Moving home, the Fourth Horseman of the Financial Apocalypse, is a nightmare. Here's how to deal with it

Moving house is one of the most stressful domestic events that can be undertaken voluntarily. And it has considerable financial implications too.

An Englishman's home may be his castle, but it is also likely to be his single largest asset. (Pension Funds are in contention, but it is difficult to feel you 'own' a slug of an occupational scheme). A new house means a new mortgage. A new mortgage leads to new repayment schemes, new protection policies and new outgoings. All this and the wretched thing can go down in value as well. And then there is the instant upheaval of estate agents and removal firms.

An experienced removal operative once told me that two moves equals one fire. In other words, move home twice and the effect is much the same as the neighbourhood pyromaniac lobbing a molatov coctail through your windows. Aside from the damage to a Chippendale dining chair, inherited from grandmother, there is the gouge along that Japanese dining table, bought with profits from the 1986 bull market, and destined, you hope, to be an antique.

Owning your own home is really a savings plan. Few can afford to write out a cheque for a semi-detatched villa in the south east without some financial help.

Once upon a time this help would come in the simple form of a repayment mortgage. But high tax led a largely life assurance-driven savings industry to devise more complex ways of generating capital to repay the mortgage while still ensuring full tax relief throughout the life of the loan. But with lower interest rates and mortgage relief restricted to just 15 per cent of the first pounds 30,000 borrowed, this seems too much trouble for not enough.

Even the king of the capital creators, the endowment policy, has fallen into disrepute. Bonuses - which in theory cannot be taken back - were based upon the extravagant returns which high inflation delivered. But bonus rates have fallen, leading to many scare stories - low-cost endowment policies might not provide enough cash to discharge the mortgage in full.

As someone who has received the benefit from these policies recently, the death of this form of debt repayment seems highly exaggerated. But then, perhaps it will be different for more recent borrowers.

Low-cost endowments are simple in concept. A term assurance policy with a decreasing sum insured is taken out. As the life cover falls it is replaced by accrued bonuses on the endowment policy. The endowment provides a basic sum insured, usually less than half the value of the mortgage.

Endowments polices are relatively low risk. Premiums are spread across the full range of investment options (including cash, fixed interests. UK and international equities and property) with a conservative policy adopted for the accounting of investment returns.

More recently the significant and continued outperformance of equities has led to Personal Equity Plans becoming a common and arguably efficient savings vehicle, while pensions have become a source of captial to repay mortgage debt.

In many pension schemes the option exists to take 25 per cent of the value of the fund in cash, tax free, on retirement. So in most cases there is the added advantage of full tax relief on contributions to a scheme creating assets to repay borrowing.

In some industries mortgage subsidies are not uncommon. As with moving jobs, these have to be taken into account when moving house. They may prompt you to take out a larger mortgage. But with interest rates historically low, their influence has diminished.

So, move house and you can be certain that this fourth horseman will be one of your first visitors, trotting up the drive and bringing a full range of borrowing and savings problems, covering such diverse products as PEPs. Pension plans, endowment policies and life assurance.

No wonder Britain's insurers were so keen to buy estate agents. They reasoned that, since the biggest single financial deal the average person undertook is the purchase of a home, the resultant transactions would keep them in work and commission for the foreseeable future. And their customers would move again (the average British family moves once every eight years.)

The author is Chairman of Greig Middleton's Investment Strategy Committee.