Buy-to-let landlords warned to protect against tenant troubles
15 July 2010
With the housing market still in a state of flux and predictions that house prices may fall further, many homeowners who are looking to move may consider renting their property out instead of selling. However, moneysupermarket.com has warned homeowners who are considering this option to make sure they take out adequate landlords insurance as standard home insurance policies become invalid once you earn an income from your property.
With tenant demand for residential property continuing to rise, the proportion of landlords planning to buy new properties increasing and lenders slowly reintroducing good value buy-to-let mortgages, the number of people becoming landlords for the first time appears to be on the rise.
Whether you are moving into buy-to-let for investment, or have decided to go down this route to move home, getting the contract and paperwork right is essential and having adequate insurance in place is a must.
Last year, one in three landlords had tenants in arrears, so Brits shouldn't skimp on their insurance. However it doesn't have to break the bank, with standard landlord insurance available from as little as £93 a year from simple insurance, which covers loss of rent. For £134 a year, acumus will provide landlords with cover for legal expenses should they arise from incidents such as repossession, tenant default, and debt recovery.
Julie Owens, head of home insurance at moneysupermarket.com, said:
"Whether you're looking at buy-to-let property for investment, extra income, or because you cannot sell your house, it is essential to have sufficient insurance to cover any financial losses connected with letting out a property. I advise anyone contemplating becoming a landlord to seek advice and get all of the relevant information before taking this venture on."
"Landlord insurance which includes Rent Guarantee cover or legal expenses can be more expensive, however if things go wrong between a landlord and tenant legal proceedings can involve a hefty cost. It is important to have a good contract in place to know where each party stands should the tenant and landlord relationship fall sour.
"I advise insuring yourself against these circumstances before they arise, it is always better to be prepared and there are a number of suitable insurance policies for landlords on the market. The varying levels of cover available means it's essential to do your research and pick the policy that is the best fit for your circumstances, policy wording can differ so it is vital to check the small print to determine exactly what is covered."
NACFB members will have access to improved products from Santander Business Banking the National Association of Commercial Finance Brokers has announced.
Figures published today by the Insolvency Service show the number of personal insolvencies in England and Wales reaching 34,743 in the second quarter of 2010.
Specialist general insurance provider, Assurant Intermediary, urges intermediaries not to ignore the residential rental market as a potential source of business.
Enterprise Finance, the national secured loan and bridging finance master broker has announced the appointment of a new business development manager for the Northern region.
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