If you own buy to let property, you probably know that your landlord insurance is quite different to the regular home building and contents insurance typically arranged by an owner-occupier.

What distinguishes your landlord insurance from other home insurance policies is the recognition that you are running a business – your landlord or buy to let insurance not only safeguards the physical assets of the building and its contents but also the viability of the business itself.

Business revenue

As a landlord, your business revenue comes from the rents you collect from your tenants. Your let property may be the principal business asset but the rents you collect represent the essential income stream on which your enterprise relies.

If that central business asset is seriously damaged – or even destroyed – in an event covered by the building insurance that is central to your landlord insurance policy, the premises may become temporarily uninhabitable and unlettable pending repairs and reinstatement. In that case, of course, you will also suffer the loss of the rental income your buy to let business would otherwise have received.

That is why your landlord insurance typically provides compensation for such loss of rental income – enabling you to arrange suitable, alternative accommodation for your tenants.

The principles of compensation for loss of rental income and cover for the cost of alternative accommodation

In principle, your landlord insurance is designed to cover the cost of arranging alternative accommodation for your tenant or for ensuring that you are compensated for any loss of rental income.

But there are also some important points and provisos to understand.

If your property is severely damaged by incidents covered in your landlord’s insurance policy, you may find that you have three immediate problems arising as a result:

• you may need to put your tenants into emergency accommodation while you deal with the consequences of the problem – namely the damage to your let property;
• as a result, you might also find yourself seriously out of pocket due to a loss of rental income; and
• you will be faced with the costs associated with putting the problem right.

Subject to the specific conditions of your landlord insurance policy, help and support may be available in all three areas.

Of course, the concept of reasonableness will exist.

The limits of compensation

Any alternative accommodation you arrange for your tenants, of course, needs to be in keeping with and offer a similar standard of accommodation to the let property they were occupying before the incident occurred.

Any request to your insurer for compensation for loss of rental income or cover for the cost of alternative accommodation is likely to be rejected if you seek an unreasonably expensive solution. Instead, you may need to show exactly how much you were receiving in rental income and the amount of compensation is likely to be limited to a maximum – typically based on a percentage of the total sum insured under your landlord insurance policy – and for a defined period of time.

The reality of life, of course, is that each situation is unique and presents its own – perhaps never to be repeated – circumstances.

Your insurance provider will typically work with you quickly and efficiently to try and reach a solution as fast as possible to both protect the integrity of the accommodation of your tenants and your financial interests as the policyholder.

In any situation where such claims were likely to be forthcoming, it is always a good idea to speak to your insurance provider in advance and work in partnership with them to find a solution. This is preferable to simply telling them of decisions and actions after they have already taken place.

Rented accommodation comes in all shapes and sizes – and the differences between one type of rental and another may be critical both to the tenant and the landlord.

At first sight, for example, a bedsit and rented accommodation in a House in Multiple Occupation (HMO) might seem remarkably similar to the tenant concerned. But there are critical differences – not least for the landlord for whom the legal obligations will differ as well as the appropriate type of insurance for each type of dwelling.

What is the difference between an HMO and a bedsit?

Distinguishing between a bedsit and accommodation in an HMO may be confusing because it can be argued that an HMO comprises a collection of individual bedsits. The principal difference is the term HMO refers to the whole building while a bedsit describes the individual units of accommodation with it.

For the landlord, that is a critical difference, because the let accommodation is either an HMO or it is a bedsit – it typically cannot be both.

Bedsits

• a bedsit is typically defined as a single unit of accommodation – with its own, lockable entrance – most likely to offer shared amenities such as a bathroom and kitchen;

• unlike rooms in an HMO, however, some bedsits might also offer basic cooking facilities and even an ensuite toilet and bathroom;

HMOs

When it comes to the HMO definitions – and regulations – are altogether stricter and more rigorous:

• the formal definition is unequivocal – an HMO involves shared facilities (kitchen, toilet, and bathroom) with other tenants and is occupied by at least three people who comprise more than one household;

• that reference to more than one household makes for a critical difference – setting the HMO totally apart from any bedsit;

• the distinction between different households and the fact that each one shares essential facilities lends the HMO a very particular style of living – and one that is often commonly referred to as a “house share”;

• local authorities recognise the very particular living conditions represented by HMOs – and operate a licensing regime in an effort to maintain standards and to ensure that landlords are “fit and proper” persons for the job;

• licences are required by all “large” HMOs – occupied by five or more people, comprising more than one household – but many local authorities have also extended this requirement to smaller HMOs.

Insurance matters

The very different conditions and legal requirements with which landlords need to comply are, of course, recognised by the providers of landlord insurance – and it is vital that you arrange the insurance cover that is appropriate to the type of let accommodation you own.

In your proposal for insurance with us here at Cover4LetProperty, for example, we specifically ask whether your landlord insurance is designed to cover a bedsit or bedsits or whether it is for a property with multiple tenants who are not a family but comprise separate households (in other words, an HMO).

Summary

It is all very well insisting that you arrange the appropriate type of landlord insurance for the specific type of property you own – whether bedsits or an HMO – but it can be confusing to distinguish the two.

If you are in any doubt or have further questions about the landlord insurance you need, therefore, do not hesitate to give us a call on 01702 606301 or email us at cover4letproperty@alanblunden.co.uk. We will be delighted to help!

Recent property news headlines have raised doubts about the effects on the private rented sector of stricter energy efficiency ratings while other sections of the press instead suggest ways in which your holiday home can be made more sustainable.

Here we look at some of the recent UK property news headlines …

Landlords may sell over strict EPC targets

The government’s drive to increase the energy efficiency standards in all housing in England and Wales might have the effect of forcing buy to let landlords to sell up and quit the market altogether, according to research in Landlord Today earlier this month.

Legislation currently in place requires any let property to achieve a minimum rating of E for its Energy Performance Certificate (EPC). There are official plans to increase this requirement to a minimum C rating for all new tenancies with effect from 2025 and for all tenancies by 2028.

More than half of the landlords surveyed who owned properties rated D or below are considering selling up (either some or all their properties), says the study. This is because they don’t think they’ll be able to either complete or finance work to reach the required standard.

Making your holiday home more sustainable

Meanwhile – in a different sector of the UK property market – owners of holiday homes and lets are advised in an article in Property Wire on the 25^th of November about ways of making their properties more sustainable:

• to show that you are truly serious about making an eco-friendly difference, you might consider switching to alternative energy sources such as wind, solar, or hydro power – this could reduce the carbon footprint of your holiday home by up to 80%;

• but you do not need to make such radical changes to make a difference – simply replacing your lightbulbs with LEDs will also result in 80% greater energy efficiency and the bulbs themselves are likely to last some 25 times longer;

• sustainability is also about saving water and reducing your consumption of this valuable resource – savings that can be made by installing restricted-flow taps, water-efficient showerheads, and dual-flush toilets (which typically use just 4 litres of water compared to the 13 litres of a standard cistern);

• when you are staying in your holiday home or you have let it to paying guests, encourage people to engage in eco-friendly activities in and about the property rather than relying always on outings in the car; and

• attention to small details, such as a ban on single-use plastics and reliance, instead, on refillable containers and dispensers will contribute to your efforts towards sustainable living.

One in 16 homes to have changed owner in 2021

A story in the Express newspaper on the 29^th of November shone a light on what has been a record year for residential property transactions – the busiest in 14 years.

Citing data compiled by online listings website Zoopla, the article revealed that one in every 16 of the homes in the UK changed hands during the past 12 months.

As the volume of transactions reached its largest in almost 15 years, average house prices also raced to keep pace – with the average surpassing £240,000.

Although demand continues to outstrip supply, there is evidence that prices are now rising less steeply and that the surge in property transactions may be more subdued.

Rent increases hit 13-year high as demand in major cities doubles

With the gradual lifting of Covid pandemic restrictions and a return to office working for many people, a resurgence in demand for inner-city rental accommodation has prompted rent rises currently striking a 13-year high, according to online listings website Zoopla on the 16^th of November.

The imbalance between rising demand and faltering supply is affecting the private rented sector in much the same way as homeownership. Demand for rental accommodation is currently 43% above average, says the article, while supply is 43% below average.

The imbalance has fuelled an increase in rents outside London so that the average currently stands at £809 a month, which is 6% higher than at the same time last year.

There is no limit to the number of claims you can make on your landlord’s insurance policy. Even so, there are several provisos that you will certainly need to consider.

Principles

In an article dated the 26^th of January 2021, the Financial Ombudsman Service explains that most home buildings and contents insurance policies are “policies of indemnity”. This is a specialist term meaning that the policy is designed to put you back into the same position as you were before the loss or damage covered by the insurance occurred.

By way of example, if the building is totally destroyed, your building insurance is designed to cover the cost of clearing the ground, legal fees and reconstruction – so, giving you a home of similar size and standards to the one that was lost. If a household item or personal belonging is lost or stolen, your contents insurance is designed to replace it – so you are in more or less the same position as before the loss.

These principles help to explain why there is no limit to the number of claims you can make – but that bold statement is subject to several limitations.

Policy limits

Although there is no formal limit on the number of claims you may make, you must be aware of the policy limits regarding the maximum amount payable under any single claim.

With respect to your property insurance, for example, there will be a maximum building sum insured (the maximum amount the insurer is obliged to pay in the settlement of any claim for loss or damage to the structure and fabric of your home).  And a maximum contents sum insured (the maximum payable in settlement of a claim for theft, loss, or damage, to the contents of your home).

In addition, there might be sub-limits on particular types of claim – these are detailed within your policy document.

Policy excesses

Your policy documents also identify the excesses that will attach to particular types of claim – excesses that are the first part of any successful claim and for which you remain financially responsible.

Once again, there may be sub-divisions for the amount of excess payable – for example, £100 for each item of contents for which you might claim, but £1,000 for a subsidence claim.

Every time you make a successful claim, you will be liable for the excess amount. As it is the first part of the claim, this is the amount that you agree to contribute and would have been agreed at the time that you took your cover out.

For example, if you make a claim on your policy for £1,000 worth of damage and your policy excess is £500, then in the event that your claim is valid, you will receive £500 (as you have agreed to pay the first £500 towards the claim).

Time limits

In addition to checking that your policy covers you for the losses or damage for which you are claiming, Citizens Advice also warns that most policies also have a time limit within which you must make your claim for any loss or damage.

Time limits are discussed in more detail in an article by lawyers CMS on “Insurance Law and Regulation in England and Wales”.

Loss of no claims discounts

Recognise that any claims you make on your insurance policy are almost certain to affect any no claims bonus you might have built up – the discounts you were awarded for those years during which you made no claims.

Beware, too, that – quite apart from any no claims discount – your claims history can also affect the premiums you are charged, warns credit reference agency Experian. When calculating their premium rates, says Experian, insurers typically look at the claims history of your home over the past five years or so. If you have made several claims – especially large ones – you can expect your premiums to be increased, as it becomes classified as “high risk”.

Action

At Cover4LetProperty we do understand that sometimes having to make an insurance claim is unavoidable – that is why insurance exists, after all.

To keep your premiums manageable, however, you may wish to avoid making “smaller” claims. In the example we gave earlier, for instance, a successful claim for £600, after the deduction of a £500 excess, would leave you with just £100. In cases like this, you may wish to cover the additional cost yourself in order to keep your insurance premiums for the forthcoming year at a more attractive rate.

You’ll be pleased to learn that the answer is a resounding “yes” – we offer discounts if you have multiple properties insured with us. Thanks to what is called multiple property insurance cover or property portfolio insurance, the more properties you own, the cheaper your landlord insurance becomes.

Discounts and advantages

We understand that anything that helps reduce the operating expenses of your buy to let business is going to be welcome – especially these days when it might be more of a challenge to maintain a financially healthy bottom line.

But it’s not only the discount on the price of your premiums that is likely to make your life as a landlord that much easier. it’s also important to take into account the administrative overhead reductions that you might achieve through having a single policy as opposed to one for each property you own.

If you have a single portfolio insurance policy for all the let property you own, your one policy comes with just a single renewal date, one renewal premium and only one relationship with an insurance provider to manage. Also, along with one policy date etc., if everything is under one policy, there is only one administration fee (thereby saving you money).

This can be a huge time saving over situations where you are trying to do exactly the opposite and are, for example, trying to control multiple policies through multiple providers.

No longer will you be juggling disparate policies, each with a separate renewal date, that you have to monitor and manage carefully so that none of your let properties is exposed to the risks of lapsed insurance cover.

You can rest assured that every property remains safely protected – so that you are free to get on with the real business of running a profitable buy to let business.

The versatility of multiple property or property portfolio insurance

Whatever properties make up your portfolio, we are almost certain to have a policy tailor-made to suit your needs and requirements. Cover is available for a wide range of different property types, in various locations and for different types of tenant.

By way of illustration, for example, we are happy to cover all types of tenants – even though there are still some insurers issuing policies that exclude certain classes of tenant, such as those on housing or other welfare benefits, students, the unemployed, asylum seekers, and the like.

By its very nature, portfolio insurance always requires a more bespoke approach. We have no way of knowing, for instance, how many properties might be in your portfolio, the types and values of those properties, or their location in any particular part of the country.

So, rather than speculate further here, we invite you to contact us for a discussion of your requirements as soon as possible. You’ll see that we can typically put some (what we believe are) cost-effective and appropriate multiple property propositions on the table for you in a very short space of time!

Property news continues to feed into many of the UK’s media headlines – whether that’s the movement in UK average house prices, progress towards energy efficiency, electrical vehicle (EV) charging points, or even ways to boost the value of your home post-pandemic.

Let’s take a peek below the surface of some of these stories.

Landlords appear ahead of the game for EPCs and energy efficiency

When it comes to residential Energy Performance Certificates (EPCs) and energy efficiency matters in general, landlords are evidently ahead of the game, according to research cited by Landlord Today on the 11^th of November.

The story refers to the Office for National Statistics (ONS) which has praised the proactivity of landlords in the private rented sector for the way they appear to have embraced energy efficiency matters.

English properties in this sector scored an average total of 66 points, according to the research, while in Wales the average was 64 points – giving both a D rated EPC.

This is well above the minimum E rating, which is most likely to be achieved by properties in England that were built before 1900, where the average energy efficiency score is only 54, or the average score of 51 achieved by such properties in Wales.

UK house prices hit record high last month

The House Price Index compiled by the Halifax building society and published on the 5^th of November recorded a highest-ever average house price of £270,027.

Prices rose throughout October – adding a further £2,500 to average prices in that month alone or an increase of 0.9%. In the year to the end of October, the annual rate of increase stood at 8.1%, achieving the highest growth since June and an increase in average prices for the fourth month in a row.

The continued rise in prices, fired by an imbalance between buoyant demand and faltering supply, is evidence of an unrelenting “race for space”, say market analysts as buyers look for bigger homes in the suburbs or countryside and away from city centres.

Average house prices continue to rise across England, but the rates of increase are more marked in Wales, Scotland, and Northern Ireland.

Increase in the number of homes for sale with EV charging points

A charging point for an electric vehicle (EV) is an increasingly important priority for homebuyers, according to a story in the Mail Online on the 4^th of November.

The volume of homes for sale with either a charging point on the property or in a street nearby has grown by 541% during the last 12 months, says the article, and a third of the advertised homes had their EV credentials upgraded only since September.

Underlying the growing demand for EV charging points, during an address to the Confederation of British Industry (CBI) on the 22^nd of November, Prime Minister Boris Johnson promised that all new homes released onto the market in the UK would be required to have such a facility.

As part of the government’s ambitious plans, supermarkets and places of work would also be required to offer EV charging points. Where major buildings are undergoing extensive renovation and upgrading, these too will be required to incorporate EV charging points.

The post-pandemic property features which can boost your house value

In an article on the 11^th of November, Introducer Today revealed some of the features most sought-after by homebuyers at present – and which could, therefore, add value to your house:

• with more homeowners spending more hours at home rather than in the office post-pandemic, a home gym has become a highly-prized amenity – and could add as much as an extra 44% (£116,267 given current house price averages) onto the value of your home;

• indeed, any kind of extension onto the original footprint of your home is likely to add value – as much as £97,770 given average prices at the moment;

• strangely, perhaps, the third most sought-after feature is a walk-in wardrobe – capable of adding an extra £89,843 (24%) onto the value of your home;

• newly fitted kitchens have always been a favourite among house hunters and updating and upgrading yours could bring in an extra £69,000;

• a swimming pool, on the other hand, is likely to add £58,000, while landscaping your garden might add £53,000; and

• converting your basement, building a loft extension, erecting a conservatory, or repaving the driveway could add £45,000, £28,538, £26,000, and £23,782 respectively.

All in all, you are likely to be surprised quite how much today’s homebuyers are prepared to pay for the most highly prized features.

According to a report to Parliament in June 2021, there are 4.4 million households in the private rented sector, accounting for some 19% of all households in England.

If you are the landlord of one of these homes, there is a high chance that you financed your purchase of the property with the help of a mortgage.

If you are thinking about a new or further investment in property in this way, you might want to consider the following tips and suggestions:

Buy to let mortgages

• a buy to let mortgage is a quite different type of long-term loan to a mortgage advanced on a residential property – a story in the London Evening Standard on the 9^th of July 2021 discussed in some detail how buy to let mortgages work;
• a buy to let mortgage, for example, typically looks first and foremost at the business potential of the investment;
• in other words, the lender of course considers the value of the property – because that is the principal security for the loan – but given equal priority is the potential rental income from the premises, since this is likely to be the source of income from which the landlord will pay the monthly mortgages instalments;
• in order to finance your investment in the property, you will need to look for rental income that is in excess of the mortgage repayments and other operating expenses you need to make – currently, 25% to 30% more, suggests the government-sponsored Money Helper;

Insurance

• as with any mortgage, your lender is almost certain to insist that you arrange sufficient property insurance to cover the value of the property and its need for reconstruction following a total loss – that insurance cover naturally safeguards both your own and the lender’s financial interest in the property;
• but bear in mind that your mortgage lender may also require that you have mortgage indemnity insurance;
• this is the lender’s protection against your defaulting on repayments and is, therefore, an insurance entirely for the benefit of the mortgage lender, even though in mnay cases you are responsible for paying the premiums;
• it is entirely different, therefore, to the landlord insurance you are likely to arrange in order to protect your investment against loss or damage, provide you indemnity against potential claims of public liability, and offer you compensation in the event of an insured incident leaving the property uninhabitable and thus leading to loss of rental income;
• it is just such landlord insurance cover in which we specialise here at Cover4LetProperty;

Risks of investing in property

• an article in The Times newspaper on the 15^th of September 2021 made the seemingly obvious point that a successful property investment depends on making more money from buying to let than you spend – something that might prove more difficult in practice than it sounds in theory;
• the article also suggests that it has become more difficult to make that profit these days than it probably was in the past – principally because of changes in the tax regime related to buy to let income and other legislative changes that demand greater expenditure on the part of landlords;
• a posting by the online listings website Zoopla on the 15^th of September 2021, for instance, explained that when you invest in a buy to let property you not only pay Stamp Duty at the standard rate but also a further 3% “surcharge”;
• other changes to the tax regime mean that landlords can no longer claim so many allowances against their buy to let rental incomes;
• in addition to the initial cost of purchasing your buy to let property, you will also face regular expenditure on repairs and maintenance (some £5,750 a year, suggests The Times), council tax, landlord’s insurance, and your mortgage interest repayments;
• to reiterate, therefore, the financial success of buying to let relies upon rental income exceeding outgoings, including any mortgage or remortgage repayments;
• if interest rates rise and the cost of borrowing increases, this may inevitably lead to the cost of monthly mortgage repayments and, so, reverse the possibility of rental income exceeding expenses.

If you are interested in joining the growing ranks of private sector landlords, buy to let mortgages may offer one of the most immediately available sources of finance. It may be as well to remember, however, that the potential for making this a viable form of business may rely on rents continuing to match any increase in the cost of borrowing if interest rates rise.

Your home insurance package is designed to safeguard the structure and fabric of the building and the contents of your home. But what about covering the cost of those annoying – and potentially expensive – occasions when some fault or other has to be traced? That often calls for the walls, floors, or ceiling of the property to be disturbed and opened up simply to gain access to the problem.

That is why many of our landlord insurance policies offer trace and access cover as a standard feature.

So how does trace and access cover help to safeguard your home or let property? What protection does trace and access cover offer to the homeowner or landlord?

Defining the problem

If there is a problem or incident in your property that is covered by your home or landlord insurance, you may think that’s the problem solved and the end of the matter. Unfortunately, simply resolving the issues may have consequential effects in other areas.

For example, if you have a spreading damp patch that has clearly arisen as a result of a leaking pipe, a plumber coming into your property might not immediately be able to see where the water is coming from to discover where the fracture or other problem is.

The industrious tradesman might need to start digging up floors or removing plasterwork in several different areas before they can identify the source and fix the problem.

What is trace and access cover?

So, imagine the scene – since it’s probably not at all unusual: your tenant has reported a damp patch on the ceiling. Being a responsible landlord, you send round a tradesman to investigate. It is then only a few minutes after he has arrived that he telephones to say that there is a leak of water from a burst pipe but asks whether you are prepared to pay for the work involved in tracing and gaining the necessary access to fix the leak.

A similar scene might play out as you sit down to dinner with the family in your own home, notice that damp patch on the wall, call out the plumber, and are told that you may need to pay for the costs of tracing the problem and accessing it to make the repairs.

Your landlord insurance or home insurance might cover the bill for any damage or loss caused by the leak. But the – potentially expensive – work involved in tracing it and then gaining access to repair the leak might not be covered by your insurance policy.

It is a shortfall that may catch out many home and let property insurance policyholders.

Even so, you have little option but to go ahead and conduct the necessary trace and access, since just the smallest of leaks can end up causing major damage to your property if left unrepaired. Leaving it unrepaired then leaves you responsible for “contributory negligence” if the damage worsens – and the settlement of your insurance claim is likely to be reduced accordingly.

Trace and access insurance at Cover4LetProperty

Here at Cover4LetProperty, our home insurance and let property insurance policies include trace and access cover either as standard or as an optional extra.

This gives you the reassurance and peace of mind in knowing that when you discover – or a tenant reports – a plumbing or electrical cable problem, for example, your insurance not only covers the loss and damage caused by that issue and the repairs required to address it (under the buildings element of your property insurance policy) but also covers the cost of tracing and gaining access to the site of the problem (and repairs thereafter).

It is a potentially expensive business since trace and access might involve stripping wallpaper, digging out plasterwork, or taking up floorboards to make the necessary repairs and stop the leak or resolve the problem.

What’s involved?

An illustration of the amount of work that might be involved in tracing and gaining access to a leaking pipe is given by the UK Leak Detection company and describes the sophisticated technology and equipment they may sometimes need to employ:

• instruments of various kinds used to measure the moisture in a wall or other surface where the leak is suspected;
• infrared cameras – which might be used to detect leaks under a solid floor by measuring deviations in temperature, and helping to limit the area of flooring that might need to be excavated;
• endoscopic surveys – using techniques developed by surgeons in the field of medicine, endoscopy involves making just a small hole near to the site of the suspected leak and inserting an endoscopic camera to take photographs or even videos;
• ultrasound detection – another technique borrowed from medical science is the use of high-frequency sound waves to build a picture of possible ruptures to pipes or leaks; and
• air pressure testing – by the use of carefully controlled air pressure equipment, engineers can detect any fall in pressure over a particular part of a water or central heating system and home in on that section of pipework to make the necessary repairs.

An action plan

If you take the prudent path by looking to arrange trace and access cover, it is still worth taking a few precautionary steps – as you would before buying any kind of insurance cover – to know exactly where you will stand in the event of a claim.

All insurance policies are different, of course, and what might be covered by one insurer may be excluded by another.

As with any policy, terms and conditions apply. For example, if there is no actual damage to the property caused by an escape of water, then you may not be able to claim for the repairs of sourcing the leak.

In short, insurance claims about repairs to your home or let property may be more complicated than they first appear – especially if expensive trace and access measures are involved. Specialist cover is available to indemnify you against this particular loss, so, trace and access cover may be incorporated as standard into your property insurance or available as an optional extra.

If you have any doubts or queries about your home insurance, landlord insurance, or the trace and access cover it provides, please feel free to get in touch with us.

Landlords, homeowners, and property investors are all likely to feel at least some impact from items making the headlines in recent property news stories.

Let’s take consider a little more detail about just some of those themes.

Do all energy efficiency measures save money after five years?

Landlords may be doubting whether the energy efficiency measures they have installed in their let premises will end up saving money after all, according to a story by Landlord Today on the 11^th of October.

Although improved energy efficiency is part and parcel of sustainability objectives, research shows that, for an average mid-terrace property, most such improvements fail to recover their capital cost even after five years.

Some of the costliest energy efficiency measures include:

• solar panels – on which you will spend an average of £4,800 but save only £1,650 after five years;

• double-glazing – expenditure of £4,250 but savings of only £850; and

• boiler upgrade – expenditure of £2,500 to save around £850.

On the other hand, the following measures appear to be highly cost-efficient:

• simple draught-proofing – spend £3 to save £215;

• roof insulation – spend £285 to save £500; and

• wall insulation – spend £400 to save £500.

Internet connectivity should be top consideration for property investors

Savvy property investors should give priority to locations where internet connectivity is strong and avoid investing in properties located in areas where that connectivity is weak.

Emphasising the importance of broadband connectivity hotspots, an article by the Buy Association recently explained that the series of lockdowns during the pandemic and the resultant upsurge in working from home has lent an added premium to homes with excellent connection.

Reliable, daily connection to the internet is no longer just something that tenants and leaseholders will find “nice to have” but is now an essential utility.

Not so grim up North as yields beat the rest of the UK

Once upon a time buy to let landlords might have considered the North of Britain to be a poor choice for investment. Recent research, cited by Landlord Today on the 14^th of October, suggests that the tables have turned quite noticeably. The highest rental yields for landlords are these days to be found in the Northwest of England and Scotland.

With average yields across the whole of Britain currently achieving some 4.2%, the Northwest has recorded average yields of 5.4% and Scotland of 5.1%.

Other regions such as Yorkshire and the Humber, the Northeast, Wales, and the West Midlands have also reported average yields higher than the national average – in the range of 4.8% to 4.3%.

Yields in London are close to the national average while in practically the whole of the remainder of the country – the Southeast, Southwest, and East of England – rental yields have fallen below the national average of 4.2%.

Annual house price growth slowed last month

Ever since the easing of lockdown, house prices across the UK have shown an unrelenting and steady increase. That trend may now be slowing, according to the house prices index maintained by the Nationwide building society.

The annual growth in house prices had fallen back to 10% in September, compared with the annual growth of 11% recorded to the end of August – although there was, in fact, little change in the monthly movement of house prices once seasonal factors have been taken into account, says the building society.

Wales and Northern Ireland showed the strongest evidence of increases in average house prices during this third quarter of the year while London performed the weakest.

While house prices have continued a more or less steady rise, average incomes have lagged behind – so making housing affordability a greater challenge. The deposit required by a first-time buyer, for instance, is now around 20% of the current purchase price. That makes the deposit alone equivalent to around 113% of the buyer’s annual income – an all-time high.

In running a buy to let business, any landlord relies on a fundamental sense of responsibility from tenants who will take care of the let property. From time to time, that trust is misplaced or abused and a tenant – or friends and visitors of the tenant – might inflict malicious damage to the property or the landlord’s contents.

For that reason, many of our customers ask whether we cover malicious damage. We are pleased to say that here at Cover4LetProperty, we do indeed include malicious damage (up to set limits as defined in your policy document) as part of our landlord insurance.

What is malicious damage?

The difference between accidental damage and malicious damage is that, with the latter, it is damage caused on purpose – a form of vandalism –examples of which might be smashed windows, broken furniture, holes kicked in walls or doors, graffiti, or even arson.

Protecting your property against malicious damage

It might often be difficult to disentangle instances of malicious damage from the more common accidental damage – since the former involves some element of intent. You will want to avoid disputes with your tenants about whether any damage has been accidental or was done maliciously, on purpose.

So, we offer the following brief tips and suggestions about reducing the scope for disputes and misunderstandings relating to breakages of a type that might sometimes be incorrectly assumed to be due to malicious damage:

• make sure you take a full inventory of the contents of your property and describe the condition of each item listed;
• where realistically possible, support your inventory with photographs – this should be relatively simple these days with digital photography;
• make sure that you or your property agent take an accompanied inventory with the tenants prior to them moving in. Ensure that the tenant signs off against the inventory and your description of the condition of the items. Once again where possible, try to get the inventory and the tenant’s signature witnessed by a third party;
• accept the reality of life that inevitably there will be some minor damage, wear and tear, losses, and breakages associated with a typical tenancy. When they arise, try to avoid treating every instance as cause for reimbursement and threats to apply for deductions from the deposit. These sorts of minor issues might be better written off as a legitimate business cost and business risk;
• where more severe damage or accidents arise, make sure that you take a photograph of the problem and make your request for reimbursement to the tenant in writing, providing both before and after photos, and a copy of the original inventory;
• stay polite at all times and avoid using inflammatory terms such as careless, malicious, wilful, or deliberate – and the like – in your communications.

Some of these basic common sense steps may help avoid conflict and recriminations.