The Full English – Sparking joy

What am I blathering on about this week?

We’ve been watching a lot of Marie Kondo on Netflix in our house. If you’ve not seen it, it’s a bit of a weird sell. A tiny japanese woman with a penchant for organising sorts out hoarders houses. Here she is (1):

Now she’s made a profession (and massive cash) out of perfecting tidying up. She’s sold millions of books, and sparked plenty of knock-offs (2). Her key points are fairly simple, and revolve around attacking things in a certain order, with a future goal in mind, and only keeping items which ‘spark joy’ (3). There’s no point having 20 photo albums you never look at. Keep one or two collated versions somewhere you can see them regularly, etc…

This floats pretty close to minimalism for me. It’s an easy to digest, more accessible, less elite version (4). After all, minimalism aims to:

  • Eliminate our discontent
  • Reclaim our time
  • Live in the moment
  • Pursue our passions
  • Discover our missions
  • Experience real freedom
  • Create more, consume less
  • Focus on our health
  • Grow as individuals
  • Contribute beyond ourselves
  • Rid ourselves of excess stuff
  • Discover purpose in our lives (5)

It’s a counter-cultural push against the consumerism of general life (6). And as such it sits well with the FI community, in the general ‘buy less shit’ stakes. I’ve always liked the idea of minimalism. It fits a Manhattan loft/ bourbon and grubby nightclubs life-direction which is never likely to be achieved. I’m just fairly shit at it. I own a lot of stuff. Much of the stuff is fairly tatty. We’ve lived like students for 10 years and many items have been bought as ‘do-fers’; they’ll do for now. 5-10 years on they’re still doing. I’ve been de-cluttering over the last six months, but I’m still left with a sense that a lot of stuff with remain. I will never be minimalist. Marie Kondo tells me it’s okay if my stuff sparks joy. So my garage full of tools which spark joy when I have the right tool for the job is okay. The ‘do-fers’ don’t spark joy, so they’ll be replaced with items which do. Ultimately I think that boils down to an intentionalism approach to items, as we try to be more intentional with the choices we make in our lives. Why fill your life with shit that makes you miserable.

“Wealth consists not in having great possessions, but in having few wants.” -Epictetus

Have a great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading (affiliate links):

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.

 

References:

  1. https://en.wikipedia.org/wiki/Marie_Kondo
  2. https://konmari.com/
  3. https://www.goodhousekeeping.com/home/organizing/a25846191/what-is-the-konmari-method/
  4. https://en.wikipedia.org/wiki/Minimalism
  5. https://www.theminimalists.com/minimalism/
  6. https://www.becomingminimalist.com/what-is-minimalism/
  7. https://www.thisismoney.co.uk/money/cars/article-7140919/Can-modify-car-finance-dangers.html
  8. https://www.theguardian.com/business/2019/jun/26/uk-economy-cliff-edge
  9. https://www.bbc.co.uk/news/business-48820573
  10. https://www.theguardian.com/science/2019/jul/05/bury-bodies-along-uks-motorway-to-ease-burial-crisis-expert-suggests
  11. https://www.bbc.co.uk/news/business-your-money-48776454
  12. https://www.bbc.co.uk/news/business-48776125
  13. https://uk.finance.yahoo.com/news/hargreaves-lansdown-just-removed-nick-085637525.html
  14. https://www.cityam.com/freetrade-to-close-7m-in-second-crowdfunding-round/
  15. https://monevator.com/passive-fund-of-funds-the-rivals/
  16. https://monevator.com/defined-benefit-to-defined-contribution-pension-transfers/
  17. https://monevator.com/the-slow-and-steady-passive-portfolio-update-q2-2019/
  18. https://www.ukvalueinvestor.com/2019/07/selling-vodafone-lessons-learned-from-one-of-my-first-defensive-value-investments.html/
  19. https://www.ukvalueinvestor.com/2019/06/ftse-100-ftse-250-valuations.html/
  20. https://theescapeartist.me/2019/06/25/why-capitalism-is-better-for-your-pet-dog-than-communism/
  21. https://earlyretirementnow.com/2019/06/26/does-a-4-percent-withdrawal-rate-survive-a-60-year-retirement/
  22. https://cashflowcop.com/when-to-buy-a-house-if-you-have-student-loans-debt/
  23. https://tuppennysfireplace.com/how-to-drastically-cut-expenses/
  24. http://diyinvestoruk.blogspot.com/2019/06/aquila-european-renewables-trust-new.html
  25. http://diyinvestoruk.blogspot.com/2019/07/half-year-portfolio-update.html
  26. https://indeedably.com/independence/
  27. https://indeedably.com/indeedably-meta-redux/
  28. https://indeedably.com/inflection-point/
  29. https://firevlondon.com/2019/07/01/doubling-party/
  30. https://firevlondon.com/2019/07/03/june-2019-q2-review/
  31. http://quietlysaving.co.uk/2019/07/07/june-2019-other-updates/
  32. https://ditchthecave.com/30s-and-40s-financial-independence/
  33. http://fiukmoney.co.uk/june-19-net-worth-and-monthly-update-11-514218-9687/
  34. https://thesavingninja.com/twelve-months-later-savings-report-12/
  35. https://www.msziyou.com/true-love-never-smooth/
  36. https://awaytoless.com/monthly-spending-june-2019/
  37. https://gentlemansfamilyfinances.wordpress.com/2019/07/05/cashback-success-saving-30-100-on-car-insurance/
  38. https://gentlemansfamilyfinances.wordpress.com/2019/07/04/wild-strawberries-and-wild-gardens/
  39. https://gentlemansfamilyfinances.wordpress.com/2019/07/01/month-end-accounts-june-2019/
  40. http://eaglesfeartoperch.blogspot.com/2019/07/investment-review-june-2019.html
  41. https://financeyourfire.com/2019/07/02/portfolio-update-june-2019/
  42. https://financeyourfire.com/2019/06/28/adventures-in-cryptospace/
  43. https://www.earlyretirementguy.com/summer-2019-networth-update/
  44. https://www.iretiredyoung.net/single-post/2019/07/05/Early-retirement-costs-targets—June-2019
  45. https://asimplelifewithsam.com/2019/07/02/june-review-and-spending/
  46. https://www.1500days.com/uk-chautauqua-fi-peeps-scarce-sleep-and-lots-of-sheep
  47. https://sharpenyourspades.com/2019/07/07/allotment-jobs-for-july/

 

 

 

 

 

 

 

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The Full English -HM Rev & Customs MVP

What’s am I buggering on about this week?

IMO the current government are utterly inept. That doesn’t stop the civil servants in the Palace of Westminster though, oh no. And some clever dick in HM Rev & Customs has been playing in a blinder over the last few years. Act 1) Letting inheritance tax quietly roll in. TI covered this in the Monevator weekend reading a few weeks back, but I wanted to look in further detail (1). The increasing CGT returns has partly come from increasing inheritance tax. This is the wealth of the baby boomers, coming home to the treasuries roost. To quote the i article, in the past 20 years the total value of people’s estates has more than doubled, so that as a percentage of income it’s reaching 1930s levels (2). It will continue to rise as the wealthiest generation die off.

I don’t particularly like inheritance tax. Beyond personal reasons I see it as an inefficient method of redistributing wealth stinging the middle class rather than the truly rich (who can circumvent it), and essentially double-taxation. YFG said it better on Monevator than I ever can (3, 4). Inheritance tax is currently at a relative effective low, but there are many calls for change. Some of this is driven by the way inheritance tax is stinging younger generations, who due to house price change have not been able to afford property and so have been waiting for inheritance to give them a step on the ladder (2). A survey published this week by Charles Stanley suggested that for many this expectation was unrealistic (5). Millennials were expecting 10x the median inheritance amount. The expectation was that this would act as their housing deposit, whereas in actuality the people they were inheriting from are living longer and more likely to use their house equity for nursing homes and then inheritance tax bills. Silly millennials.

What about Act 2? The BTL taxation noose. I’ve talked before about how I believe BTL is HMRC’s low-hanging fruit of choice. Now landlords are looking to sell-up as the new rules come into force (6). I think this is a really clever piece of rule-making. In the changes to Section 21, the government have made it harder to evict no-fault tenants, appeasing a big voting base (7). In the increase in stamp duty and removal of income tax relief they’ve stung profits, but harmonised with other income sources (8). Offsetting mortgage interest payments against income tax makes some sense from a business world point of view; like using stock write-downs and depreciation to reduce income assessments. It doesn’t make sense when you compare it to other private property scenarios, where you can’t offset your income tax bill with your domestic mortgage interest. Here it levels the playing field. The changes to the minimum EPC rating required for rental (now E), and tightening of BTL lending controls are just the kicker (9).

Practical upshot of tightening the rules on the BTL free-for-all, hobby landlords are driven out and professional landlords remain. Landlords come in all shapes and sizes, but those just about making the sums work are now going to struggle. The sale of these previously rented properties provides a nice CGT boost to the treasury, and also brings new property onto the market at a time when there is a housing stock shortage: double win! Just a shame these properties are generally only fair to middling quality, being ex-rental.

No longer interested in a BTL? Well you could go for a REIT, but I learnt this week about REAPs; Real Estate Annuity Plans (10). A sort of real estate investment bond, which funds affordable housing developments. Return is only 3%, but you get a nice warm glow inside without having to trigger your poverty allergy.

Have a great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading (affiliate links):

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.

References:

  1. https://monevator.com/weekend-reading-capital-gains-tax-receipts-are-soaring-a-good-bad-problem/
  2. https://inews.co.uk/news/business/britain-entering-golden-age-inheritance-baby-boomers-leave-assets/
  3. https://youngfiguy.com/inheritance/
  4. https://monevator.com/inheritance-tax/
  5. https://www.bbc.co.uk/news/business-48213333
  6. https://www.which.co.uk/news/2019/05/landlords-should-you-sell-your-buy-to-let-properties/
  7. https://landlords.org.uk/support-advice/april-2019-changes-to-section-21
  8. https://www.moneyadviceservice.org.uk/en/articles/buy-to-let-property-investments
  9. https://www.gov.uk/government/publications/the-private-rented-property-minimum-standard-landlord-guidance-documents
  10. https://www.theguardian.com/money/2019/may/04/ethical-housing-reaping-the-benefit-while-helping-out
  11. https://www.which.co.uk/news/2019/05/almost-700000-fewer-savers-open-cash-isas-are-isas-still-worthwhile/
  12. https://www.bbc.co.uk/news/business-48185806
  13. https://www.theguardian.com/commentisfree/2019/may/06/universal-basic-income-public-realm-poverty-inequality
  14. https://www.bbc.co.uk/news/business-48174797
  15. https://www.cnbc.com/2019/05/05/traders-brace-for-sharp-sell-off-on-trumps-tariff-threat.html
  16. https://www.theguardian.com/business/2019/may/06/zombie-firms-a-major-drag-on-uk-economy-analysis-shows
  17. https://www.independent.co.uk/environment/uk-coal-renewables-record-climate-change-fossil-fuels-a8901436.html
  18. https://www.bbc.co.uk/news/business-48215896
  19. https://www.autocar.co.uk/car-news/industry/analysis-just-how-green-are-electric-vehicles
  20. https://news.sky.com/video/i-owe-it-to-patients-to-work-extra-hours-but-im-being-penalised-11714585?fbclid=IwAR2cS3aGhMMhk0wyWBpo4K0q3H-fr7adUyEzSDaZB9eKoYA2bsNoSFN3QA0
  21. https://www.theguardian.com/technology/2019/may/05/airbnb-homelessness-renting-housing-accommodation-social-policy-cities-travel-leisure
  22. https://monevator.com/personal-financial-disaster/
  23. https://www.mrmoneymustache.com/2019/05/08/tesla-procrastination/
  24. https://www.ukvalueinvestor.com/2019/05/reckitt-benckiser-share-price-decline-good-value.html/
  25. https://www.ukvalueinvestor.com/2019/05/selling-compass-group-after-share-price-gains.html/
  26. https://3652daysblog.wordpress.com/2019/05/06/stocktake-q1-2019/
  27. https://cashflowcop.com/multi-millionaires-and-still-have-to-make-choices-johns-story/
  28. http://earlyretirementextreme.com/what-permaculture-and-ere-have-in-common.html
  29. http://diyinvestoruk.blogspot.com/2019/05/im-getting-up-to-speed-on-climate.html
  30. https://firevlondon.com/2019/05/11/april-2019-were-back-on-top-of-the-world/
  31. https://ditchthecave.com/love-to-lose-my-job/
  32. http://fiukmoney.co.uk/april-19-net-worth-and-monthly-update-9-434843-561/
  33. https://thesavingninja.com/dont-borrow-worry-from-tomorrow/
  34. https://awaytoless.com/why-we-keep-our-finances-separate/
  35. https://awaytoless.com/monthly-spending-april-2019/
  36. http://eaglesfeartoperch.blogspot.com/2019/05/two-islands.html
  37. https://www.iretiredyoung.net/single-post/2019/05/10/Some-early-retirement-confusion
  38. https://indeedably.com/challenge-the-premise/
  39. https://indeedably.com/history-repeats/
  40. https://www.jackwallington.com/long-term-planting-on-the-allotment/
  41. https://sharpenyourspades.com/2019/05/10/allotment-jobs-for-may/
  42. https://paulnelson90.wordpress.com/2019/05/10/what-to-do-with-radish/

 

 

 

 

The Full English Accompaniment – A life like Miss Havisham?

What’s piqued my interest this week?

Lately I’ve been struggling to post regularly to this blog. One of the things that’s kept me busy in recent weeks is helping out a couple of friends with their house. How they came to it is like the plot of a B movie. It goes like this:

Mr & Mrs X worked for many years for an old lord, taken on to look after him in his dotage. The old lord lacked heirs, and all his family were long dead. When he died in the 1950s, virtually destitute, they were surprised to inherit his house, a rambling 6 bed Tudor/ Victorian lump (plus outbuildings and grounds) in commuting distance to London. Being lowly housekeepers well into their 50s they could not afford the upkeep on the pile. To pay the bills they took on a lodger, Mr Y, newly qualified in his profession and looking for cheap accommodation. Mr & Mrs X had no children and came to look on Mr Y as their adopted son. He helped around the house, did some modernisation and gradually took care of them as they got older. When they died, they left Mr Y the rambling house, which he cared for and maintained.

Our friends parents, Mr & Mrs A, met Mr Y some thirty years ago. Mr A and Mr Y worked in the same place, shared many interests and had the same taste in cars. They developed a good friendship, that lasted after Mr A moved to work elsewhere. Mr Y stayed in touch with Mr & Mrs A, seeing them monthly or so, and even providing gifts for their kids as the family grew. Our friend has fond memories of playing in the garden of the big house and exploring the rambling outbuildings; the old forge, stables, garages, piggeries etc. As the family got older they grew apart, Mr Y becoming reclusive, but they still saw him a few times a year. Mr & Mrs A moved further away, downsizing for their retirement on their pension.

A couple of years later Mr & Mrs A got a knock on the door in the middle of the night. It was the police. They were informed Mr Y had died, and could they identify the body and act as executor of the will. They arrived at the house to find it, in effect, derelict. Two rooms were accessible, which Mr Y had retreated to towards the end; the living room heated by a coal fire, and the kitchen where he boiled drinking water on a single ring stove and ate tins of spam. There was no heating. Electrics had been wired in ad-hoc by Mr Y, mostly in the 50s. Water was pumped from a well to a lead tank in the attic every day. Most rooms had simply been shut up and left.

In order to identify Mr Y they had to find documents to prove who he was. This involved entering rooms locked for years. One room was full of Victorian trunks containing the old lord’s family papers, including an invite to Queen Victoria’s birthday party. Another room was full of bees. Another had no floor, just a void to the cellar. The loft was inhabited by rooks. In a box in a closet in the spare bedroom was an expired passport.

The final kicker lay in Mr Y’s 20 year old will. It specified that the house was to go to Mr & Mrs A but they had to live in it as a family for two years before they could inherit. The house was uninhabitable. Cue the current situation, where Mr & Mrs A are living in a caravan in the grounds, slowly cleaning, updating and renovating.

Are there any lessons to this story or is it just a good dinner party anecdote? Mr & Mrs A were retired, drawing down their pensions and were not expecting to sink megabucks into a restoration project. Now they have a poisoned chalice. It doesn’t matter what you inherit if you can’t afford to maintain it (see here UK aristocracy). Plus there’s definitely other people out there like Mr Y, saving and making money on the stock market and living like misers (1). It’s a lesson not to forget that the money you earn, the property you own, must serve a purpose.

Have a great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading (affiliate links):

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.

References:

  1. https://www.bloomberg.com/news/features/2019-04-27/the-mystery-of-the-millionaire-hermit?srnd=businessweek-v2
  2. https://www.bbc.co.uk/news/business-48119158
  3. https://www.theguardian.com/business/2019/apr/29/big-tech-regulation-facebook-google-amazon
  4. https://www.nytimes.com/interactive/2018/10/07/climate/ipcc-report-half-degree.html
  5. https://www.bbc.co.uk/news/business-47960657
  6. https://www.theguardian.com/society/2019/apr/15/short-notice-evictions-face-axe-in-tenant-rights-victory
  7. https://www.bloomberg.com/news/articles/2019-04-29/u-s-lags-china-expands-in-race-for-electric-vehicle-dominance
  8. https://www.thisismoney.co.uk/money/howmoneyworks/article-6812847/Money-Diaries-Im-24-earn-43k-struggling-pay-debt.html
  9. https://monevator.com/find-the-best-online-broker/
  10. https://monevator.com/understanding-bond-index-funds/
  11. https://www.ukvalueinvestor.com/2019/04/invest-in-rolls-royce-plc.html/
  12. https://www.ukvalueinvestor.com/2019/05/2018-stock-market-correction-and-the-art-of-being-patient.html/
  13. http://earlyretirementextreme.com/get-a-push-lawn-mower.html
  14. http://www.frugalwoods.com/2019/04/29/vegetable-seed-starting-supplies-and-other-march-2019-expenditures/
  15. https://cashflowcop.com/daring-to-dream-financial-independence-vs-childcare-costs/
  16. https://tuppennysfireplace.com/how-to-reduce-food-waste-save-money/
  17. http://quietlysaving.co.uk/2019/05/04/april-2019-other-updates/
  18. http://diyinvestoruk.blogspot.com/2019/05/pssttwanna-own-wind-farm.html
  19. http://thefirestarter.co.uk/autopilot/
  20. https://ditchthecave.com/april-2019-update/
  21. https://thesavingninja.com/crazy-gains-savings-report-10/
  22. https://littlemissfire.com/monthly-update-april-2019/
  23. http://www.thefrugalcottage.com/april-2019-a-month-in-review/
  24. http://www.thefrugalcottage.com/dividend-income-april-2019/
  25. https://gentlemansfamilyfinances.wordpress.com/2019/05/01/month-end-accounts-april-2019/
  26. https://gentlemansfamilyfinances.wordpress.com/2019/05/03/what-i-learnt-from-my-dads-early-retirement-aged-60-part-2/
  27. https://financeyourfire.com/2019/05/01/portfolio-update-april-2019/
  28. https://financeyourfire.com/2019/04/29/lifes-a-budget-and-then-you-die/
  29. https://pursuefire.com/monthly-net-worth-report-10-march/
  30. https://obviousinvestor.com/p2p-lending-portfolio-update-for-april-2019/
  31. https://www.iretiredyoung.net/single-post/2019/05/03/Early-Retirement-Costs—April-2019
  32. https://asimplelifewithsam.com/2019/05/04/april-spending/
  33. https://simplelivingsomerset.wordpress.com/2019/05/04/brexit-not-in-my-name-thanks/
  34. https://indeedably.com/self-inflicted/
  35. https://www.visualcapitalist.com/world-population-pyramid-1950-2100/
  36. https://youtu.be/yrwDx7tS_bE
  37. https://paulnelson90.wordpress.com/2019/05/01/beltane-the-best-month-of-the-year/
  38. https://www.jackwallington.com/allotment-month-42-weeding-asparagus-and-carrots-potato-chilli-and-artichoke-update/
  39. http://twothirstygardeners.co.uk/2019/05/sustainable-growing-medium-coco-coir-coconut-peat-test-garden/
  40. https://lifeatno27.com/2019/04/30/bring-on-the-boston-beets/

The Full English Accompaniment – New Build Property Warranties

What’s piqued my interest this week?

I learnt this week about another peril of buying a new-build home. One of the reasons people buy a new build is for the ‘peace of mind’ of having a home where everything is new, and if something should go wrong, it’s covered by a warranty. Most warranties are structured to provide ‘defects insurance’ to fix problems which emerge up to three years after the builder leaves site, and ‘structural insurance’, which usually covers from years three to ten (1, 2). The mortgage on your new build notes this, and like all other mortgages expects you to get your own home insurance as well (3, 4).

So what happens when the provider of your new build warranty goes bust? This is exactly what has happened with Alpha Insurance, who were declared in default last May (5). The cover continues to be provided, in some form, by the Danish Guarantee Fund, but that doesn’t help those trying to get a mortgage in the interim like one Reddit user (5, 6). The problem is that most lenders expect a valid new build warranty policy on new properties in order to lend. When the policy provider goes bust this can’t be evidenced. Finding a new provider is apparently a bit of a nightmare. Most policies are provided to large building firms via industrial providers (7, 8). If you’re not a building firm insuring an entire plots worth of houses you have to go to a specialist provider, who are more set up for self-build and one-off builds. These firms are more expensive, often require architects drawings, and may be unwilling to insure or warranty a property that’s already built (9, 10). This leaves the owner either unable to find a mortgage or forced to pay a hefty bill for a warranty that covers thing theirs home insurance already protects.

A niche issue perhaps, but when combined with the number of articles in the news lamenting the shoddy build quality of new homes, I’m sworn off buying a new build. Not a month goes by where articles advise on the merits of snagging surveys, and dubious construction practices (11, 12). Others report on owners issues trying to actually sort snags out, and homebuilding firms putting money aside to repair their own errors (13, 14). As always, do your own research and go in with your eyes open.

Have a great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading (now affiliate links):

Tombland – C.J. Sansom – I love the Shardlake series, detective novels set in the Tudor period with a crippled lead character. Beautifully written.

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.

Enchiridion by Epictetus – Bedside reading for a bad day

References:

  1. https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/new-home-warranties-cover/
  2. https://www.gocompare.com/home-insurance/new-builds/
  3. https://www.telegraph.co.uk/insurance/home/20-home-insurance-traps-and-how-to-avoid-them/
  4. https://www.citizensadvice.org.uk/consumer/insurance/insurance/types-of-insurance/buildings-insurance/
  5. https://www.fscs.org.uk/what-we-cover/insurance/alpha-insurance-as-declared-bankrupt/
  6. https://www.reddit.com/r/UKPersonalFinance/comments/apglf3/alpha_insurance_default_cannot_remortgage_savings/
  7. https://www.cml.org.uk/consumers/buying-a-home/new-build/
  8. https://www.pbctoday.co.uk/news/building-control-news/all-you-need-to-know-about-structural-warranty/41840/
  9. https://www.fmbinsurance.co.uk/insurance-products/new-homes-insurance-build-assure/
  10. https://c-r-l.com/what-we-cover/structural-insurance/
  11. https://www.which.co.uk/money/mortgages-and-property/new-build-homes/snagging-surveys-apxu15x04s1j
  12. https://www.theguardian.com/money/2019/feb/02/new-build-homes-why-some-owners-are-left-feeling-the-cold
  13. https://www.ftadviser.com/mortgages/2018/05/10/mortgage-lenders-soothe-fears-over-new-build-issues/
  14. https://www.bbc.co.uk/news/business-46302905
  15. https://www.theguardian.com/environment/2019/feb/10/plummeting-insect-numbers-threaten-collapse-of-nature
  16. https://www.propertywire.com/news/uk/falling-house-prices-means-property-investment-is-less-attractive-new-analysis-suggests/
  17. https://www.theguardian.com/society/2019/feb/11/study-links-heavily-processed-foods-to-risk-of-earlier-death
  18. https://www.bbc.co.uk/news/business-47200688
  19. https://www.bbc.co.uk/news/business-47224913
  20. https://www.theguardian.com/environment/2019/feb/12/electric-cars-already-cheaper-own-run-study
  21. https://www.parliament.uk/business/news/2019/february/royal-assent-tenant-fees-bill-signed-into-law/
  22. https://moneyweek.com/501682/pensions-drawdown-disaster/
  23. https://www.theguardian.com/business/2019/feb/14/renewable-energy-world-power-source-bp
  24. http://www.cityam.com/273176/starling-banks-75m-funding-round-merian-global-investors
  25. https://www.bbc.co.uk/news/business-47251465
  26. https://www.theguardian.com/business/2019/feb/08/risk-of-global-recession-may-be-low-but-we-are-heading-for-slowdown
  27. https://www.theguardian.com/business/2019/feb/14/how-can-we-tax-the-footloose-multinationals
  28. https://www.theguardian.com/business/nils-pratley-on-finance/2019/feb/13/interserve-needs-a-plan-b-given-the-rebellion-over-its-current-plan
  29. https://www.fool.co.uk/investing/2019/02/10/thinking-of-investing-in-these-neil-woodford-ftse-250-stocks-read-this-first/
  30. https://www.theguardian.com/politics/2019/feb/09/william-keegan-nine-british-financial-crises-since-1967
  31. https://www.ukvalueinvestor.com/2019/02/ftse-100-dividend-valuation-and-forecast-for-2019.html/
  32. https://gentlemansfamilyfinances.wordpress.com/2019/02/13/how-to-put-out-a-fire-use-liquidity/
  33. https://gentlemansfamilyfinances.wordpress.com/2019/02/12/early-redundancy-lessons-from-lifes-veterans/
  34. https://gentlemansfamilyfinances.wordpress.com/2019/02/15/if-i-lost-everything/
  35. https://thesavingninja.com/if-you-lost-everything/
  36. https://youngfiguy.com/wiped-out/
  37. http://quietlysaving.co.uk/2019/02/15/thought-experiment-2/
  38. https://indeedably.com/restart/
  39. http://ditchthecave.com/fear/
  40. https://firevlondon.com/2019/02/15/ive-lost-everything-through-a-cyber-theft/
  41. https://financeyourfire.com/2019/02/15/thought-experiment-wiped-out/
  42. http://eaglesfeartoperch.blogspot.com/2019/02/calculating-portfolio-returns.html
  43. http://www.mrmoneymustache.com/2019/02/11/hanging-out/
  44. http://diyinvestoruk.blogspot.com/2019/02/my-global-index-funds-under-spotlight.html
  45. https://simplelivingsomerset.wordpress.com/2019/02/14/dutch-brexit-humour-from-outside-the-nuthouse/
  46. https://monevator.com/weekend-reading-29-quick-rules-about-money/
  47. https://indeedably.com/what-you-keep/
  48. https://lovelygreens.com/growing-tomatoes-from-seed/

Property Renovation Lessons II

Continuing where we left off, we’ll walk in the front door when viewing a potential house purchase. In part two I’ll cover what I’ve learnt to look for in general interior room condition.
Shut the front door

Before shutting it, take a look at it. It seems a bit odd, but much like shoes tell the story of a person, I reckon a front door tells the story of a house. There’s lots of different styles:

front doors

Look at the construction; is the door PVC/ composite/ wood/ metal? Is the style of the door in-keeping with the age of the property? White PVC doors are very common, because cheap, and if a prior owner has opted for a cheap door they may have opted for other cheap options in the house. Has the owner put a modern door on an old house, perhaps hinting at a major modern refurb. In an older property does it retain it’s original wooden door? If so, look at the state of the paint. Such doors can last hundreds of years with maintenance, but need periodic sanding and repainting to maintain integrity. Again you can learn a lot about the owners attitude to preventative maintenance.

Look at the locks and door furniture. As mentioned in Part I, many insurance companies offer preferential rates for BS 5-lever locks. Most PVC doors are safer as they will have a multi-point locking system. Don’t forget to change the locks when you move in. Look at the door furniture; it can hint at chintz inside. Front doors have changed dramatically over the years, they tell the history of a property, and are an easy way to improve kerb appeal (1, 2, 3).

Flooring

You’re in the front door so look down. Victorian and Edwardian builders knew the importance of first impressions. Older properties will hopefully retain the beautiful parquet or tiled flooring. This can be replaced but it’s expensive and I don’t think it ever looks the same (although we have looked at reclaimed parquet in the past).

Worn parquet can be sanded back and re-varnished, as can original floorboards. This can be a DIY job if you fancy a go, budget at least £150 for a sander for a weekend and varnish. There’s lots of guides and Youtube tutorials which can take you through the process (4). Cover everything in dust sheets. We’re still finding dust three years later.

When viewing houses we would find try to find a neglected corner of carpet, or a piece where it had already come up, and peek at the condition of the floorboards. We were lucky with our first property that the floorboards had been hidden behind 100 years of layers of carpet and were pristine. We also discovered a hidden terrazzo floor in a property we lost out on.

Terrazzo is a polished solid flooring, produced by pouring a mixture of resin/concrete and marble/ stone chips (5). It has similarities with polished concrete and resin floors, which are both very fashionable currently (6, 7).

Laminate and carpet

Both of these I could write entire articles about. Laminate can be beautiful when done well. It also offers a cheap DIY way to update and upgrade a tired space, with ‘click-clack’ self-connecting forms available from most retailers. On the cons, it’s loud underheel, and is used by slum landlords to hide substandard flooring surfaces. Engineered hardwood flooring is the step up from laminate where a layer of real wood is added to a ply backing. This can really make a difference to a space but is understandably more expensive (8).

Carpet again comes in all shapes, sizes and styles. Look out for damage to carpet, lifting, or the carpet moth that will munch it’s way through natural fibre (i.e. wool) carpet in darker spaces. Bare patches in corners with discarded casings and potentially larvae will point towards the moth. We stripped the carpet from our whole house and switched to synthetic fibre to try and eradicate our infestation (9).

Wall and ceiling coverings

Lets talk plaster, paint and wallpaper. We’ll start with that perennial favourite, woodchip. Used in the 60s and 70s to hide poor plaster and imperfections, it’s wallpaper will added chips of wood to provide texture. It’s one of the main things to put potential viewers off a house. It’s a bugger to remove, as those woodchips soak up attempts to chisel it off. It’s super messy, takes ages, but is cheap to do DIY (main cost being a £30 wallpaper steamer from Screwfix etc). There’s plenty of guides on the internet into how to tackle removal (10).

The texture and endurance of woodchip means it can hide a myriad of problems behind it. To an extent any textured wallpaper can do the same, and should be treated as such. Anyone can wallpaper a room, and it’s a quick way to refresh a room or hide problems. Don’t be fooled by Victorian anaglypta’s either, which can look stunning but hide issues.

Another covering you may come across is Artex. This is a further 70s product designed to hide poor plastering finishes behind a textured fascade. To make things even better, pre-1980s Artex was made with our old friend white asbestos (11). Undisturbed behind paint this is fine, but sanding or removal risks hazardous dust. The asbestos can be identified and the Artex removed by a specialist company, using steam or preparatory products (12). Some people tackle it themselves, which I would not recommend unless you are willing to risk Mesothelioma. The other alternative is to plaster over the top to produce a new flat surface.

People also deployed Asbestos (the wonder substance) in tile form on ceilings or where drop ceilings have been installed. This is mainly found in commercial buildings, but we clocked some hiding in a renovation project (a right dogs-dinner of a property) and ran. Again it really needs a specialist company to identify. Some people choose to remove it themselves with commercial-grade PPE, but I would not advise due to the health and legal risks (do as I say not as I do) (13). Asbestos has to be disposed of safely, and rules vary depending on your locality on whether your local tip will take it.

The only real mention I’ll make of paint is lead-based paints. If your house was built before the ’70s it probably contains some lead-based paint. This is only really an issue if the paint is damaged, crumbling, and you go around licking it or sticking it in your mouth. Kids do. It tastes slightly sweet (Darwin at work). Lead accumulation isn’t something to mess about with, so keep on top of it and don’t let your kids peel it off and chow down (14).

Plaster

With the exception of paint, all of the coverings above can mask potential plaster issues. This is one of the reasons in recent property searches I’ve tended to prefer properties where I can see what I’m dealing with. Plaster problems fall into three main areas:

  • Dead Plaster

This is more an appearance than a problem itself. Traditional construction techniques were to use thin lathe battens nailed to the structural upright stud wall or brick. Movement of the wall, damp trapped in the plaster or superficial damage can all cause the plaster to lift away from the lathe. Attempts can be made to repair this by pinning the surround plaster and patching, but often it’s easier to hack off and redo with modern plasterboard and a fresh skim. On a ceiling this can suggest damp ‘falling’ from above, so a leak in a bathroom or roof (see below).

  • Cracked Plaster

Smaller cracks caused by structural movement in the property or just general wear and tear can be dealt with filler and a scraper tool. It’s important to make sure this is not the above, by lightly pressing on the plaster. If there’s a ‘give’ and movement then the plaster may well have peeled away from the underlying lathe, requiring more significant attention (15).

  • Damp

Damp. The blank chequebook to a cowboy builder. You’ll smell damp as soon as you walk into a house, that mouldy, fusty odour. It’s nothing to fear as long as you remember one rule. Damp has to come from somewhere.

Actually two rules. Rule two: rising damp is a sales tool. Don’t believe me? RICS agrees (16, 17). While osmosis happens, water won’t climb up a wall in a warm home because it has to. There’s such a thing as gravity. Damp proof courses are a waste of money. There I said it!

I’m not saying it doesn’t happen, but ground and construction conditions have to be really specific. Rising damp requires hygroscopic salts to be present in the minerals used in the walls construction and surrounding soil to create an environment where water molecules can move through osmosis. They’ll often leave crystals on the wall. ‘Rising damp’ as a ‘diagnosis’ got big in the ’60s and ’70s as a way to fix the problem of damp inside houses, right around the time lots of poor quality houses were being built and older houses being renovated by caking them in impermeable concrete (18). Same goes for cavity wall insulation. Older houses built of brick, stone and lime mortar were permeable. They would absorb moisture, they could ‘breathe’. If a wall was facing the predominantly inclement weather it could get damp, but it would dry out when the weather was dry again. The Victorians and Edwardians solved this by having an air-gap cavity wall. People in the C20th didn’t like the fact that walls would get damp, so they covered them in impermeable concrete render or membranes, plus plastic wall paints. They then added double glazing without air vents. This kept the rain and weather out, but also kept moisture produced by general day-to-day living in. If you breathe on a cold pane of glass it steams up. Multiply that throughout your home and you get condensation. This is the main cause of damp in homes. Other causes include:

  • Insulation – (I look forward to the class action lawsuits in 30 years as swathes of government-grant retrofitted old houses succumb to damp damage)
  • Heating on/off – must be constantly ON, but low temp = 15 degrees C – heating and then cooling creates an environment for condensation
  • Ground levels outside higher than inside
  • Broken guttering or missing downpipes
  • Vegetation growing near the wall
  • Trees creating shade and moist air near a wall
  • Lack of ventilation – double glazing, no vents
  • Blocked chimneys – fireplace blocked up, no vents
  • Furniture against walls creating cold, damp areas (18)

The answer is (as always) preventative maintenance and taking a nuanced approach based on the buildings construction. If you live in an older home you cannot expect it to achieve modern standards of insulation. Ensure you use permeable materials to allow movement of moisture in renovation work. Appreciate your higher utility bills as a trade-off for period features and room sizes. As a slight aside here, if buying a new property ensure that there are air vents in the glazing, air bricks in the walls and plenty of opportunities for air movement. Amongst high-end architectural design the move is towards Passivhaus standards, where moisture, dew points and ventilation are carefully controlled as part of holistic approach to construction (19).

How to tackle damp?

Unsightly mould around windows (like above) or on walls (below)? Check for vents in windows and doors. Check the type of paint or wall covering used. Often this is down to people not opening windows or allowing ventilation in an attempt to keep heat in. Crack the window or buy a dehumidifier (20, 21).

Peeling plaster, cracked and lifting paint? The is more likely to be penetrating damp, or a leaking roof or bathroom plumbing if it’s the ceiling. This is often enough to scare off most buyers, but look carefully. Penetrating damp or a leak has to come from somewhere (22). Is the external ground level higher than the internal wall? Are there boundary walls abutting the internal wall? It could be caused by a sill or beam bridging a wall cavity. Go back outside and look externally for cracks in render, damaged, eroded or poorly pointed brickwork, absent flashing or leaking gutters. This is why it’s often good to view a house in heavy rain. If it’s on the ceiling is there a bathroom above? If so run all the taps and check for drips. Is the roof in good condition, and can you view the loft in rain to check for water ingress? We had penetrating damp in a previous house caused by a) a wooden sill which was exposed to rain which soaked internally, and b) an external garden boundary wall abutting the damp wall, with next-door slightly higher than our ground level. Solved by rebuilding the external wall with damp proof tanking. I worked on another house where a ceiling would get wet when the wind blew from the North-East, as it then forced the rain up a pitch through the roof so it could drip down. Had to put a new roof on to solve that.

Electrics

Fuse board

Fuse boards, or more properly domestic consumer units, are a must check. They ensure electrical safety in your home, preventing you getting shocked (/dying) and the house burning down every time something short circuits. They’ve developed over time with progressive regulation changes. Up to 2001 most homes were fitted with fuse boards like the older Wylex one pictured, containing individual rewire-able fuses plus a main circuit breaker/ isolation switch. Since 2001 regs have mandated individual residual current devices (RCDs) protection for circuits, offering extra protection (23, 24). Any new electrical work being done to a property will require an RCD system to meet regs. Budget £300-400 for installation of this alone. My garage is currently (not working) on an old 1940s cast iron splitter unit like the last image piggybacked off the main RCD. I’m exploring ways to retain the unit as it’s bloody cool (25).

Certificates

Sort of an extension of the above, but it’s important to ensure any electrical work that has been completed to the property has been done so by an accredited person. All work should be certificated and ideally marked as tested. Any changes to circuits like adding new sockets, adding new outlets, changing lighting circuits etc technically needs this (26). Ensure you get these certificates when purchasing the property and when you have any work done. It’s often a requirement for property insurance, it can be in the fine print in the mortgages, and you’ll need it to rent the property out (27). Work without certificates opens up a legal minefield, and can knock serious cash off the property value. Copy and paste this to central heating, gas work and plumbing.

Wiring

One to check out as you look around. First, is wiring (and plumbing) fitted with surface trunking, or properly chased into the wall? Trunking fitted to existing wall is quicker, cheaper but looks less attractive (to me). Chasing into the wall is harder, slower and more expensive, but the flush finish looks smarter (28). This will give you an idea of the costs the owner has spent on this sort of work and the quality they’ve been happy with.

If you can see exposed wiring (try next to the fuseboard or under-stairs cupboards) look at the colour of the wiring. Wiring since 2006 has followed European and Australian code; brown is live, blue is neutral, green/yellow is earth. Prior to that we ran red live, black neutral and green earth (29). Since the 1960s most UK wiring has been sheathed in PVC. You can age your wiring on what it’s sheathed in. Prior to PVC was vulcanised rubber (notable by being black), before that was lead (notable because it’s… lead), and before that it was all sorts of odd stuff including cloth and paper-wrapped wiring (30). The cloth, lead and rubber all degrade, so will all be due replacement.

300px-cable_colours_1179-5

We made a not untidy sum ripping out the rats nest of old wiring in a previous property. Once we’d turned everything off at the main breaker we found cloth-wrapped, lead-sheathed (£££) and 1960s wiring had all been run in parallel circuits under the floor. The joys of renovation!

Other things to look out for are old plug sockets like the one below, featuring the earlier circular three pin plug. There were lots of variants of plug prior to the adoption of the ubiquitous three-prong plug and socket in 1947 (31). This means you can reliably date your wiring and definitely decide it’s due a rewire. The UK’s socket design is the envy of the world (32), so embrace it! Brown bakelite junction boxes, on the other hand, are not something to run from. They’re still in production, still used and definitely serviceable (33). I really like bakelite as I think it’s retro, but then I’m a bit weird.

15380076

586px-jbox_ashley_20a_4933-2

Plumbing

Where’s the stop cock? Check if there’s one in the house as well as one by your meter (if you have one) where it enters the property. You and your neighbours will thank you when you’re not screaming “How do I turn off the bloody water?” at 3am.

Pipes

The water pipe for your property is your responsibility from where it tees off the mains (34). Track it’s path throughout the house if you can, check for leaks and quality. Lead has not been used for pipes since the 1960s but most old houses will retain it somewhere (as it’s a pain to replace for various reasons). Most internal pipes will be stainless steel, copper or plastic. Old pipes may be iron. They all degrade over time (at different rates), so need periodic maintenance (35, 36).

Pipes in the UK for central heating are generally copper or plastic (often white). They come in various sizes. Size of pipe is an important consideration when fitting central heating, as you need to calculate the total thermal load on the boiler (the radiators) and the efficiency and flow rates (based on pipe diameter and water temperature) to ensure that your boiler has enough oomph to actually heat all the radiators (36, 37). There’s online calculators that can help you work out your heating requirement to spec this, such as here: https://www.plumbnation.co.uk/heating-calculator/ (38). Frankly, I just get a plumber.
Heating

While we’re on boilers, check if the property has one. There’s essentially two types of heating; wet and dry.

Wet

  1. Does the property have a wet system (i.e. radiators and a water boiler)?
  2. Is it gas, oil, coal, calor gas, solid?
  3. How old is it?
  4. Does it have a hot water cylinder or on demand?
  5. Has it been serviced?

conventional-boiler-explained

This is a whole other set of posts. Essentially most houses are on gas boilers, of which the most common is combi-boilers which do heating and hot water. There’s system boilers, which have a hot water storage cylinder (so are better for households that have multiple bathrooms and need lots of hot water at once), but are generally less efficient. Then there’s conventional boilers which have a water tank and a hot water cylinder (39, 40). Newer boilers across the range are generally much more efficient. Google the brand and model number and check the reviews. Older boilers can be very reliable if well maintained, so check for service record stickers. Budget between £1-4k for a decent replacement, and remember you really get what you pay for with boilers (40, 41). Budget more for a new install on a property without central heating.

Oil-fired boilers and calor gas systems are generally used for the estimated 4 million households that are not on mains gas. Oil is a bit more fuel efficient than gas, but can cost more to buy as the cost fluctuates and you have to store it in tanks (generally bunded green things) (43, 44). You can also run out if you forget to order more, or the roads are shut. Same rules apply re: servicing and replacement.

Dry

In the UK this basically means electric heating systems in rooms. Other countries and some UK commercial and old buildings will use a central furnace and hot air vent system, but they’re inefficient for our construction practices. Electric heating costs more to run than gas, and should really be considered only where gas is unavailable, where heating is infrequently required or where wet system installation is impractical. We’ve gone through various stages of electric heaters too, with electric radiant heaters (i.e. old bar electric bar fires), electric fan heaters, through night storage, oil filled and panel heaters. Fan, radiant and oil column filled heaters are usually portable and can be used to heat up the room you’re in at the time (45).

Panel heaters can be very minimalist and are therefore currently the fashion choice. They’re generally touted as ‘eco’, but given all electric heating systems convert electricity to heat what that essentially means is they don’t use much electricity as they don’t give off much heat. Night storage heaters look more like a radiator and work by heating up a ceramic brick during the night (when electricity can be cheaper if you’re on Economy 7/10 or similar) and releasing it during the day (46, 47, 48). They work much more like a conventional wet system, and get a room toasty warm. Budget £500 per heater.

There’s also ground-source or air-source heat pumps, solar thermal, district heating, underfloor heating, biomass systems and all sorts of others which I can go into in detail if people are interested (i.e. leave a comment to motivate me to do it!). I may do an eco renovation post in the future.

Summary

In part two I’ve covered most of the general building fabric and utilities considerations. This should give you an idea of what to look for on property viewings and in your own home. In part three I’ll cover room specific considerations (kitchen, bathroom etc), construction (chimneys etc) and layout.

The Shrink

References

  1. http://rockmystyle.co.uk/first-impressions/
  2. http://www.oldenglishdoors.co.uk/latest-news/doors-victorian-era/
  3. https://nonagon.style/the-easy-guide-to-exterior-front-door-styles-and-types/
  4. http://moderncountrystyle.blogspot.com/2016/02/how-to-sand-and-renovate-old.html
  5. https://www.doityourself.com/stry/how-to-repair-marble-floor-chips-and-cracks
  6. https://www.homebuilding.co.uk/polished-concrete-getting-it-right/
  7. https://www.allthingsflooring.com/2017/07/polished-concrete-vs-resin-floors/
  8. https://www.ambiencehardwoodflooring.co.uk/wood-flooring-guide/real-wood-or-laminate-flooring/
  9. https://fivestarfurnishingcare.co.uk/carpet-cleaning/do-my-carpets-have-carpet-moth/
  10. http://lusheclectic.com/woodchip-wallpaper-take-it-off-or-leave-it/
  11. https://en.wikipedia.org/wiki/Artex
  12. https://householdquotes.co.uk/removing-artex/
  13. http://www.asbestosguide.org/asbestos-ceiling-tiles/
  14. https://www.webmd.com/women/lead-paint#1
  15. https://www.homebuilding.co.uk/renovation-assessing-the-potential/
  16. https://www.architectsjournal.co.uk/home/-rising-damp-is-a-myth-says-former-rics-chief/5204095.article
  17. https://www.heritage-house.org/damp-and-condensation/the-fraud-of-rising-damp.html
  18. https://www.heritage-house.org/damp-and-condensation/managing-damp-in-old-buildings.html
  19. https://en.wikipedia.org/wiki/Passive_house
  20. https://www.which.co.uk/reviews/damp/article/dealing-with-damp/what-kind-of-damp-is-affecting-my-home
  21. https://www.theguardian.com/lifeandstyle/2008/mar/01/diy.homes8
  22. https://www.heritage-house.org/damp-and-condensation/types-of-damp-what-have-i-got/penetrating-damp.html
  23. https://en.wikipedia.org/wiki/Consumer_unit
  24. http://www.judgeelectrical.co.uk/domestic-electrical/explanations/about-fuse-boards.html
  25. https://www.flameport.com/electric_museum/old_equipment/revo_15_amp_splitter.cs4
  26. https://www.niceic.com/find-a-contractor/electrics-explained/what-are-the-different-types-of-electrical-certifi
  27. https://www.gov.uk/government/news/new-tougher-electrical-safety-standards-to-protect-private-tenants
  28. http://wiki.diyfaq.org.uk/index.php/Electrics,_Socket_Chasing_(Flush_with_wall)
  29. http://wiki.diyfaq.org.uk/index.php/Wiring_colour_codes
  30. https://www.electriciancourses4u.co.uk/useful-resources/history-of-wiring-colours-cable-sheathing-bs7671/
  31. https://www.plugsocketmuseum.nl/OldBritish3.html
  32. https://www.fastcompany.com/3032807/why-england-has-the-best-wall-sockets-on-earth
  33. https://www.cef.co.uk/catalogue/categories/junction-boxes-bakelite-junction-boxes
  34. https://www.ofwat.gov.uk/households/supply-and-standards/supply-pipes/
  35. https://www.homify.co.uk/ideabooks/564032/choosing-the-right-water-pipes-for-your-home
  36. http://wiki.diyfaq.org.uk/index.php/Plumbing
  37. https://www.diydata.com/planning/ch_design/sizing_pipes.php
  38. https://www.plumbnation.co.uk/heating-calculator/
  39. https://www.uswitch.com/boilers/guides/boiler-guide/
  40. https://www.hometree.co.uk/energy-advice/boilers/types-of-boilers.html
  41. https://www.lovemoney.com/news/12664/how-i-saved-1200-on-my-new-boiler
  42. https://www.boilerguide.co.uk/articles/what-size-boiler-needed
  43. https://www.which.co.uk/reviews/boilers/article/oil-boilers
  44. https://www.which.co.uk/reviews/home-heating-systems/article/home-heating-systems/oil-central-heating
  45. https://www.which.co.uk/reviews/electric-heaters/article/how-to-buy-the-best-electric-heater
  46. https://www.energywise.govt.nz/at-home/heating-and-cooling/types-of-heater/electric-heating/
  47. https://www.which.co.uk/reviews/home-heating-systems/article/home-heating-systems/storage-heaters
  48. https://www.cse.org.uk/advice/advice-and-support/night-storage-heaters

Property Renovation Lessons I

Gather ye round students.

It’s a peculiarly British fascination that we own our homes. Your home is your castle.

The default setting for those with spare-cash in their middle-years appears to be adding to your castle, working up the property ladder or buy-to-let. Yet it’s a route full of pitfalls, and BTL is fast becoming a mug’s game. MrsShrink and I have been fortuitous in turning a £20k deposit in 2014 into a £52k deposit this year (~38% annual return). We did this by buying a fixer-upper and working our socks off in our spare time. MrsShrink comes from a family of serial renovators, and spent some time learning painting and decorating with a professional family member. I come from building trade stock, and have plied the hod and trowel. I know which end to hold a hammer. So here’s the lessons from along the way that we applied to our second house purchase and renovation.

Location Location Location

  • Buy the worst house on the best street in the best neighbourhood you can afford

Classic Sarah Beeny this one. Waiting for the rough looking house to come up can pay dividends, however there’s plenty of property developers also looking to do this who probably have cash on hand to swoop quickly (1). As an alternative look at what has been on the market a long time, work out why and knock them down for it if it’s overpriced. That unappealing quality avocado bathroom could be £15k off the asking price for a fed-up seller. The primary issue here is that due to Sarah Beeny, DIY SOS, The Renovation Game etc every man and his dog thinks they’re a property developer by ripping out a 30 year old fitted kitchen and banging in a Wickes’ budget MDF job (2). Shame that.

  • Check the location using Rightmove’s school checker, look for local shops and public services like bus stops, libraries, parks etc (3).

This again is partly straightforward. Even if you don’t have kids being in a good school catchment improves resale, although worth bearing in mind that schools can turn around quickly. Less thought about are bus stops; schoolkids yelling outside your house can pretty quickly turn a night shift worker potty. Likewise parks and outdoor sports areas.

  • Check the local streets on your councils planning portal and local area development plan

Is your neighbour about to be converted to an HMO? Is that spot of derelict land at the end of the road turning into a block of flats with no parking allocated. This is exactly what is happening a few streets over from us, and the next-door owner is currently selling up as their current uninterrupted view over the city is due to be replaced by six stories of students. Those planning applications may be the prompt for the sale. Also check your councils local area development plan (or equivalent). This may suggest (as for our current location) there are planned infrastructure, zoning or conservation changes which could dramatically impact the appeal of an area.

  • Check long term floodrisk maps

Published by the government, this shortcuts going through the purchase process only to find on your surveys that your new dream home floods any time we get fair-middling drizzle. For England see here, Wales here, Scotland here (4, 5, 6).

  • Google Streetview is your friend

Check the roof, neighbours gardens for a sense of upkeep of the local area, evidence of building work and other nearby extensions. Four doors up may have a single storey extension that makes getting your planning permission in five years time that much easier. What’s the rear access like? Does Streetview show the rear lane blocked by idle taxi drivers?

  • Check the street at rush hour and mid-evening.

This is a bit involved, hell some people buy houses without seeing them! However if you go to a house viewing at 2pm on a Saturday the quiet tree-lined street with great school access may be a different picture to the school-run mummy-chariot car park. Likewise mid-afternoon could get very different to mid-evening if your excellent local gastropub has less than polite clientele.

Kerb appeal

It’s not just about from this (1):

to this:

Though that first impression counts. If the house looks down at the heel then a clean and a coat of paint may do wonders. Here’s a short list of what else to look for:

  • Doors and windows – wood/ PVC/ aluminium?

Is the wood rotten? Is the PVC discoloured or warped? Is the aluminium corroded? Are the windows double glazed and if so what state are they in? If there is misting inside the windows, like below, it suggests the double glazing has ‘blown’, and is no longer sealed (7). This will still be warmer than single glazing, but lets less light in and obscures your view! Budget at least £500/window for decent replacements (8). Sash windows and wooden casements will cost more, but sash are more desirable and wood will last a lot longer if maintained. On older properties original sash windows can be retrofitted with double-glazing by specialist companies, and this can work out cheaper than having new units made (9). Finally, check the state of the external locks, as many insurance companies will give you better rates for a BS-standard 5 lever deadlock.

  • External walls – clad/ brickwork/ render/ pebble-dash/ stone/ other?

We’ll start with brickwork as in many ways it’s simplest, and most of it also applies to stone. Older and underburnt bricks can suffer from years of frost damage and degrade, a process called spalling, so check for evidence of failure like below (10). Stone will also erode over time (particularly limestone in acid rain, and sandstone mislaid with a vertical grain) (11)

Check for evidence of degradation of the mortar in joints which will require re-pointing (12).

Look for external cracking. In previous centuries lime mortar was used which allowed a degree of flex in the joints due to it’s softness, but as building has moved to stronger and easier concrete/ cement the joints have become inflexible and unyielding. Cracking can have multiple causes but it usually down to building settlement. A degree of settlement is normal over the course of a properties lifetime, and particularly after periods of heavy rain or prolonged drought when the soil underlying the foundations moves. Small cracks are nothing to worry about, but bigger ones may suggest faults with the foundations which can require costly underpinning work. When next to gable walls it may suggest the wall is pulling away from the rest of the house, requiring insertion of wall ties and structural work. If around windows/doors then it may suggest rotting, movement or inadequacy of the sill. If in doubt get a professional survey.

 (13) (14)

Render can have similar issues with cracking as above, but is utilised to offer a layer of protection to the underlying stonework. This was traditionally used where unfinished structural stonework was rougher/ cosmetically poor, or in exposed areas – coastal etc. Breathable lime-based renders were used on older buildings, and replacement with concrete can cause damp issues. Newer buildings have concrete render, which will usually last about 20 years. Certain areas of the country (in my experience Cornwall particularly) have issues with render staining which requires cleaning (15). Budget a couple of thousand pounds, plus VAT and scaffolding costs for a re-render (16, 17).

Pebbledash and roughcast are essentially a different form of render where pebbles are sprayed on or added into the render. It came to be used during the Arts and Crafts Movement, but is often associated with ’20s and ’30s housing where it was used to cover cheap and quick brickwork (structurally sound but not aesthetically pleasing) (18). It offers a greater degree of weather protection than standard render. Don’t write off a pebbledash home. Removal is time-consuming (read expensive), but painting can make a huge difference (16)

Cladding is it’s whole other separate post. Replacing cladding is a good way to bring an out-of-fashion exterior bang up to date. Cladding may require planning permission under permitted development rules, or further consideration in conservation or national park areas (19).

  • Check for cavity wall injection points

Cavity walls, where there is an air gap between the inner and outer skins of the wall, became mainstream in the 1920s (20). The two skins are tied together either with bricks placed perpendicular across them, stones, or now with metal ties. The original usage was to prevent the passage of moisture into the building from outside. Insulation in the cavity became compulsory in the 1990s. In older houses is became common to use an injection method to insert insulation into the pre-existing cavity, leaving behind tell-tale holes where drilled (21). Cavity wall insulation divides opinion. The added insulation can in principal save a fair amount on heating. I dislike retro-fitted cavity wall insulation due to the potential for air and moisture-bridging, especially across damp courses lower down in the wall. This allows moisture to track across where there was previously an air gap, or through osmosis past the damp proof course. In modern houses the damp proof course sits below the insulation as it is inserted during construction, and with the use of modern backed insulation boarding it is less of an issue. Do your own research.

What lies above?

  • Check the roof

I won’t go into different roof materials, again it would be a whole other post. Stand on the other side of the street and look at as many elevations as you can see. Are there any slipped slates/ tiles? Any missing ridge tiles? These can all be sources of leaks if the roof lacks underlay (22). Most tile roofs can last 50 years if maintained, while slates can last a hundred (23). Budget £5000+ for new roof. This could escalate if the underlying joists and rafters are warped, damaged or rotten, indicated by a sagging area of roof. If the whole roof appears bowed under weight then it may be less of a worry; this is usually the result of replacement tiles being heavier than the originals, gradual settlement over time, or the effect of weight following a period of heavy snow (24).

Damaged or degraded flashing is a common cause of a leaky roof. I would bring binoculars to look at the roof when I was viewing a house. Lead is generally used and is very durable, but can fatigue or come loose. More rarely zinc, copper, aluminium or galvanised steel has been used. Budget £1000-1500 as a minimum for remedial work including labour, materials and scaffold (25, 26).

Chimneys… where to even start? Apply all of the brickwork damage section here, particularly spalling. The heat expansion and freeze/thaw effects combine to result in rapid degradation. Check for mortar breakdown around flashing at the base, a common source of ‘falling damp’ which is water leaking down the chimney breast. Check for vertical cracks in the chimney, vegetation, nesting animals, degraded cement caps and loose chimney pots or cowls. All can cause problems (27, 28). We’re currently trying to have our chimney repaired as preventative maintenance, with quotes between £1500-2500. Getting the agreement of our neighbour as it is a party wall has proved troublesome (rented property). We can’t go ahead until we have their agreement, but hopefully they’ll go half.

  • Check the gutters, soffits and fascias

Again a multitude of materials and a cause for ‘falling damp’. Traditionally gutters were cast iron and painted. These with maintenance can last many, many years. For a short period there were asbestos and fibre gutters, before moving over to PVC or plastic forms. These don’t last as long but don’t need the maintenance (and are cheaper).

Firstly, check for vegetation or any signs of blockages in the gutters themselves. This causes rainwater to overflow (a cause of damp), but is easily remedied with a ladder (or if you really fancy get a bloke with a pressure washer). Then check downpipes and ground-level drains (gullys). Are they securely attached and are they all connected. Again a common cause of internal damp is a leaking external downpipe (29). I hired an aluminium scaffold tower for a week for £120 this summer and had a great old time digging years of rotting vegetation and a few carcasses out of our blocked gutters, before rodding out the downpipe and running new ground-level pipes. I also took the opportunity to repaint our soffits and fascias. Cheap fixes and maintenance preventing future problems.

Your guttering will be attached to the fascia, with the soffit covering the underhang (30). These used to be made of wood, which would need to be periodically painted. In more recent years they’ve been replaced with PVC. Sometimes this covers and is fixed to a wood board, or is fixed to the older fascia or soffit. Watch out for where people have covered a rotting old fascia with PVC to hide it, as it will continue to rot and the guttering will fall out.

The hidden costs

  • Check utilities services

What do I mean by this? Check where the stopcock and meter are externally if it’s obvious. Check where phonelines enter the building. Both can be a pain to track down. More importantly – check the drains! Where does the external surface water drain to? Are there obvious access hatches to inspection chambers? Learn from my error, when I spent a wintry December week breaking up our concrete yard and digging down two feet to expose a broken salt-glaze pipe containing 12 foot of backed-up liquid faeces. If you’re planning to rework a property then knowing where the utilities is essential for plumbing planning.

  • Check the garden for Japanese Knotweed & other pests.

Look for the plant below, Japanese Knotweed. The effect on the value of the property is massive. It’s an invasive non-native species which is classed as hazardous waste, and any land containing it is counted as contaminated. It’s difficult to get rid of, spreads like wildfire and grows up to 10cm a day (28). A survey by YouGov and Environet UK estimates that 5% of UK homes have Japanese Knotweed (31). Finding Japanese Knotweed will knock 10% off that value of the property (31, 32, 33). Also take the opportunity to spot for evidence of wasps nests, bats, rats or mice.

Finalement

So that’s outdoors briefly covered. In part two I’ll cover indoors, reflecting on what to look for in your first and second viewings when considering a house, and the mistakes we did and didn’t make.

The Shrink

 

References:

  1. https://www.telegraph.co.uk/property/buy/should-buy-worst-house-best-street-turn-ugly-duckling-swan/
  2. https://www.dailymail.co.uk/news/article-3114485/Want-make-money-property-Buy-house-avocado-bathroom-Artex-ceilings-quadruple-investment.html
  3. https://www.rightmove.co.uk/schools.html
  4. https://flood-map-for-planning.service.gov.uk/
  5. https://naturalresources.wales/evidence-and-data/maps/long-term-flood-risk/?lang=en
  6. https://www.sepa.org.uk/environment/water/flooding
  7. https://www.eygwindows.co.uk/lifestyle-blog/why-does-double-glazing-mist-up
  8. https://www.theecoexperts.co.uk/double-glazing-costs
  9. https://www.renovategreen.co.uk/building-fabric/retrofitting-double-glazing-into-old-windows/
  10. https://www.designingbuildings.co.uk/wiki/Defects_in_brickwork
  11. https://www.heritage-house.org/damp-and-condensation/types-of-damp-what-have-i-got/damp-problems-caused-by-cement-pointing-of-brick-or-stone.html
  12. http://www.loughboroughproperty.com/repointing/
  13. https://www.diydoctor.org.uk/projects/settlement.htm
  14. https://gharpedia.com/diagonal-cracks-brick-walls/
  15. http://www.colinsquire.co.uk/red-stained-walls/
  16. https://www.homebuilding.co.uk/render-faqs/
  17. https://www.thegreenage.co.uk/cost-of-external-render/
  18. https://en.wikipedia.org/wiki/Roughcast
  19. https://www.homebuilding.co.uk/cladding-new-facades-for-ugly-homes
  20. https://en.wikipedia.org/wiki/Cavity_wall
  21. https://www.fixmyroof.co.uk/videos-and-guides/pitched-roof/repair-a-slate-roof/
  22. https://www.roof-stores.co.uk/guides/tiles-and-slates/roofing-tiles-slates-lifespan/
  23. https://www.designingbuildings.co.uk/wiki/Flashing_in_building_construction
  24. https://www.homebuilding.co.uk/roof-repairs/
  25. http://essexroofingandfascias.co.uk/portfolio-items/damaged-chimney/
  26. https://www.karnakcorp.com/roof-conditions/damaged-flashing/
  27. https://www.homebuilding.co.uk/repairing-gutters/
  28. https://www.jjroofingsupplies.co.uk/blog/what-are-soffits-and-fascias/
  29. http://surveyingproperty.blogspot.com/2018/#.XAATl9v7SM8
  30. https://www.independent.co.uk/news/business/news/japanese-knotweed-house-prices-property-value-mortgage-insurance-how-to-treat-a8557971.html
  31. https://www.telegraph.co.uk/property/uk/property-buyers-sue-50000-japanese-knotweed-problem-homeowners/
  32. https://www.moneywise.co.uk/news/2018-09-28/japanese-knotweed-blight-has-slashed-uk-house-prices-20bn

 

 

 

Quarterly Returns Q2 2018 – A Tale of Two Cities

For my first quarterly return, I’ll lay out the basic plan for the future, and then tell a little story of hindsight.

Quarterly return posts will supplement my monthly Financial Dashboard, but with a different focus. While the Financial Dash mainly deals with my day-to-day, week-to-week goals, budgeting, the Quarterly Returns will cover investments in detail and look at my yearly targets. Here I will track purchases and sales, document my investment strategy, and discuss re-balancing and changes over time. Inevitably there will be some overlap, but I’ll try to minimise this.

Eventually the plan is to display some pretty graphs of exposure, increase over time etc. As I’m still developing my spreadsheets, for now I’ll just make a nice list.

Q2 Returns:

  • Cash Savings Accounts £400
  • Investments £0
  • Esoteric tat £3000

Lovely.

Yearly Targets:

Goal 1: Build an emergency fund.

As per the r/UKpersonalfinance flow chart, I’m working towards building an emergency fund (1).

I currently have a month’s outgoings in our joint account, and working towards two months. I’m chipping away at this, but now I have a month’s worth tucked away (and completed some fairly massive life-costs) I’m going to target debts.

Goal 2: Pay off debts

At the start of Q2 my short term debts were £2.5k to family and £4.3k on 0% interest credit cards. These are now £1,250 and £4.1k respectively. The aim is to bring my credit card debt down gradually, but as it’s at 0% for another 2 years I may indulge in some stoozing (2). I can also now close two redundant credit cards now I have no upcoming credit applications.

Goal 3: Reduce superfluous outgoings.

I’ve managed to reduce my living costs (see below), but an area for future work.

Goal 4: Commence investing!

The target for Q3.

A Tale of Two Cities

Inspired by Ermine’s tale of a dumb property purchase, here’s mine (3). This is a story of opportunity cost, the British love affair with owning our own home, and how as a person sometimes buying is not the right thing to do.

As mentioned in my Musing On… Mortgages post, MrsFireShrink and I were lucky enough to purchase our own home in our mid-20s. There are plenty of reports and opinion pieces currently doing the rounds, detailing how a third of my generation “will never own a home”, how it’s a housing crisis and changes must be made to the broken market (4, 5, 6). Wind back to 2014, and those worries are starting to bubble to the surface, but not yet in the public consciousness.

In those heady, pre-Brexit, pre-coalition-of-the-contemptible days house prices are still rising. Property is still a sure thing. We’re over the 2008 wobble, Dave Cameron is in charge and ‘the city’ and financial markets are looking bullish. Every man and his dog is flipping the equity from their own home into a nice little BTL side-hustle, an earner for retirement, inheritance for the children. The market looks nice and rosy, house prices always go up, right…. right? (7):

Enter stage-left MrsShrink (then MissFrugalStrongIndependentWoman) and I. We sat and planned our future together. I was living in work digs, 150 miles from MrsShrink. These were particularly miserable NHS digs, built after the war and updated when things broke, sometimes (for example see below) (8). Lying on my lumpy single bed as snow, rain and hail came through the single-pane aluminium-framed windows (which you couldn’t shut properly) I dreamt of a home to call my own. Heating that wasn’t on flat out, 24/7, even in midsummer. An oven that worked, A gas hob younger than me. A fridge lacking CFCs, etc.

The saving grace of these digs was that they were cheap. Really cheap. 90% of my earnings was paying off accumulated student credit card and overdraft debt, or sitting in our first, joint, savings account. MrsShrink and I knew nothing of investing, and to this day MrsShrink is fearful and does not trust the markets. Our plan saw me moving back to join MrsShrink in the city we had studied in, which we had both fallen in love with.

MrsShrink was equally frugal. She had moved in with a friend who had recently bought and was renovating a small terrace. While it was uninhabitable she was staying at his parents, paying a tiny rent, but not ideal accommodation. 6 months in and she was desperate for her own space.

With a small gift from MrsShrink’s mother we had enough for a deposit. The city we studied in was located in the South. A port city, bombed in WW2 and with high unemployment. Lively, cheap to live in, plenty going on and lots surrounding. Rows of identical, overengineered victorian terraces meant housing was around the national average despite being in the South. Early on we decided we wanted something old, with features, with potential but a manageable project.

The house

We spent six months viewing 20+ houses. We watched perfect houses get snatched up by people outbidding us. We viewed some real shitholes, rotten floorboards and collapsing joists. We stretched a bit and leveraged to 90% LTV on 200k. We planned to be there until we had kids, so fixed for 5 years. In 2014, everyone predicted an interest rate rise.

Eventually we found a place. It was a bad house on a good street, with agents pushing for much more than it was worth. In an area of high demand it had been sat for a year. [Warning sign]. It was vast, full of old features and 10% over budget. It also stank of fags and had some qwalitee 90s additions. Faux plastic panelling and fibreboard partitions anyone? [Warning sign]. The electrics had recently been done (cheaply) as had the central heating (cheaply) [Warning sign].

All this didn’t matter. We were in love with it. We could own this big house on this lovely street, all our own! We’ll renovate it, start a family, make loadsa-cash.

The troubles

We put down an offer for 5% under asking, which was accepted after a bit of haggling. We organised a full structural survey. This showed some damp and rot in the downstairs structure, so we went back to the vendors and knocked another 5% off. We were now on (just) budget. We weren’t fazed by this, every old house needs some work, and for houses where the vendor has been there over 10 years a survey may be the first time anyone looks for problems for a while.

The survey also stated that the walls were covered with thick wallpaper, as were the ceilings, and so the structure was impossible to examine. Fair enough said we. [Error]. As first time buyers we were a quick sale. Besides we were now desperate to be in. We wanted our house. [Error]. We completed within two months.

Walking back into the house for the first time, we were hit by a wall of fag-smell. Didn’t matter, we loved it. We held a party where we provided pizza and equipped all our mates with wallpaper stripping kit. The nicotine/tar ran out of the walls in rivulets. We all got contact high. Once we removed six layers of wallpaper and wood chip (spawn of the devil) the resultant 120-year old plaster was absolutely dead, falling off in chunks.

So it continued. I won’t document it all, but selected lowblows included:

  • Undiscovered rotten joists
  • Woodworm
  • Live bakelite or cloth-wrapped wiring throughout which hadn’t been removed, just run as parallel circuit
  • Replastering throughout as rooms sequentially were found to have collapsing or damaged plaster
  • Drains collapsing, prompting the external stack to back up and digging out 12ft of liquid shit in midwinter
  • Fibreboard dropped ceilings in bedrooms hiding fire damage
  • Asbestos boarding
  • Boiler wired through twist-and-tape off a socket, with no fuse
  • Porch collapsing due to rot hidden behind a fascade

Lots of the work I completed myself. The sleet helping to wash off six month old faeces was a particular joy. We dropped about £15k over three years completely renovating. I hate to think what it would cost in labour, as I did 10+ hours a week on it in addition to my 60 hour work week.

The move

Three years into owning our home I was offered my dream job, one that I didn’t believe would ever happen, working with some of the top people in the world. Snag; it’s 150 miles away in another city. After discussions, I moved to pursue it, with MrsShrink following when she found work. We spent the following six months finishing the house to a high standard travelling the 150 miles at weekends. We never got to appreciate the fruits of our labour.

Facing financial pressure, paying rent and bills on one home and a mortgage and bills on an empty one, we put it on the market. We had to port our mortgage to avoid a hefty 5% early repayment charge. An asking price offer made within a week of listing fell through three months later, days before exchange. Another offer fell through a month later. We finally accepted an offer 10% under asking price six months later. We completed two months after that, exchanging on our new property on the same day.

The moral

Why am I telling this story? Through sweat, tears, blood and new grey hairs we made £15k net profit. About what the house would have gained through local market forces anyway. We have more equity in our new property and gained a lot of experience for the purchase of the current house:

  • Don’t overlook flaws because of love unless you’re willing to pay for them in time, stress or money
  • Don’t assume that a survey finds everything (or is even worth the paper it’s written on)
  • The more layers of cosmetic presentation/ furnishing/ detail in a house, the more it can hide
  • You may not make money on property
  • You can’t tell what tenants are like until you see how they live
  • Market estimates are dung; something is worth what people are willing to pay for it
  • Get paperwork evidence for everything
  • Houses naturally depreciate over time, they fall down if uncared for

Ultimately we learnt the hard way that early in life mobility for work can be a greater asset than equity. The British romanticism of owning our home hamstrung us and tied us to a financial obligation. As young professionals we could have been better served by considering our mobility as an asset. Don’t settle down until you really know you’re going to. There endeth the lesson for 20-somethings.

Reference:

  1. https://www.reddit.com/r/UKPersonalFinance/
  2. https://en.wikipedia.org/wiki/Stoozing
  3. https://simplelivingsomerset.wordpress.com/2014/04/06/when-not-to-buy-a-house-a-cautonary-tale-from-a-quarter-of-a-century-ago/
  4. https://www.moneywise.co.uk/news/2018-02-16/homeownership-among-millennials-plummets
  5. https://www.theguardian.com/money/2018/apr/17/one-in-three-uk-millennials-will-never-own-a-home-report
  6. https://www.theguardian.com/society/2018/apr/28/proportion-home-owners-halves-millennials
  7. https://www.ukvalueinvestor.com/2018/06/uk-shares-uk-property-better-value.html/
  8. http://s0.geograph.org.uk/photos/41/10/411045_a8075d90.jpg