The disastrous property trend that could leave you homeless

Soaring house prices have priced us out of taking the next step on the property ladder, so millions of Brits are undertaking fairly massive projects on their current home instead. This is a decent way to build value in your home, but a new study has revealed that the approach we are taking risks actually destroying value. And if the worst comes to the worst, it could leave us homeless altogether.

See also: Homeowners admit to DIY disasters

See also: House price growth most evenly spread for 40 years

See also: Family homes near the UK's top comprehensives

The study, by Co-op Insurance, found that 57% of homeowners have had extensive work done on their house, but 15% couldn't remember whether they had obtained the right permissions for the work. Almost one in five of those who'd had a loft conversion or extension couldn't remember getting the proper paperwork. Around one in five didn't even bother telling their home insurer about the changes.

When asked why they hadn't had the right checks and paperwork done, one in five said they didn't know they needed permission, while 14% of people said it didn't even cross their mind, and 9% ignored it because they thought it would be too expensive.

This appears to be a trend that's set to continue. Some 43% of homeowners say they are planning future building work, and of those, 18% won't bother with permission. Some 29% said they know they'll get away with it, while 25% say they're worried that getting permissions would slow them down.

The risks

There are some serious risks involved in getting work done without permission - or without telling your insurer. Caroline Hunter, Head of Home Insurance for Co-op Insurance commented: "It's really important that homeowners get the correct permissions and let their insurers know when extensive building work such as conservatories, extensions and loft conversions are taking place. That way, if anything was to go wrong with the property, either whilst the building work is ongoing or once it's completed, it will be covered by their insurer."

In other words, if you don't get the right permission, and if you don't tell your insurer, then they can legitimately refuse to pay out if something goes wrong. If the work causes serious structural damage to the property, then it could cost tens of thousands of pounds to repair, and without insurance cover, it could leave families without the cash they need to make their home habitable.

Even if they "get away with it", getting work done without permission can come back to haunt you. If the neighbours complain to the council, they can force you to apply for retrospective planning permission. If this is denied, you would have to put the property back to its original state.

Even if nobody complains, you will run into issues when you come to sell the property. You will need to get the right agreements and approvals in place for any changes, or a buyer won't touch the property with a barge pole.

The study showed that a quarter of people can't be bothered with permissions, in case it slows a project down. Clearly, if you don't get permissions, then it could end up costing you an awful lot more to work things out later - and could cost thousands of pounds to put right.

Ask anyone for whom things went wrong - they'll tell you that a bit of time sorting the paperwork before you start is well worth every second.