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Landlords Urged to Buy Correct Level of Insurance Cover

Thursday, May 3rd, 2012

Accidental landlords and first time entrants into the property rental market are being warned about the dangers of not having the correct type of property insurance.

The warning comes after the continued financial downturn sees many people reluctantly become landlords when they can no longer afford to live in their own home and can’t manage to sell it. David Lawrenson works for a leading online letting agent and says many people coming into the rental sector look to keep their overheads to a minimum and don’t think long enough about the insurance they require. He said: “A general property insurance policy simply does not cut the mustard. It doesn’t cover all of the risks that would apply when you’re letting out a property. It is important to make sure that landlords have the correct level of cover. In most cases buy-to-let insurance is not much more expensive anyway.”

Of course the fact of the matter is that in many cases having the wrong type of insurance or not buying enough cover of the correct type of insurance is a complete waste of money. The homeowner will find that the insurance policy will be invalid and will be unable to claim at all. Proposed changes to the rules and regulations governing the private housing sector have been discussed in the last few days by Communities Minister Grant Shapps which would impose even more regulation on landlords. However, landlord organisations see this as a good thing as it may make the sector take a more professional outlook. Regulations concerning fire and other health and safety issues may be tightened and in return the obligations on tenants to respect a landlord’s property ensconced in law. In the meantime landlords across the UK must ensure they not only have the correct type of insurance to protect themselves and their business but also their tenant.

Tags: accidental landlords, Insurance Cover, letting
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Landlords Could Lose Under 25 Market if New Housing Policy is Introduced

Friday, April 20th, 2012

Property investors with an interest in landlord insurance believe new Government proposals aimed at the jobless, could have a serious impact on the livelihood of many buy-to-let investors.

Provisions in the new Welfare Bill mean unemployed people under the age of 25 will have their housing benefit cut. Whereas before young unemployed people renting in the private sector received Local Housing Allowance (LHA) in accordance with their rent, they now only receive LHA to the equivalent cost of someone renting a room in a shared house. It has already caused problems for many tenants in the private sector and landlords have in some cases had no option but to evict people who cannot pay their rent.

However, things could actually get worse. A Government think tank is now considering a policy which would see single under 25s denied housing benefit completely, making them stay in the family home until they could fund their own housing.

Graham Kinnear, Managing Director at Landlord Assist, a company that provide a variety of services to the buy-to-let sector, believes that it would not only be tenants that would suffer if the new scheme is introduced. He said: “If the Government was to progress with this proposal it would force thousands of tenants into rent arrears, hit landlords financially if they don’t receive rent payments, and have a damaging impact on the buy-to-let industry as a whole. Furthermore, it will also deepen the housing shortage for the young as landlords and letting agents will be even less likely to accept anyone out of work who is under 25 as they will be unable to pay any rent at all.”

It is thought that any changes would take several years to be implemented but would certainly fit in with the present government’s policy of “making work pay”.

Tags: financial risk, government, housing benefit, Private Rented Sector, tenants
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Barratt Offer Unique Deal to Southampton Landlords

Friday, February 24th, 2012

A developer has offered any potential landlord the chance to own a new Southampton home which comes with a rental income that is guaranteed for six months. Barratt are offering landlords the chance to own a two-bedroom apartment for £155,000 with a promise that they will then immediately rent it back from the landlord for £650 per month.

Barratt feel investors are starting to return to the local property market and believe the area has not seen this level of demand from buyers outside of London since the credit crunch of 2007. Landlords will appreciate the scheme as it will give them time to source a suitable tenant and affordable landlord insurance. The landlord will also benefit from the Barratt guarantee that will see the developer keep the property in pristine condition as they are the only major house builder who offers a five year internal fixtures and fittings guarantee.

Rents in Hampshire are rising rapidly and are expected to carry on increasing in the coming years. This means that rental homes are increasingly in demand from landlords who take the view that the direction of prices means they should expect to be sitting on a profit in four or five years’ time. Having a minimum six-month agreement with Barratt means they can get off to a good start with the apartment.

Barratt senior sales manager, Zak Long, said “At the moment they are being used as sales offices. This represents a fantastic opportunity for someone to invest and then we will rent it back for more than they are likely to receive if they rent it privately. The apartment will continue to be used as a sales office until all of the properties are sold at Hollybrook Lodge. The lucky buyer will receive a guaranteed income on their new investment and we believe it’s an offer that cannot be matched.”

Tags: Hampshire, landlord insurance, property, Rental Market, Southampton
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Less homes coming on the market but still no increase in prices

Monday, January 30th, 2012

As the rental market goes from strength to strength, more gloomy news from the housing sales market promises yet more opportunities for the ambitious landlord.

A report out today by property analytics outfit Hometrack suggests the housing market is no nearer a recovery and in fact average house prices in the UK could see a reduction of around 5% in 2012. The news, although bad for sellers, could signal even better pickings for property investors looking to buy landlord insurance on new projects.

The latest monthly figures from the Hometrack report show a 10% drop in new homes coming on to the market in January compared to December. That news is bad enough in itself, but November and December were also down on previous months. The financial constraints being exercised by the banks towards lending, and the worldwide financial downturn is driving the housing market in the UK downwards and experts still cannot see light at the end of the tunnel.

The report also showed that houses were taking longer to sell and that prices on average had not moved for around 18 months. However, this is a UK average and in that time London and the South East has seen a marked increase in property prices, which suggests the rest of the country, has experienced a drop.

Richard Donnell, head of research at Hometrack confirmed this, saying “The survey reveals a market dogged by uncertainty. On a national basis house prices have not increased over the last 18 months, since June 2010. However, there was a small rise in London prices, which offset falls in other regions. The relatively positive housing market in the capital is set to continue through 2012 as the Olympics effect continues to boost interest in the City’s property. Overseas buyers looking for a safe haven in the midst of global uncertainty will continue to invest in the capital and the super prime postcodes of central London.”

Tags: homes, House Prices, landlord insurance, landlords, property
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Homeowners becoming reluctant landlords as property market stagnates

Monday, January 9th, 2012

The number of “reluctant landlords” is on the increase as the amount of properties coming into the rental sector simply because they cannot be sold is threatening to flood the market.

ARLA (Association of Residential Letting Agents) say that during the third quarter of 2011, almost half (49%) of members surveyed reported a noticeable increase in the number of unplanned lettings as property owners are turning to the privately rented sector because they are unable to sell their home. In England, this trend was more noticeable in the North West and North East where respondents reported an increase in rental property coming onto the market because the home has been on the market for so long without being sold. Members in Scotland, Wales and Northern Ireland also reported an increase. The only exception throughout the UK is Central London where the increase was only 17%. ARLA believe that this means some homeowners are having no other option but to become a landlord for the first time, many of them reluctantly.

ARLA report that the most likely types of home to be brought to market by a reluctant landlord are detached and semi-detached houses, while least likely are studio flats. They also suggest enlisting a managing agent who will be able to find and vet tenants as well as managing the property. ARLA also urge any property owner who has no experience as a landlord to get a landlord property insurance quote before committing to any one company.

ARLA President, Tim Hyatt, said “Letting a property is an excellent way of generating consistent income from your property, if the correct approach is adopted by prospective landlords. However, letting is an unregulated industry and there can be pitfalls for both landlord and tenant, including loss of monies. While we are, of course, happy to see an increase in the number of landlords, it is vital that every landlord – reluctant or keen – seeks expert advice before embarking on a rental arrangement. In particular, we would advise anyone considering renting or letting a property, to consult a licensed ARLA member.”

Tags: ARLA, landlord property insurance quote, landlords, Property Market
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Landlords should ensure their investment is sound

Thursday, December 29th, 2011

In the rush to make cash out of the booming rental market some landlords are risking their businesses by making rash decisions, according to a leading group of surveyors.

The Royal Institute of Chartered Surveyors is warning landlords that when it comes to buying new properties they should surround themselves with protection. Not only should they make sure they have adequate landlords insurance on the property but they should take steps to ensure the home is a sound investment before they conclude the deal.

The warning comes after RICS have noticed more and more landlords are buying properties that need work doing to them in a bid to add more stock to their portfolios. They say that prospective investors should remember that estate agents act for the seller and will not always be forthcoming in pointing out faults with property. Instead they suggest landlords should either purchase some sort of condition report on the house. A Home Buyer Survey and Valuation comes in at around £400 or a more comprehensive Building Survey which starts at around £700.

David Dalby, a director at RICS, said “Landlords could be without a tenant for several months while repairs are being carried out and it could be even longer if subsidence is discovered, we are warning private landlords to know what they are buying and are advising agents to recommend surveys to all their clients. The cost of a survey is a small price to pay for peace of mind and will prevent landlords from being hit with unforeseen costs. Surveys can even be used to negotiate the sale price if any significant faults are discovered. Landlords who show surveys to insurers are also likely to benefit from lower property insurance premiums.”

RICS surveyors are closely regulated and are required to have professional indemnity insurance which helps to protect landlords if the surveyor fails to detect a fault which later becomes apparent.

Tags: landlord insurance, property insurance, RICS
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Number of empty homes in Boston is increasing each quarter

Wednesday, December 28th, 2011

Latest statistics show that the borough of Boston has 411 long-term empty properties, with 295 of them being empty for at least twelve months. The high number is yet another reason for the deepening housing crisis in Boston, which has seen many people unable to either afford a home or move up the boroughs housing waiting list.

Most mortgage lenders are still looking for a deposit of at least 20%, meaning the average first time buyer in Boston will face seven years of scrimping and saving before they have enough for a deposit on even the cheapest properties in the area. Experts say that more new homes are needed to help the problem, but as there are so many empty homes in the borough, others feel that these should all be brought back into use before new land is built upon. Almost 250 of the empty properties are owned by private landlords and the others are owned by a registered social landlord, including housing associations Boston Mayflower and Longhurst.

Nathan Black, spokesman for Mayflower, which owns 31 homes which are currently not in use, explained there is often good reason why homes are empty saying: “We have thirteen prefabricated bungalows in Boston, which are vacant due to on-going refurbishment work being carried out on them, one property in Sutterton, which is empty due to it being for sale subject to contract and 17 sheltered accommodation properties, which are vacant due to on-going refurbishment work being carried out on them.”

Boston Council says they are working hard with other bodies to bring the homes back into use, with the help of a coalition grant. Returning empty homes into use by offering the owners help in bringing them up to standard is a policy being adapted by many councils across the UK. Private landlords are being traced and offered monetary reward to get the properties up to scratch, covered with landlord insurance and habitable for those needing shelter. However, many councils are qualifying the offer by placing time limits on the improvements and some landlords are still proving difficult to persuade.

Tags: Boston, empty homes, landlord insurance, property insurance
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Poor to be hit hardest by size criteria scheme

Friday, December 16th, 2011

Poor families living in social housing that is protected by landlord insurance look set to be penalised for staying in a property that the Government deems too large for their needs. The Coalition had previously claimed that the families would lose an average of £620 but now that is set to rise to £1400 a year.

The new “size criteria” scheme has come under attack by the NHF (National Housing Federation) who are worried for the huge number of families who are going to struggle with the cuts. Based on cuts of up to 25% of a family’s housing benefit that the Coalition plan to introduce in 2013, a household who are classed to be under occupying a three-bedroom home in the UK will face losing up to £22 a week. The household would then be forced to choose between finding the money from elsewhere in their benefit budget or moving out of their home. The problem will be even worse in London where a family under occupying a three-bedroom property would have their housing benefit docked by £1385 a year, which will be the biggest penalty of any region throughout Britain. Separated parents will also be penalised for keeping a bedroom for when their children visit.

David Orr, chief executive of the Federation, said “We have been deeply concerned about this bedroom tax for some time but these new figures show the damage will be far worse than previously thought. Thousands of hard-up families face penalties of up to £1400 a year simply because the Government have deemed their homes are suddenly too big for their needs. This will have disastrous implications for huge numbers of people already struggling to make ends meet in the tough economic climate, including foster carers, grandparents, disabled people and smaller families.”

The NHF is calling on the Coalition to make the rules more flexible and allow one additional bedroom above that permitted by the criteria, saying the present rules could damage the fabric of home life for many disadvantaged families.

Tags: landlord insurance, national housing federation, NHF, property insurance, Size criteria scheme
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New service offers savings for landlords

Tuesday, December 13th, 2011

At a time when property investors are experiencing higher rental achievements than ever before, a new service set to be launched in January offers to save them even more cash when it comes to advertising their properties.

Movestart.co.uk is an online letting service which promises to be of interest to any property investor with a need for property insurance. The website is offering to advertise rental property for just £49 which includes a tenant referencing service in the price. The backers of the website believe the one-off price will see thousands of residential landlords advertise their properties with Movestart who say the properties will then go on to sites such as Zoopla and Rightmove.

Landlords will also be offered competitively priced services for all types of certification and Movestart are sure their service will be a hit. Peter Lamb, speaking on behalf of the owners, said “We took a look at the market and tried to develop a truly trail-blazing service. By combining tenant finding with tenant referencing, we can be certain that we are proposing the most suitable tenants for our clients’ properties at a fraction of the costs that are normally incurred.”

The pricing of the service will certainly compare favourably with those charged by local newspapers who expect a fee every seven days and it is roughly half the price that online agents already charge just for advertising a property. The question the website may have to address is just how big a market they have, because the current demand in the letting sector means many landlords do not need to advertise at all.

One person who is sure is Graham Kinnear from Landlord Assist. His company will be providing the tenant referencing and he said: “We are delighted to have been appointed by Movestart as the sole referencing provider for their online venture. Property marketing websites are predominantly aimed at homebuyers, so we are thrilled to see such a comprehensive portal launched for landlords looking to target new tenants.”

Tags: landlord insurance, landlords, Money saving, property insurance
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Work starts on renovation project

Monday, December 12th, 2011

A regeneration scheme that is costing over £200million has at last got under way. Bulldozers started demolishing empty properties as residents gathered to watch the start of work that will see six-hundred homes demolished to make way for new housing.

Residents expressed their joy at seeing the first steps of the huge project begin and all of them firmly believe the new development will make their area a much more pleasant place to live. New homes will be built in place of the demolished houses, with the first expected to be finished early in 2013. The Craylands Estate is located in the South East of Basildon and was built in the 60s as a medium density estate with a mix of four storey flats, terraced blocks, shops and community facilities. Now over four decades old, the estate has over time developed a reputation for poor quality housing and inadequate social amenities.

Maggie Forder has lived on the estate for 28 years and she said: “I’m absolutely overjoyed and can’t believe it’s finally happened. This is the first big change we’ve seen on this estate and it’s going to change it for the better. Nobody wants to have empty homes where they live. There has been a lot of trouble on the estate over the years, so it’s nice to see a new beginning. There is community spirit in parts already, but I hope this improves the community spirit over the whole estate and gives people a better place to live.”

Developer Swan Housing are working with Basildon Council and the Homes and Communities Agency on the project. All three are delighted to see the demolition begin and they see it as evidence that real progress has been made. Now the project managers will turn their attention to renovation, house building and of course landlord insurance as residents are rest assured the process is now more than just a pipe dream.

Tags: landlord insurance, Renovation
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