Landlords Insurance « PropertyQuoteDirect – Landlords & Buy to Let Insurance Blog

Archive for the ‘Landlords Insurance’ Category

Letting to Young People

Saturday, December 3rd, 2011

The number of first time buyers who are struggling to get a mortgage and save a deposit to get onto the property ladder is increasing, so it’s no surprise that a large proportion of the rental property market is under the age of 35.

It would be helpful to think about how you could market your property to this age group and what types of people might be renting your property.

Young Professionals

A lot of under 35s are young professionals, maybe graduates or school leavers looking to move away from home. Many young professionals will look for a property that’s convenient to transport, as they’ll have to commute to their work. Because they are usually always on the go, many would really appreciate facilities in the property like washing machines, dryers and dishwashers. It’s always important to screen your tenants and conduct proper credit checks, though it’s unlikely that you will encounter difficulty with any tenant.

Students

Having a property near to a good college or university will be sure to bring you income. Most students are laid back when it comes to any problems to their property, however, students are known for occasionally causing breakages to property, so to minimise the impact of these accidents, you should take out landlords insurance.

Letting to the under 35s might be where the bulk of your rental income will come from, so you should be well kitted out to provide a property that is functional for young people.

If you are considering letting to younger people, marketing online can be a good tool for attracting them and it’s worth taking time to research the marketing potential of sites online.

Tags: Landlord Insurance, landlords, Students, tenants, young professionals
Posted in Landlord Insurance, Landlords Insurance | No Comments »

Private landlords in the firing line as HMRC target tax dodgers

Thursday, November 10th, 2011

Landlords across the UK have been warned that they will come under the beady eye of Her Majesty’s Revenue and Custom (HMRC) officials as the Government look to find extra cash from an industry that is currently booming.

Task Force set out for Wild West!

The Government announced several months ago that they were employing hundreds more tax inspectors to cut down on tax dodgers and it appears that property investors with an interest in landlord insurance are in the firing line as the buy-to-let sector is one of the first targets. Unfortunately for landlords in the North West and Wales they will be the first region to come under the microscope. HMRC have set up a “task force” to concentrate on the property sector but say honest businessmen have nothing to fear.

Accountants can help

Many landlords of course utilise accountancy firms to make sure their businesses stay on the right side of the law and it is clearly a good strategy in an industry where monetary dealings can be complicated. Landlords deal with mortgages, rents, loans and property insurance fees on a daily basis and it is very easy to let things slide when another business based problem crops up. Health and Safety issues, non payment of rent, tenant checks, dealing with agents and the procedures surrounding tenant deposits are time consuming and can easily distract landlords from scrupulous bookkeeping. Landlord groups such as the National Association of Landlords and the Residential Landlords Association can put landlords in touch with accountants who have an understanding of the sector and in the long run can save investors, time money and worry.

Allied industries also targeted

The HMRC have confirmed the task force will concentrate on landlords with three properties or more and self employed construction workers in the same area, who often work with private landlords, will also find themselves under scrutiny. The tax men insist the buy-to-let sector is just one of many industries that will be investigated over the next 24 months in a bid to bring in extra revenue of up to £7 billion.

Tags: commercial property insurance, HMRC, Landlord Insurance, landlords, tax
Posted in Landlord Insurance, Landlord Insurance Quote, Landlords Insurance | No Comments »

Identify your costs

Thursday, June 2nd, 2011

Although the overwhelming body of opinion in the private letting sector suggests the opportunities for those thinking about entering the market have never been better, those who have been persuaded to dangle their feet in the choppy waters of the landlord business would be well advised to think about exactly what they aim to get out of the business before they even arrange business property insurance.

Opportunity knocks

It may seem straightforward at the moment. Young couples looking to buy a home of their own can’t afford a mortgage, homeowners looking to sell their property are having to bring their prices down because of the paucity of prospective buyers out there and tenants looking for a decent place to live are saturating the market. It would seem that all one needs is a hefty deposit, although even that requirement is dropping slightly on buy to let loans, and a clear idea of what you want to achieve.

Rental yield not easy to understand

There are plenty of places where you can get advice and good financial advice is paramount. Any financial advisor will tell a landlord new to the business to work out his rental yield before he buys a property, but that is somewhat easier said than done and is a calculation that is susceptible to dramatic change. It is basically the amount of money you make from your property divided by the cost/value of the property.

It is the value of a property that often makes the rental yield figures susceptible to change. A property bought for £100,000 in today’s stagnant market will probably shift very little over the next 12 months however, in a volatile market the value can change quickly and dramatically. Landlords who bought property at the turn of the century were looking at vastly changed yields when their properties doubled in value by 2007.

Factor in costs

The other side of the equation is easier to understand, easier to manage but absolutely imperative to get right. You must take into account any costs you are likely to incur and offset them against the amount of rent you expect to achieve. Taking costs as a percentage of the rental income you expect to bring in, then first and foremost comes your mortgage and that may well be anything upwards of 70%. No landlord should be without residential property insurance which usually costs around 3% of the rental value. Take out 10% for the upkeep of the flat i.e. replacing damaged fixtures and fittings and factor in 8% for the void periods that no landlord wants but must allow for.

Forewarned is forearmed

Once you start adding these things up it soon becomes apparent the importance of keeping your finger on the pulse of your business and how susceptible it is to fluctuations in the housing market that you have little power over. Starting off with this knowledge though will help any prospective landlord understand the subtleties of the business and not to expect easy pickings without putting in the hard work.

Tags: first time buyers, homeowners, Landlord Insurance, letting sector, Property insurance, Property market
Posted in Landlord Insurance, Landlords Insurance | No Comments »

Rental arrears still affecting majority of landlords

Tuesday, May 24th, 2011

It will come as no surprise to many residential landlords that a recent survey carried out by the National Landlords Association (NLA) found that over half of landlords who responded to the survey said they had experienced rent arrears problems in the last 12 months. Unfortunately it is a hazard of the business and just one reason why a commercial property insurance quote should always include a price for rental guarantee.

Average debt equivalent to one month’s rent

According to the NLA, the average debt that landlords incurred from late paying tenants was £730, which is roughly equal to the monthly rent landlords in the UK are generating at the present time. What the survey did highlight though was the fact that landlords themselves often have mortgages on their own homes to pay, and how seriously late rental payments can affect them. Of course landlords with several properties in their portfolio can soon find their business in trouble if more than one tenant starts defaulting on payments.

Business management more time consuming

The survey also revealed that the majority of landlords questioned thought the day to day running of a lettings business was becoming more difficult. This at a time when the sector is experiencing one of its biggest boom periods for many years. A comment perhaps on the ever expanding rules and regulations landlords have to meet to lawfully conduct their business. The recent changes in the way Houses of Multiple Occupation (HMO) are governed and the many local authority schemes which now require landlord registration have added to the paperwork already required for compliance with heating, electrical and health and safety issues.

Housing benefit changes won’t help landlords

The recent changes in Local Housing Allowance as well as other factors in the Welfare Reform bill, suggests it will be even more important for landlords to get good property insurance. The sector is expecting rental arrears to mushroom, certainly in the short term as tenants come to terms with a cut in income.

Support available for landlords who look

Organisations such as the NLA offer support and expert advice to landlords at all times, something that is absolutely essential when problems arise. Landlords new to the business will find that the NLA or organisations similar to them operate in most areas of the UK and membership will open their eyes to the many pitfalls that surround the business before they actually fall in them.

Tags: commercial property insurance, Houses of Multiple Occupation, landlords, local housing allowance, national landlords association, rent
Posted in Landlord Insurance, Landlords Insurance | 1 Comment »

Landlords faced with the possibility of fines

Thursday, May 12th, 2011

Property investors with an interest in landlord insurance will be more than a little worried by developments at one Ministry in Whitehall today. Energy and Climate Change Secretary Chris Huhne has decided to try and get his name in the headlines for more positive reasons and decided to make his target the landlords of the UK.

Minister looks to enhance his reputation

After weeks of negative press the energy minister has come out fighting and announced that landlords who fail to bring their properties up to energy efficiency set standards will face massive fines. He hopes the announcement will cement his place amongst the favourites in the “Green lobby” and will restore his reputation with his Liberal Democrat colleagues.

Thousands of properties affected

The measures he announced in parliament today could mean that as many as three quarters of a million homes in the private letting sector will have to be upgraded before 2018 and if landlords don’t comply then they will have to take their punishment. Exactly what the punishment will be has not been decided yet but Mr Huhne was talking tough. He had to be really, because a leaked memo suggesting his Cabinet colleagues would prefer to ignore his offices demands that the nation cuts greenhouse gases by 60% before 2030.

Big business expected to fund loan scheme

The “green deal” as Mr Huhne described the measures will be dependent on homeowners taking out cheap loans from sources yet to be identified, but thought to be big business corporations. The cash sum is thought to be a maximum of £10,000 a property and would be spent on insulation projects such as double glazing, loft and wall insulation.

Bill will not be plain sailing for landlords

Many environmentalist organisations welcomed the move saying rented homes should have to meet a decent level of insulation but the Association of Residential Letting Agents (ARLA) said there would be a danger that some landlords would be forced to cover their properties with empty property insurance if they could not afford to pay for the required improvements.

It is clear that despite the rhetoric of the minister today, many details of the bill have yet to be ironed out, and many interested parties placated.

Tags: energy, energy efficiency, environment, green, Landlord Insurance, Property insurance
Posted in Landlord Insurance, Landlord Insurance Quote, Landlords Insurance | No Comments »

Charities and landlords criticise benefit change

Tuesday, May 10th, 2011

The prospective dilemma facing investors holding residential property insurance and their young tenants in the coming 12 months just will not go away, and now an organisation created to look after the interests of landlords is letting their voice be heard.

Shared accommodation rate now applies to under 35’s

The National Landlords Association (NLA) has backed up concerns voiced by housing charities such as Crisis and Shelter who say the impending change in the shared accommodation rate of benefit could lead to thousands of young people being made homeless. The changes will come into force next January and specify that any single person claiming housing benefit under the age of 35 will only be paid the average rent charged for a room in a shared property. The drop in benefit rates could mean many landlords will find themselves letting out property to tenants who can no longer afford to pay the rent.

Survey reveals the problem

Although the changes don’t come about till January the change is already having an effect. Crisis and Shelter’s prediction that private landlords will refuse to take on single tenants under the age of 35 has been corroborated by a survey carried out by the NLA. The survey asked landlords who already let properties to tenants on housing benefit what their future plans would be in regard to whom they let their properties out to. Almost a third said they had already stopped offering new tenancies to people claiming Housing Allowance. Less than 1% said they intended to take on more and it’s fairly plain to see why.

Landlords can afford to look elsewhere

The risk for landlords who are always keen to avoid property insurance claims is just too much and the survey indicated they would advertise elsewhere to find new tenants. In the current situation they should not encounter too many problems. Tenant demand all over the UK is proving to be extremely strong in the current financial climate. The NLA also backed the housing charities on their assertion that there are definitely not enough shared properties in the country to house the number of people the change in benefit will affect. The Welfare Reform bill still seems to have some way to go before it satisfies its many critics, from both sides of the fence.

Tags: benefits, housing allowance, housing charities, Landlords Insurance, national landlords association
Posted in Housing Market, Landlord Insurance, Landlord Insurance Quote, Landlord Property Quotes, Landlords Insurance | No Comments »

Use technology to attract tenants

Tuesday, May 3rd, 2011

Many landlords now carry smart phones and are appreciative of how they can help in the day to day running of their business. But the real secret to staying ahead in the residential letting sector is to invest in smart homes.

Cater for tenant satisfaction

There is an ever growing emphasis for landlords at the top end of the sector to provide something more than just conventional living to tenants willing to take out long term letting agreements on their properties. Many are now getting property insurance quotes on homes that not only offer high speed internet and off road parking but also offer tenants the chance to cut down on the cost of living, lower energy consumption, and generally make life simple. Home automation allows control of a range of electrical items in the home and it is the way of the future. Everyone can minimise the impact they have on the environment by using home automation to get their house under control and lower energy bills, landlords offering such properties will stay ahead of the game.

Make the house a machine

All, or at least most, electrical items, lighting and security can be controlled through one interface and switched on and off remotely. This makes it easy to make sure everything is off when it should be and that lights, for instance, can be switched on ten minutes before arriving home in the summer or ten minutes after dusk in the winter. Basically it will give the impression that someone is home when they are actually out. If it looks as though someone is at home it will hopefully deter a break in and a claim on the home property insurance policy.

Heating any home is now becoming very costly, and heating an empty home for any great length of time is no longer viable. Most homes only take half an hour to an hour to warm up if the heating system is of modern design. A smart heating system can be activated when the tenant leaves work, which will ensure he walks into a welcoming atmosphere without encountering hostile fuel bills.

Compute optimised settings

The best advantage of an automated system is being able to manage how and when heating and lighting are used. The benefits gained through this ability to switch the electrical items or heating on when needed, as opposed to leaving them on, will be significant. Many new systems now give the dweller a chance to monitor his energy output room by room and hour by hour. Software can now be linked from the energy source to a computer that will give a rundown of usage anywhere in the home at any time, allowing the inhabitant to identify where savings can be made.

Tags: Landlord Property Quotes, Property insurance, residential landlords, Smart Homes, Technology
Posted in Landlord Insurance, Landlord Insurance Quote, Landlords Insurance | No Comments »

Perfect storm gathering for rental sector

Tuesday, April 26th, 2011

As the cap on Local Housing Allowance (LHA) starts to impact on tenants in cities across the UK, companies specialising in tenant evictions are warning that thousands of court actions against non payers of rent could put the legal system and landlords under terrific stress.

Trio of events

It is feared that the closure of almost 50 county courts in England and Wales coinciding with the caps in LHA and a possible rise in interest rates could have enormous consequences not only for tenants who can no longer afford to pay rent for their accommodation but also for their landlords.

Landlords faced with difficult decisions

Figures suggest that tenants in four bedroom houses claiming LHA will lose on average £74 a week with the cap, which could leave landlords in the unenviable position of choosing to evict the client or lower the rent if the tenant cannot afford to cover the shortfall. With only around a quarter of a million out of almost 5 million claimants actually employed, the likelihood is that most tenants will not be able to afford the increase.

Many landlords will be examining their residential property insurance policies to find out exactly where they stand if they do evict a tenant. One problem they will encounter is a delay in the eviction process when it goes to court. The closure of the courts means eviction proceedings are now taking weeks longer than before, which means that landlords will then come under pressure to find the cash to pay their loans on the property.

Westminster could be a hotspot

It is reckoned that 22,000 tenants in the Westminster district of London will be in such a situation, which means that an awful lot of landlords will also be wondering if they should take out empty property insurance cover on properties they always thought would be good wage earners. The problem will come to a head over this summer and with no political solution in sight landlords and tenants may both find themselves in trouble.

Direct payments to landlords would help both sides

It has been suggested by many in the industry for a long time that paying LHA directly to the landlord rather than the tenant would certainly cut back on eviction rates, this action would find agreement with many tenants but there seems little political will to bring about the change even though housing minister Grant Shapps has in the past indicated that he was sympathetic to the argument.

It could well be a summer of discontent for many people in the residential letting sector over the next few months.

Tags: Landlord Insurance, Property insurance
Posted in Best Practice Guides for Landlords, Landlord Insurance, Landlords Insurance | No Comments »

Glimmer of hope in loan figures

Thursday, April 21st, 2011

Figures just released by the Council of Mortgage Lenders (CML) suggest that residential landlords were particularly active in March searching out good deals on cheap property insurance.

City puts a dampener on the figures

According to the organisation, mortgage lending soared compared to the previous two months of 2011. The news radiated a warm glow on the cheeks of estate agents across the UK who have been dealing with a frozen house market for over 12 months now. Financial brokers in the City were still gloomy enough to say the figures would have little effect on house prices, but others in the industry will be cheered by any glimmer of good news.

Upward trend powered by landlords and remortgages

The CML report showed that the gross lending on mortgages in March reached £11.3 billion, a whole two billion more than February’s dismal figures and helped the first quarter figures to slightly improve on those of 2010, although March in 2010 was actually better than this year.

It is thought that a great deal of the extra activity on the mortgage front was down to homeowners taking the chance to remortgage before the much vaunted threat of a interest rates hike, and importantly for letting agents, buy to let investors looking for bargains which they could cover with property insurance and quickly move in to the buoyant rental market.

Lower forecast for April

Already industry experts are predicting April will bring everyone down to earth because the two Bank holidays will put a dampener on house sales, but figures do show that more properties are coming on the market and more landlords are showing an interest in expanding their portfolios. It now only needs the residential market to get a breakthrough and the doubting Thomases in the industry may be proved wrong.

Realism needed by those with “sticking” properties

With new homes coming on to the market, at least the vendors won’t be expecting prices that were achieved three years ago, which is without doubt a major factor in why so many houses are still sticking. The concept of “giving a house away” still lingers strongly with those who first marketed their homes before the recession. Unfortunately for these people the average house price has fallen something like £20,000 over this period, to those reading this in the paper, it is a statistic, to those trying to sell their house it is often viewed as daylight robbery. They cannot bring themselves to let their property go at the new market value and so bring a certain level of distortion to the figures released every month.

Tags: Landlord Insurance, loans, Property insurance
Posted in Best Practice Guides for Landlords, Landlord Insurance, Landlords Insurance | No Comments »

Accounting demands on social landlords may open the door for private investment

Tuesday, April 19th, 2011

With the advent of new international accounting standards being extended to cover Housing Associations (HA) in the UK, the demand on private landlords to go out and purchase residential property insurance on even more units may become even more pressing.

Major cost concerns in change over

Housing association chiefs are concerned that the decision by the UK Accounting Standards Board (ASB) to demand social landlords file their accounts in compliance with the new international accounting standards could cripple many associations. One major housing organisation, the National Housing Federation (NHF) believe that compliance with the international standards will cost the not for profit organisations millions of pounds just to alter their internal accounting and IT systems.

The NHF say that the bigger HAs of the 1200 that exist in the UK will incur costs of over half a million pounds just to comply, while smaller associations, those with less than 3,000 homes under their control will still be saddled with fees well in excess of £100,000.

Change in valuation system could block new builds

The new accounting standards will also see a difference in how the properties belonging to the HAs are valued and the NHF predict that as much as £1 billion could be wiped off the balance sheets of the HAs in total, and put future loans from mortgage providers in jeopardy. The ASB strongly refute the claims and say the new system will make it easier for both the HAs and their subsidiaries to produce their accounts in the future.

Time to consider options

The HAs are not required to make the change over in accounting systems until 2015 which gives landlords plenty of time to consider whether to add to their portfolios. It will also give them time to cost the project. A good understanding of how much a loan will cost, where to get cheap property insurance and how to source a builder for any renovations the project may require are all important factors to consider. The current market suggests that the time is ripe for landlords to invest in more properties, what appears bad news for social landlords may well turn out to be the icing on the cake for private ones.

Tags: Landlord Insurance, private investment, Property insurance, social landlords
Posted in Best Practice Guides for Landlords, Landlord Insurance, Landlords Insurance | No Comments »