Department of Energy and Climate Change (DECC) that looked at the impact of energy efficiency and its influence on property valuations in the UK, this was confirmed. The DECC report shows that properties that had energy-saving measures helped boost house prices by a whopping 14% in total.

On average, this meant a property price boost of £16,000.  Therefore, not only are solar panels are a long-term investment, but they are a cost-effective one too, compared to the initial cost of installing them.

 

Reduced carbon footprint

Not only can solar panels be a worthwhile property price investment, but they also help reduce carbon footprint.

 

Check the property is suitable for installation

Whilst there a number of advantages to having solar panels, it is extremely important you have made sure that the property is suitable in the first place. This is because not all houses will be suitable for a solar PV installation.

The main things to consider when it comes to installing a solar PV system are:

  • You will mostly need a south-facing roof that has no shade or at least very little
  • The tilt of the roof angle will also be important, affecting how much overall energy that is produced, as well as the money you spend
  • Size of the solar PV system (the size you choose will depend on the roof and electricity used)
  • The FIT rate you can get (remember that these rates reduce every quarter)
  • Where in the country the property is located (for example, a house in south west England will get more sunlight than a house in Northern England)

 

 

 

What is involved in a property survey?

By Blog

Property surveys form an important part of the property development finance process. We take a closer look at what you need to know.

What is a property survey?

This is an inspection of the property’s overall condition, which is assessed by an expert surveyor who visits the building and prepares a property report based on their findings.

The surveyor is able to determine if there are any problems with a property that are a cause for concern for the prospective buyer.

 

What does a surveyor look for?

The property surveyor will be able to check if there any structural problems with the building, such as subsidence issues or unstable walls. They can also check to see if major alterations or repairs are needed to be carried out (such as fixing the roof) before it can be used.

 

When is a property survey carried out?

In most cases, once the homebuyers’ offer has been approved by the seller, the property is assessed by a surveyor.

Types of property surveyors

When getting a property survey, you should make sure that the surveyor you have chosen is accredited by one of the following bodies:

  • SAVA or RSPA – the Residential Property Surveyors Association
  • RICS – the Royal Institution of Chartered Surveyors

It is worth remembering that surveyors from these accrediting bodies offer different types of surveys. For example, RICS surveyors provide three ‘levels’ of a property survey, involving a Condition Report, Homebuyer Report, and a Building Survey.

 

Is a property survey the same as a mortgage valuation?

No, a mortgage valuation is simply a brief assessment of a property to see how much it is roughly valued to be. This valuation is a requirement for most mortgage lenders in order to justify the loan amount.

A mortgage valuation is definitely not as comprehensive (nor can it replace) as a house survey.

 

What is the cost of a property survey?

The cost of a property survey is upwards from £300. The amount paid will be largely dependent on the type of survey you choose. We will go into further details as to the types of property surveys there are to choose from in the next section.

 

What types of property surveys are there?

  • Condition Report (survey level one) – the cheapest and most basic survey available. It provides a summary of property defects and potential risks, as well as ‘traffic light’ indications as to the state of different parts of the building.
  • HomeBuyers Report (survey level two – survey only) – details major problems, non-intrusive survey
  • HomeBuyers Report (survey and valuation), – includes a survey as well as valuation and an insurance reinstatement value as well
  • Home Condition Survey – offered only by RPSA, also provides practical information including damp assessments.
  • Building Survey (survey level three) – by RICS surveyors. The most expensive option, but they are extensive surveys and you are given a report.

 

What type of property survey should I get?

As already briefly mentioned, there a range of property surveys to choose from. The one you should opt for will depend on the depth of the property survey you are looking for, as well as your overall budget.

 

How long does a property survey take?

It will depend on the level of survey you have chosen and the size of the building which will be assessed.

On average:

  • A level-one property survey may take up to an hour to complete
  • A level-two property survey make take up to four hours
  • A level-three property survey may take up to a full working day to complete

 

Do I need to get a survey?

It is highly recommended that you get a property survey before you purchase a property. This enables you to make a fully informed decision about the building and the amount you will be willing to pay for it. Depending on the result of the survey, you can also allow for a budget for repairs that may need doing.

It can also be an excellent way to negotiate the price with the seller, depending on the outcome of the survey.

What insurance do you need when developing a property?

By Blog, Development Finance

It is highly recommended that you have unoccupied buildings insurance in place, and you may also be required to take out a JCT contract (non-negligence insurance) as well as a contractor all-risk policy if developing a property.

As property development finance experts, we will explain these insurance products in further detail in the rest of this guide, to provide you with in-depth information so you can make an informed decision.

Unoccupied buildings insurance

If developing a property that is completely unoccupied, you will need unoccupied buildings insurance. Typically, there will be three levels of cover to choose from. Pick carefully the level of cover to ensure you are fully insured in the event something goes wrong.

  • Level one: this level of cover for unoccupied buildings insurance means that it will only pay out for FLEEA. This stands for Fire, Lightning, Earthquake, Explosion and Aircraft damage only. That means if the property development experiences flood or malicious damage, you will not be able to recuperate costs.
  • Level two: an insurer will cover you for theft, malicious damage, water damage with this insurance policy.
  • Level three: the highest level of unoccupied buildings insurance cover will provide full peril cover should something go wrong during property development.

Make sure you inform your insurer about renovations

When insuring an unoccupied property, inform the insurer when applying that you will be renovating the building. Some insurers will not necessarily make a pay out for major refurbishments if a claim was made or they may decide to implement a cover cap on renovations they would pay out for.

Contractors all risk insurance

If you are the property developer you should also take out contractors all-risk insurance, in order to make sure you are protected against other contractors also working for you.

The main reason for doing this is because you may not necessarily receive adequate cover from the contractors’ insurance policies. In the worst-case scenario, that means you would end up having to pay out for damage caused, out of your own pocket.

By not having this insurance policy in place, you could be putting your property investment at risk.

 

JCT Insurance  21. 2.1

Also known as Non-Negligence Insurance, it is in place in order to protect the employer (this being the property developer).

This type of insurance will protect the employer against any unforeseen damage to third-party properties, which have resulted due to property development works on your site by a contractor or sub-contractor.

The damage this insurance policy refers to includes things such as lowering of groundwater, vibration, heave or subsidence.

Keep in mind that if you don’t have this insurance policy in place, you could end up having to cover the cost of a claim.