Simple Landlords Insurance News

Tenancy Deposit Scheme celebrates five years

2012-05-22T12:48:00

The Tenancy Deposit Scheme is celebrating five years of being a legal requirement that protects deposits of tenants in the private rental market. The organisation has claimed that "the 'cultural' antagonism between landlords and tenants may be reducing" as a result, as the provision has helped settle many disputes over the years.

Now it has been forecast that the number of authorised deposit protection schemes may rise during 2012 and once again in 2016, while the use of the Alternative Dispute Resolution service will also be widened.

Steve Harriott, chief executive of the Tenancy Deposit Scheme, spoke at the Property Business Show at Excel about the scheme on April 19th. He said that he believed that deposit protection has "effectively banished" the once-common belief that serious antagonism existed between landlord insurance customers and their tenants over deposits.

He continued: "No longer is it automatically believed that private sector landlords will regard the deposits they hold as part of the rent, nor that tenants will withhold the last rent payments for fear of not getting their deposits back. And, both landlords and agents have become much better at managing disputes at the end of a tenancy."

Mr Harriott also noted that the level of disputes had lingered around the one per cent mark over the last five years.

North of England 'provides better rental yields'

2012-05-17T12:39:00

People planning to invest in property for the purposes of renting have been told that the north of England may just be the best place to focus their attention on. This is because landlords in the area are making better returns than those with their portfolio in the capital, according to new research.

Figures from Paragon suggest that landlords in the north-west are making a 6.6 per cent annual return on their properties, while those in the north-east are getting 6.5 per cent. This is compared with 5.9 per cent in central London and 5.7 per cent in the surrounding suburbs.

However, the trend does not carry further north for landlord insurance customers. Indeed, landlords in Scotland get the least money back from their investments, attracting yields of just 5.5 per cent.

John Heron, director of Paragon Mortgages, said of the study: "The rental yield figure is important for landlords as it gives a good indication of how well a property, and in a wider sense, a portfolio is performing.

"We have seen another interesting shift in the regions taking the top spots, with a more distinct north/south divide in Q1 with the north outperforming their southern counterparts."

Experian: Property rental is flourishing

2012-05-16T12:31:00

Residential rental properties across the UK are doing very well, according to the latest research from a leading financial services provider. Experian reported that an additional 58,000 properties are now being marketed as rental options in 2011 when compared to the previous year.

On the other hand, the organisation also discovered that the number of properties for straight sale had dropped by around 12,000, highlighting how more people are considering tenancy agreements and landlord insurance.

Agreeing with trends discovered by a number of other companies, Experian found that London still dominated the rental market, as one in every five properties rented to the public were based in the capital.

Meanwhile, the West Midlands and Wales experienced the biggest increase in available rental houses, as both regions registered a 20 per cent rise in this figure in 2011 when compared to 2010.

Jonathan Westley, managing director of consumer information services at Experian, said: "This insight shows that home owners may be using renting as a back-up plan if they are unable to sell or alternatively some may still consider property a long term investment.

"Moving house can be a catalyst for a consumer to switch to ensure they are getting the best deal from their suppliers. Knowing who these movers are enables organisations to keep in touch with them and maintain and develop relationships at a time when they are most receptive."

Landlords 'evicting tenants to make money of Olympics'

2012-05-15T12:26:00

The UK's leading charity for the homeless has condemned many property owners in London, claiming that they are using underhand tactics to get the most out of their flats and houses during the summer in response to demand for accommodation during the Olympics, according to a leading newspaper.

In an interview with the Daily Telegraph, Campbell Robb, the chief executive of Shelter, claimed that Londoners in Olympic boroughs are suffering at the hands of those operating with landlord insurance because of increasingly unaffordable rents and - in particular - a minority of "rogue landlords" who exploit the demand for homes.

The Telegraph noted that figures show how the cost of short-term lets in London boroughs near to Olympic events have jumped by a whopping third since January. The average weekly rent in affected boroughs - notably Greenwich, Hackney, Barking and Dagenham, Tower Hamlets, Newham and Waltham Forest among others – has risen by an average of £17 a week.

Mr Robb continued: "Increasingly we are seeing signs that the Olympics are exacerbating these problems, with some landlords looking to evict tenants and re-let their homes to Olympic visitors.

"Unless the Mayor starts to prioritise housing and invest in the decent, secure and affordable homes that Londoners desperately need, these problems are going to exist long after the Games are over."

Rising possession cases flagged; landlords warned

2012-05-14T12:23:00

Landlords and agents alike have been urged to ensure they are protected against a rising number of possession cases. A recent government quarterly court statistic was picked up by LetRisks and relayed to members of the Association of Residential Letting Agents (ARLA) in March 2012, where it was claimed that there was a further increase of five per cent in the number of possession cases in England and Wales.

This took the number of houses in this quandary to 142,088, making it the highest figure since the height of the recession in 2008. The number of landlords that prefer to obtain possession without money orders has also risen by over 30 per cent.

In one-quarter of courts in England and Wales, claims brought forward by landlord insurance customers that resulted in orders made for possession increased by over 20 per cent on the previous year. There have been particularly "substantial" increases in certain areas too, notably in the south-east and east. Chelmsford (65 per cent) topped the table, with Luton also causing worry among landlords (56 per cent).

Managing director of LetRisks Michael Portman said: "In a recent survey we conducted amongst private landlords, we found that non-payment, late, or partial payment of rent is the biggest worry for them. With the continuing rise in possession cases, it is vital that landlords and agents deal with potential problems with tenants early, to prevent court action later on."

Londoners 'spending double UK average' on rent

2012-05-11T12:21:00

While it may not be a surprise to people living in or out of the capital, it has been revealed that Londoners are spending an average of 71 per cent of their take-home pay on rent alone, which puts the city at nearly double the UK average.

According to statistics compiled by property website FindaProperty.com, the average UK household has a typical net income of £27,242 a year; those living in rented accommodation will invest around 38 per cent of this (£10,416) into rent. This rises by a rather grandiose amount for those living in the capital, where rental property costs jump to 71 per cent (£25,824) of the average London net annual income of £36,384.

This means that the average rental household in London spends 95 per cent of the average UK household's take-home pay on rent - something that does not surprise the company or its property analyst Samantha Baden. She said that average rental prices hit an all-time high in September 2011 but have since come down, attributing the phenomenon to the increasing number of properties now on the market.

She continued: "[S]maller homes remain in limited supply and as a result, individuals and couples are still facing record asking prices for smaller flats and therefore spending a significant proportion of their overall household income on this. This is particularly pertinent in areas like London where demand is high, which is why tenants looking for more affordable rental property should consider the impact of location as well as size."

People 'want to deal directly with prospective landlords'

2012-05-09T12:19:00

If you're a landlord and you want more success when getting someone in your property, it's worth making sure that you're the one taking them on the tour of the home in question - and not an agent.

That's according to the latest survey carried out by self-service UK lettings agency Upad; it talked to nearly 400 tenants across the UK and found that just 15 per cent of them would rather meet an agent than speak directly with the landlord, while over half preferred to meet the latter; one-third were not bothered either way.

Chief executive officer of Upad James Davis said: "From our research, it appears that obtaining direct answers is of the utmost importance to potential tenants, so it makes perfect sense for landlords to self-manage and hold viewings themselves."

In the survey, one tenant claimed that given they are surveying the landlord's property, they are much more likely to know the finer details of the home in question than the person put there to sell it to prospective clients.

According to Property Live, the unnamed respondent continued: "I don't believe agents are always truthful and because agents only care about the money I believe landlords are better - they actually care about keeping good tenants."

Landlords 'still buying more houses'

2012-05-07T12:18:00

More buy-to-let homes are being snapped up by landlords and there's no sign that this trend will slow, according to new research released by a popular mortgage lender.

Paragon Mortgages revealed that property investors continued to sink cash into buy-to-let properties over the first quarter of 2012, expanding their portfolios by an average of 1.8 homes. It now means that the average property portfolio stands at 10.8 homes, as well as 1.3 tenants per property.

Among landlord insurance customers, the preferred property to buy is a terraced house; this is the favoured option for 64 per cent of landlords. Flats came in second place with 57 per cent, while semi-detached homes came third with 46 per cent.

Meanwhile, confidence among landlords remains high; Paragon confirmed that no less than 89 per cent of respondents were satisfied with tenancies as they are at the moment. Communication continues to stay positive, too; nearly 40 per cent currently speak to tenants every two to three months.

Director of Paragon Mortgages John Heron said: "It has been a steady and progressive start to 2012. Whilst landlords are still benefitting from attractive market conditions, there is still a long way to go to meet the increasingly high level of tenant demand. More investment across the private rented sector is needed during the coming year to help to meet this demand."

Criminal landlords targeted by 'beds in sheds' taskforce

2012-05-05T12:17:00

So-called landlords that operate "beds in sheds" operations are to be investigated by the police and UK Border Agency in order to ensure that their dealings - often with illegal immigrants - are addressed.

While the vast majority of landlord insurance customers operate completely above board, a tiny minority of unscrupulous property owners are "renting out" thousands of sheds and outbuildings to migrants, including a large number that have no right to be in the UK.

While the illegality of their life in the UK is one thing, the human rights-abusing conditions they live in are another; ruthless landlords continue to exploit illegal immigrants for cash by demanding massive rent costs to live in cramped conditions, according to the government.

Examples of such accommodation had in the past included converted sheds and garages, creating "modern shanty towns" that are "hidden away and are often only visible on websites such as Google Earth". With poor wiring and bad sanitation, these areas are also often home to rats and cockroaches.

Housing minister Grant Shapps said of the initiative: "It is a scandal that these back garden slums exist to exploit people, many of whom are prepared to return voluntarily to their home country but instead find themselves trapped into paying extortionate rents to live in these cramped conditions."

Accidental landlords are they avoiding home sales?

2012-05-04T12:15:00

The Residential Landlords Association (RLA) has taken time to focus on the issue of accidental landlords, claiming that the increase in the number of these newcomers to rental agreements is too large to ignore.

Citing property valuation agency Hometrack and its latest index, the RLA pointed out that homes are now taking more than 15 weeks to sell - this is a huge increase on the same time last year, when the average stood at just nine weeks. Hometrack also discovered that sellers are also only getting 93 per cent of their original asking price.

"Therefore with the market seemingly stalled in many areas, it is not surprising that many people who need to move are now considering renting out their homes rather than slashing their asking price," the RLA continued. "The stagnant housing market has meant that frustrated vendors have been essentially forced in to renting out their homes, while trying to buy elsewhere."

The organisation warned potential landlords that drawbacks still lie in the renting out of property by newcomers to landlord insurance, noting that selling is still the best strategy for some people. The RLA highlighted how lettings is an unregulated industry, so expert advice must be sought before setting down an inaugural tenancy agreement.

Benefit changes making letting 'unaffordable' - NLA

2012-05-02T12:13:00

The National Landlords Association (NLA) has discovered that over half of the landlords on its books are unable to afford to rent their properties to housing benefit tenants due to widespread cuts that have now been made to the allowance.

In its most recent publication, it was found that 53 per cent of landlords see the changes to the local housing allowance (LHA) as particularly untenable. Meanwhile, nearly half of landlord insurance customers with a property portfolio (46.9 per cent) think that tenants under the age of 35 will be hurt the most by these alterations.

Shared accommodation is now being heavily focused on by people seeking supported living, and this is in part due to the fact that tenants on benefits can now only qualify for a single home from the age of 35, raised from the original boundary of 25.

Chairman of the NLA David Salusbury said he was concerned that so many landlords were looking to withdraw from the LHA market in the space of just three years, as they cannot afford to let properties to tenants at a reduced rate.

He continued: "It is vital that local authorities work with landlords to provide the support services needed to help this demographic, as many are forced to move into shared accommodation."

Landlords get extended powers with deposits

2012-04-13T04:40:00

Landlords have been reminded that tenancy deposits need to have been registered with an approved government scheme by Friday April 6th, when the Localism Act comes into force. The National Landlords Association asserted that under new guidelines, those operating properties for rental now get 30 days to protect a deposit after receiving it from a tenant, up from the previous limit of 14 days.

The National Landlords Association (NLA) explained that landlords need to give a tenant the required prescribed information and deposit protection certificate to prove that their bond is protected for the full 30-day period.

Legislation was amended in order to close a legal loophole in the Localism Act, which led to many landlord insurance holders successfully appealing against penalties for not protecting a deposit. If landlords now fail to protect a deposit, they will be prosecuted and fined a multiple of the deposit. Their right to apply for a possession order with a Section 21 notice will also be revoked until they resolve the deposit issue.

Chairman of the NLA David Salusbury said: "These changes are helpful to landlords who now have extra time to ensure any deposit they take is properly protected. But they must make sure they do so within the 30-day time limit as changes to the law now make penalties strictly enforceable."

Housing affordability 'at best level' for landlords

2012-04-13T04:38:00

Property in cities across the UK is currently more affordable than it has been at any time over the last ten years, according to new research. The Affordable Cities Review, commissioned by Lloyds TSB, discovered that the average price for a city home is now 5.5 times gross annual average earnings.

While this figure still seems high, it is the lowest ratio it has been since 2003. One year ago, it was 5.7 times gross annual average earnings, and a long way from a peak of 7.2 before the recession in 2008.

Over the last four years, the average city house price has dropped by 18 per cent, from £210,605 to the current total £173,202 in 2012. However, there still seems to be a large north-south divide - perhaps presenting a great opportunity for landlord insurance customers to buy stock in the upper half of the country.

This was reflected by the report's discovery that all 16 of the most affordable cities were in the north, and the fifteen least affordable cities were in the south. Salford was the cheapest city for property with an average property price of £102,391, while Truro was at the other end of the spectrum at £250,489.

Suren Thiru, housing economist at Lloyds TSB, said: "Looking forward, the marked improvement in city affordability is likely to help support demand for those able to enter the housing market. Much of this benefit, however, maybe offset by the continuing difficulties many households face in raising a deposit and uncertainty over the outlook for the UK economy."

Gas safety underlined during HSE investigation

2012-04-10T04:30:00

The Health and Safety Executive (HSE) has reminded landlords that they will face major fines and even jail if they do not constantly check their appliances. It made its call following the decision to give a Basildon property owner community service after she failed to keep gas appliances well maintained and safe.

Onyemauche Peel, a 49-year-old from Thamesmead in London, had not been running Landlords' Gas Safety Checks in at least four properties between 2003 and 2010, invalidating her landlord insurance and overlooking the security of tenants. Two boilers even had to be turned off completely because they were seen as so dangerous.

HSE inspector Sue Matthews said that there was simply no excuse for not maintaining gas appliances, noting that nearly a dozen small children were at risk for years due to Mrs Peel's lack of diligence.

She continued: "It is illegal for landlords and unregistered engineers to carry out gas work. Working with gas appliances is difficult, specialised and potentially very dangerous. Only qualified and registered engineers should attempt it.

"HSE will not hesitate to prosecute landlords who use unregistered gas engineers. Landlords can easily check whether gas engineers are registered by telephoning Gas Safe or checking on the Gas Safe website."

Renters not getting much-hyped rent prices for Olympics

2012-04-09T04:24:00

While the Olympic Games in London have seemingly promised a fantastic amount of money to those looking to rent out their homes during the summer when travellers are desperate for accommodation, it seems like many people are not benefiting from this possibility.

According to a new report in the Guardian this month (April 1st), many homeowners are coming to terms with the fact that the perceived "sublet bonanza" promised to landlord insurance customers may not be as lucrative as once thought.

Camilla Shaughnessy, owner of EventfulStays.com, is used to organising rentals for sporting and cultural events up and down the UK, though doesn't see the Olympics as anything too grand. She said: "There has been so much hype about Olympic rentals.

"Yes, they are happening, but it's not the big boom-time that everyone thinks. As it gets closer, yes it will get busier. But some people are being incredibly greedy when they are looking to rent their properties, and visitors are canny."

Nonetheless, the Guardian went on to identify a number of websites looking to get involved in Olympics rentals taking the most obvious and direct route to advertise their wares. These included rentduringthegames.com, rentals4olympics.com, accommodationforthegames.com and even London-property-rental-2012.com.

Private landlords 'at risk' over lack of detailed inventories

2012-04-07T04:17:00

A huge number of private property landlords and agents across the UK are using the wrong kind of evidence to back up their inventory checks, according to a leading organisation.

The Association of Independent Inventory Clerks (AIIC) explained that digital evidence is increasingly replacing necessary written descriptions, leaving people to get into potentially costly disputes over wear and tear and causing complications with landlord insurance policies.

In the AIIC's report, it was explained that photographs and videos can provide good illustrations, yet are not helpful without an accompanying detailed inventory. It explained that a full description of a property and its contents needs to be made, providing further details on every bit of damage and its exact location.

Pat Barber, chair of the AIIC, said: "We want landlords and agents to be better informed in the event of a dispute - that means providing quality evidence to substantiate their claims for withholding the deposit.

"The law clearly states that the deposit remains the tenant’s money and that they are entitled to get it back at the end of their stay, provided they have met the terms of the tenancy agreement, so the onus lies with the agent or landlord to provide proof."

Multiple occupation homes in Oxford 'falling short of required standards'

2012-04-05T12:10:00

The lack of adherence to laws governing houses in multiple occupation (HMOs) in Oxford is being flagged up by the local authority, which has highlighted how owners of such properties could be invalidating their landlord insurance through their actions.

Back in January 2010, laws were brought in that required landlords that owned HMOs to have their properties inspected and licensed. During the first year of the requirement being in place, Oxford City Council issued 338 licences to such owners - just 11 of these (three per cent) were issued without any additional conditions.

In January 2011, landlords owning two or three-storey houses for five people or more were told that they needed to get their property inspected properly at a cost of £362, and most were told to make alterations to qualify for the licence.

Joe McManners, city board member for housing, explained that it emphasised the need for greater standards, adding that the new law was important for the quality of life of tenants in Oxford. He said: "I think this shows why there is a problem and why it is excellent that we are able to get these houses brought up to a decent standard.

"The fact that there is a lot of work which is being done shows a lot of these homes are not in a fit state."

Landlords given safety tips for their properties

2012-04-02T12:09:00

Three important tips have been dished out to landlords looking to protect their investment and avoid the possibility of claiming extensively on a policy of landlord insurance. Dyno, a safety specialist, said that the trio of issues needs to be focused on for the good of both the house and those dwelling within.

Firstly, it was asserted that all gas appliances need to be tested for compliance. The Gas Safety Regulations 1998 law means that landlords must provide gas appliances that are safe. All equipment must be checked by a Gas Safe registered engineer and attain an annual CP12 certificate. "Failure to comply can lead to a costly fine and it could mean that your property is left being empty for a prolonged period of time, rather than occupied by paying tenants," Dyno explained.

Secondly, smoke alarms need to be fitted. The company underlined how these are "vitally important" in keeping your tenants safe and secure, so must be installed on every floor. They must also be tested regularly, but may not cost you anything - fire services have been known to audit properties and fit the alarm on your behalf.

Finally, protection against thieves is paramount to preserving a no claims bonus on landlord insurance. Locks ought to be fitted on every door, with door chains for extra security. Padlocks are also recommended by Dyno for sheds, garages and gates. Double glazing and burglar alarms will also bolster safety.

B2B conference for landlords announced

2012-04-01T12:09:00

If you're looking to secure a bigger and better future for yourself in the property market while extending your landlord insurance coverage, a new event could provide you with all of the support you need.

It was recently announced that both potential and current property owners are being invited to the Property Investor Show, a leading business-to-business (B2B) conference that is prioritising networking, a number of seminars, as well as auctions.

Taking place at the prestigious ExCel event centre at the heart of London's Docklands area between April 19th and 20th, initial admission is free but there may be charges for some seminars. Attending the event will be more than 100 exhibitors and it aims to cater for everyone from amateur novices to the most experienced professionals.

The fathering has been going since 2002 and the show has since become the largest single gathering of landlords in the UK at a property event. According to past statistics, most visitors are already landlords and this demographic owns an average of four or more investment properties; one third actually own ten or more, so those wanting to become large-scale renters will have plenty of people to talk to.

Average monthly rent rises by nearly 5% - BM

2012-03-29T04:01:00

There has been a 4.8 per cent growth in the average monthly rent, according to the latest research, which also went on to discover that buy-to-let investors have gained a rental yield of 6.1 per cent during 2011.

This has been found by new figures presented by BM Solutions, which claimed that there has been strong demand for rental properties, taking the average monthly rent to £716 in 2011 from a lower yield of £682 in 2010.

The highest rental yields in 2011 were in the north, where seven per cent was registered. In the north-west and Yorkshire and the Humber, it was 6.3 per cent, while it was six per cent in Wales and 5.9 per cent in both the east and West Midlands. All regions registered yields below the UK average.

Phil Rickards, a representative of BM Solutions, said that there is a particularly healthy demand for rental properties around the UK right now, which is partly related to the costs associated with buying your typical house - these will only increase as stamp duty holiday ends.

He continued: "Average gross yields on a buy-to-let property have been just over six per cent for the past two years, driven by growth in rental values. However, with house prices likely to remain broadly flat again this year, buy-to-let landlords can again expect little capital gain on their investment in 2012."