Don’t let anyone tell you they’ve learnt all there is to becoming a landlord. It’s almost certainly more difficult than you think. The challenges will vary from one type of property to another, depend on the tenants you attract to live there, and might even be influenced by your own personality.

Because it can be more than a little overwhelming taking on board all that you’ll need to know, here we answer some frequently asked questions (FAQs) for landlords.

Being a landlord – how does it work?

The principle is a simple one – you invest the hard-earned cash or money you have borrowed by way of a buy to let mortgage, in the purchase of a property you then let to tenants in return for the regular payment of rent.

As the landlord and owner of the property, you are responsible for maintaining your property, but you also have a long list of responsibilities and obligations, many of which are legal obligations – and all of them are outlined on the government website.

You can also take a look at our guides: Landlord Legislation Guide and Landlords Guide to Health & Safety.

Do I need to be qualified?

One of the attractions and widespread popularity of buying to let is that there is no need for any formal qualifications – but commitment, hard work and every lesson gained from experience is still going to be the order of the day.

If the property you let is a House in Multiple Occupation (HMO), though, you need to meet certain criteria that are less relevant to your competence as a landlord, but rather that you are a “fit and proper” person. That is to say, you (or your agent) are without a criminal record and have no convictions for breaching landlord laws, regulations, or codes of practice.

What rent can I charge and how much is it going to cost me to do so?

Although your buy to let business naturally looks forward to maximising rental income, you also need to be realistic – to attract and retain responsible tenants and reduce the number of expensive voids.

Careful research into the area in which your let property is situated and the rents being charged for comparable properties, maintained to the same standards, may give you a good clue as to what is reasonable. You might also want to consult a letting agent about a realistic rent for the property you are offering.

The principal costs of running your buy to let business are likely to include the mortgage repayments (typically, in the case of buy to let mortgages, these are likely to be interest-only mortgages), the cost of repairs and maintenance, any letting agent’s fees, and landlords’ insurance.

What do I do with the deposit I ask my tenants for?

You almost certainly asked for a deposit as security for any damage or breakages your tenant might cause during the tenancy, the payment of rent and other bills when they fall due, and the possible cost of cleaning the premises when the tenancy comes to an end.

As with any security deposit, it needs to be returned – less any deductions that are agreed upon – to the tenant when the tenancy ends. That means there needs to be sufficient money available to you to make that payment.

To safeguard the deposit – in the interests of both you and the tenant – the Tenancy Deposit Protection scheme requires that any deposit is held for safekeeping by an officially approved third party, who releases the money, in the amount agreed by you and your tenant, at the end of the tenancy.

Further reading: Guide to Tenancies.

Do I need landlord’s insurance?

Although there is no legal obligation to have landlords’ cover, the answer to the question will be a resounding ‘yes’.

The purchase of your buy to let property almost certainly represents a significant investment. You will now rely on the generation of sufficient rental income to repay any mortgage and keep it properly maintained and repaired. So, the biggest nightmare is losing it all from incidents such as fire, flooding, or subsidence, for example, as well as other risks to the building and its contents.

The landlords’ insurance we arrange here at Cover4LetProperty is specially designed to offer not only the protection that the structure and fabric of your property needs (in the form of buildings insurance) but also to safeguard your business interests – providing you:

• indemnity against claims of liability (if a tenant, one of their visitors or a member of the public is injured, for example, or has their own property damaged on or within your premises); and,
• loss of rental income (up to pre-set amounts) following a significant insured incident which leaves your property temporarily untenantable.

What’s more, if you are buying the property with the help of a mortgage, the lender is almost certain to require a certain level of buy to let insurance cover to protect their interest in the structure and fabric of the building. Note that the cover required by your lender is sufficient only to safeguard the outstanding mortgage balance on the property and may not cover the full cost of rebuilding in the event of a major disaster and its total loss.

Why do I need specialist let property insurance, rather than any other type of property insurance?

As a business-minded landlord, the risks you and your property face are simply different from those of a standard residential owner-occupier.

That is why a buildings insurance and contents policy typically arranged for the owner-occupying homeowner will not cover a property that is being let out either totally or even in part (a room or two in your own home, for instance).

In practice, there may be many variations and additional elements of cover provided by your landlord insurance policy (such as the loss of rental income that we have already mentioned) – and it is typically a broker’s responsibility to help you understand what those additional areas are and how they might benefit you.

What are let property insurance brokers?

The property insurance broker acts as a centre of excellence in terms of knowledge of the marketplace and in helping clients access the most suitable product for their own unique needs and circumstances.

Putting it practically, we may know, for example, that a given insurance company offers automatic cover for subsidence – something that is no longer universal (but a standard feature of all the policies we arrange here at Cover4LetProperty). The broker’s job is to bring that – and other elements like it – to the attention of a potential policyholder to provide them with informed choices.

What does let property insurance cover offer by way of protection?

Only a careful reading of your insurance policy documents will set out the full detail of everything that is covered – that’s why we’d always encourage you to study the documents carefully.

Typically, however, a policy is likely to offer cover across four principal headings:

• the structure and fabric of the building itself (typically, therefore, called buildings insurance);
• any contents you may have in it (landlords’ contents insurance);
• indemnity against the risks of you being sued by someone who has suffered injury or property damage after coming into any kind of contact with your property (landlord liability indemnity insurance); and
• compensation for the loss of rental income – following a major insured incident which leaves the property temporarily unlettable, pending repairs and reinstatement.

Do these areas include all-risks cover?

That is unlikely to be the case – but is often an optional extra offered by your insurer.

Typically, all let property insurance policies will contain conditions and exclusions that exist as much for your protection as to limit the insurer’s liabilities.

For example, some policies may exclude cover for electronic items that are included in your furnishings as part of the rental deal. There is rarely any alternative but to read and compare the policy details to be clear – and when in doubt, to ask your insurance broker.

I am refurbishing my let property, which remains unoccupied by tenants during the building works – what is the insurance position?

Typically, insurance companies see a significant difference, in terms of risk, when properties are unoccupied – when renovation work is underway, or there is a longer than usual void between tenancies, for example.

Burglaries and vandalism may be more common, and there is the further risk arising from otherwise relatively minor maintenance problems going unnoticed and creating major cumulative damage.

For that reason, policies typically won’t provide cover for properties that stand unoccupied for more than 30 to 45 consecutive days – the exact period varying from one insurer to another. This is a restrictive condition that also typically applies both to owner-occupied and let properties.

To maintain the protection and safeguards your property will continue to need in situations such as this, you may want to arrange specialist renovation insurance.

Further reading: Guide to Renovating.

What is a resident landlord?

The term is self-explanatory and refers to someone who rents out a room or rooms in part of the property in which they continue to live as their only or principal place of residence.

The definition and an overview of the essential rights and obligations of such a landlord are outlined on the official government website, in its description of the Rent a Room scheme.

Why should I rent out a room in my own home?

A handy way of earning some extra cash, suggests the government-back Money Helper, is through renting out a room in your own home – and improving your bank balance in that way is a prospect that few of us are likely to turn down.

You can earn up to £7,500 a year tax-free (correct as at October 2022 but this could change) this way and, more altruistically perhaps, you might also reassure yourself that you are doing your bit to help solve the nation’s current shortfall in suitable, affordable housing.

What are my responsibilities as a resident landlord?

You have a basic responsibility for ensuring that any room or rooms you let are safe and in a reasonable state of repair.

Provided that is the case, you are entitled to charge whatever rent you think is reasonable and is likely to attract the kind of tenant or lodger you deem to be appropriate.

But what if it doesn’t work out with a particular lodger?

One of the attractions of letting space in your own home to someone who may be regarded as a tenant is that the same rules do not apply as if it were an entirely self-contained let.

If they have a room but also share some facilities with you, such as your kitchen, bathroom, or sitting room, your lodger or tenant has what is known as excluded occupation. Typically, you may ask them to leave – evict them in other words – whenever you like and without the need for any kind of court order.

If your lodger or tenant has a more or less self-contained space in your home, with no need to share any facilities whatsoever, he or she may be able to claim basic protection under the housing laws, and you will then need a court order to secure their eviction.

If a let out a spare room, where do I stand as far as home insurance is concerned?

Most privately owned homes, of course, are protected by one or another form of home building and contents insurance. What is the impact on this safeguard if you are letting part of your home to someone else?

Different insurers may have different policies, so your first step needs to be letting your insurer know that you are planning to let space in your home to a lodger or tenant.

The answer might be a simple change of policy (to one which includes landlord insurance), an increase in the premiums you pay to continue the cover, or a termination of the cover you presently enjoy, and its replacement by another.

For reasons that may seem reasonable enough, your current insurer is likely to be especially concerned about the effect any such let might have on the insurance used to protect the contents of your home.

Additional considerations when having a lodger

Unlike landlords of self-contained dwellings, you are not subject to the requirements of the tenant’s deposit scheme and may choose any appropriate way of managing the deposit you may ask of a lodger or tenant.

If you are paying the bills for water, electricity, drainage, water, and other utilities you may charge whatever proportion of these costs you consider necessary in the rent that you charge.

If you have a mortgage on your home and do not inform your mortgage provider that you are letting out a room, it could cause problems further down the line – so do get in touch with them.

You remain responsible for the payment of Council Tax, however, and may need to inform your local authority if you no longer qualify for a single person’s discount on your assessment for the tax.

Becoming a resident landlord may be easier than you think and simply involves letting out to someone the spare room or rooms that you may have in your home – and, as at the time of writing (October 2022) you stand to benefit from a useful tax allowance of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.

Do you have more questions?

We hope these landlord insurance FAQs have proved useful. If you have any questions relating to your property insurance, please do get in touch with us. We’d be delighted to help.

There are many pressures and challenges faced by the buy to let landlord these days – and there are inevitably occasions when things can go horribly wrong. That’s when you will turn to your landlord insurance policy for support and financial assistance.

Let’s see how you can get the broadest possible cover at times like these by taking a look at those elements that might be included as standard items for your particular landlord insurance policy or which may be available as extras or add-ons:

Loss of rental income

• your buy to let property is a business investment that relies on the steady income stream rents you receive;
• following an insured incident that leaves the property uninhabitable – and therefore unlettable – until the necessary repairs or reinstatement have been done, many landlord insurance policies provide for compensation for that loss of rental income;

All tenants cover

• some insurers consider certain categories of tenant as too high a risk and decline cover if you are offering tenancies to these groups;
• specifically designated all-tenant cover, on the other hand, maintains the insurance safeguards you need – whether or not your tenants happen to be drawn from the unemployed, welfare beneficiaries, or others;

Landlord liability indemnity insurance

• landlord liability indemnity insurance is an element of cover so critical that practically any policy will include its provision;
• the cover indemnifies you against claims from your tenants, their visitors, neighbours, or even members of the public who may have been injured or had their property damaged through some contact with your let property;
• liability claims of this nature can involve substantial payments of compensation, so landlord liability indemnity insurance typically offers cover for a minimum of £2 million – and, often, a lot more;

Subsidence

• subsidence is probably one of the most serious perils to threaten any property – with remedial works invariably proving extremely expensive and sometimes requiring the demolition of the building;
• the insurance excess on subsidence claims can be high indeed – £1,000 or more – and many insurers simply fail to extend cover for such risks entirely;
• if you are in any doubt as to the structural integrity of your let property or its vulnerability to subsidence, therefore, you might want to ensure cover for this peril is included as standard;

Malicious damage

• however carefully you vet your tenants and take up references before granting any tenancy, there is always the possibility that you are landed with irresponsible individuals;
• some landlord insurance policies, therefore, incorporate the risk of malicious damage by your tenants or their visitors as a standard element of cover.

When you are purchasing your landlord insurance policy, there might be a natural temptation to get it over and done with as fast as possible so that you can continue with your normal daily business.

What we have hoped to illustrate is the importance of spending a little extra time scrutinising the policy, its terms and conditions, and just what is and what is not covered. You’ll be especially pleased to know, that all the elements of cover we have just mentioned come as standard with the policies we arrange (up to pre-agreed limits). So, you can be certain you have comprehensive protection for your investment property.

There is an ever-expanding raft of laws regulating the conduct of landlords in the private sector. So, you might reasonably expect the powers that be to frame the legal requirements for landlords with respect to asbestos in a clear and unambiguous fashion.

Unfortunately, the critical piece of legislation, Control of Asbestos Regulations (CAR) 2006, has managed to create considerable confusion on this subject due to the use of some highly ambiguous wording.

While we take a closer look at the laws regulating asbestos in rented dwellings, it is important to note that what follows is not legal advice. If you are in any doubt whatsoever, you must consult a specialist qualified to speak in detail on the law. Hopefully though, the following will give you some indication of the issue and what needs to be considered.

Asbestos – a building material

Asbestos was heavily used in construction between the 1950s and 1980s, but surprisingly it was only actually outlawed in the UK at the very end of the 20th century.

Broadly speaking – and out of an abundance of caution – it is probably safe to assume that any property built (or substantially modernised) between 1950 and 1999 may well have asbestos incorporated into its construction.

Asbestos – landlords’ responsibilities

The CAR regulations make clear that landlords have a legal duty of care to inspect their property for asbestos and to take appropriate steps to deal with it if necessary.

These are clearly outlined in various online guides – a notable example is that published by the British Landlords’ Association (BLA).

Unfortunately, confusion arises because the CAR regulations also state very clearly that they only apply to landlords leasing or letting out non-residential properties – in other words, they apply only to commercial properties. Quite simply, therefore, it would be perfectly possible to read these guides and summaries and conclude that, as a residential landlord, you do not need to worry about asbestos in your property or to make sure that it is either safe or needs to be removed.

This leaves landlords in an unenviable position of confusion, and it isn’t entirely easy to understand the logic behind it. It might help, however, to understand the issue in the wider context.

The wider context

The CAR regulations actually form part of the much more broadly based health and safety at work legislation that goes back to the 1970s. That legislation makes it perfectly clear that the landlord of premises that are being used for commercial purposes is responsible for it being a safe environment in which to work – and safety concerns here are likely to include the presence of asbestos, asbestos inspections, and any remedial actions that may be required.

Of course, it might be argued that your residential buy to let property is not being used for commercial purposes. But as you are using it for the purposes of generating an income, it might reasonably be seen as falling within the scope of the above-mentioned legislation.

There really isn’t a bottom line to this unnecessarily confusing situation, other than to say that it might be prudent for all landlords, irrespective of how you read the legislation, to undertake appropriate asbestos surveys and actions where required.

Landlord’s insurance

Remember that if you purchase your landlord insurance online or anywhere else, it is likely to remain valid only if you have fully complied with all the legal requirements relating to health and safety within your property.

You can find a rather more detailed discussion of the subject here, relating to properties in England and Wales. For properties in Scotland, please click here.

Please remember that you may need to take specific advice relating to your particular situation and circumstances.

The central heating boiler is the beating heart of any home. And as winter approaches – and if you haven’t already – now is a good time to make sure yours is maintained and ready for the cold weather.

As energy prices have started shooting through (as October 2022), it has become more important than ever that your boiler continues to work as efficiently – and, therefore, as economically – as possible.

Certainly, boiler breakdowns are incidents you want to avoid. Any breakdown is likely to happen when you need the heating the most and turns into something of an emergency. And emergency callouts to get it fixed are then going to be all the more expensive.

Maintenance

The best way of keeping your boiler working at peak efficiency and avoiding those unexpected breakdowns, of course, is to ensure that it is regularly serviced.

Whether it is the home you live in as the owner-occupier or one that you let to tenants, timely maintenance helps to prevent those troublesome and costly callouts when boiler engineers are likely to be at their busiest. It may typically even be a condition of your buildings insurance policy to ensure that your boiler is regularly serviced.

If you are a landlord, it is more than just prudence, but a matter of law. You have a general obligation to ensure that the accommodation you let is fit for habitation – and that means a warm environment in winter and, hot water on tap.

More specifically, you are required to have any gas-fired boiler installation – together with any other gas appliance – inspected and checked by a Gas Safe-registered engineer at least once a year.

Even if you live in your home, a condition of your home insurance policy is that everything is regularly serviced and maintained – so an annual boiler service makes sense.

What to do if your boiler breaks down

A regular domestic boiler should be serviced once a year, says the Boiler Guide in a posting on the 6^th of July 2022. A properly serviced boiler will help you save energy – and, therefore, lots of money on those escalating fuel bills – as well as keep your home warm during the cold winter months, explained an article by Ideal Home on the 4^th of January 2022.

Whether you are a homeowner looking to manage your energy bills or a landlord keen to comply with the law on maintaining any gas appliances, you’ll want to avoid boiler malfunctions and breakdowns.

But what should you do if and when the worst happens?

• whether you are a homeowner or landlord safety first is paramount;

• if there is a smell of gas, the normal colour of the flame changes, or there are sooty marks around the boiler, turn it off straight away and call the emergency gas line on 0800 111 999 (open 24 hours a day, whatever energy supplier you use);

• if the pilot flame keeps going out, once again don’t try to re-light the boiler, but call out a Gas Safe engineer;

• nevertheless, if you are confident that everything is otherwise safe, British Gas suggests a number of fixes that you might try yourself before calling out the professionals;

• these include resetting the pressure gauge on your boiler, checking that the condensate pipe (on the outside of your home) hasn’t frozen up, resetting the thermostat or boiler temperature gauges, relighting the pilot light (provided it is not constantly going out – in which case, call the gas engineer), or resetting your boiler if it has “locked out”.

It is important to stress, however, that you should only try these suggested remedies if you are confident in what you are doing and are absolutely certain that the boiler and its gas supply remain safe. Otherwise, shut everything down, make that call to the emergency gas line, and await the arrival of a trained and certified engineer.

Recent UK property news highlights a surge in equity release agreements and a significant injection of new mortgage lending.

Meanwhile, landlords look to the advantages of operating as a limited liability company although many are also in danger of quitting the buy to let market altogether if faced with rent freezes, ongoing tax demands, and the challenge of sheer red tape.

Let’s take a peek behind the headlines.

Equity release is booming

Older homeowners looking to unlock some of the capital value in their property have fuelled double the usual number of equity release agreements in the past seven years, according to a story in the Daily Mail on the 8^th of September.

Whereas there were fewer than 2,000 equity release deals signed each month in 2015, the monthly average so far this year has reached more than 4,500.

Citing reasons such as escalating inflation and the general cost of living, homeowners can borrow up to 60% of the value of the equity they own in their homes yet still continue to live there, pending the lender’s recovery of both the capital and rolled-over interest payments when the owner dies or goes into long-term care and the property is sold.

Tax benefits drive surge in landlords forming buy to let companies

The tax benefits available to landlords who run their buy to let business as a private limited company rather than on their own private account has led to a surge in company formations, revealed Landlord Today in a story on the 12^th of September.

Recent surveys have shown that during the year to the end of August, the number of landlords incorporating their businesses rose by two and a half times the number who had formed limited liability companies in the previous 12 months. New company formations have grown by 11% each month since the beginning of this year.

The sound business case for incorporation includes the protection afforded by limited liability together with the tax advantages of paying corporation tax rather than personal income tax.

UK’s property market sucks in £84bn of new mortgage lending

The second quarter of this year has seen new mortgage lending reach a total of £83.9 billion – some 1.7% up on the previous month – according to figures published by Yahoo Finance on the 13^th of September.

New lending of this order underlines the current strength of the UK property market even while house prices have reached a record high of £294,260 for the average home, an increase in interest rates, and a fall in the number of mortgage products available – August registered a 13% drop or 517 fewer such products.

As inflation and increases in the cost of living begin to bite, however, average house prices nevertheless continue to rise faster than average salaries. Against that background, analysts predict a slowing down or easing of the housing market.

Taxes, rent freeze and red tape will drive out landlords

In a story on the 14^th of September, Landlord Today revealed predictions by the online listings website Zoopla, that more landlords risk being driven out of the buy to let market.

The commentators argue that an intensifying tax regime and a raft of legislation and regulation are compelling many landlords to sell up. As the pool of available rental accommodation decreases but existing tenants look to renew their tenancies, the widening gulf between supply and demand will inevitably fuel further increases in rent levels.

In place of more legislation, it is argued, further investment needs to be stimulated so that more accommodation becomes available to rent.

It’s a lesson any landlord will learn pretty quickly. From the moment your tenants move in, you effectively lose certain rights of ownership until such time as the agreement comes to an end and they move out.

A painful lesson

There are times when that very fact may become an all too painful reality if you are unfortunate enough to find yourself lumbered with problem tenants.

From the very outset, therefore, you will be trying to avoid anything like that problem. It means that you’ll need to exercise the best and most effective judgment you can muster when selecting and vetting potential tenants.

From the very word go, you’ll be looking to avoid unintentionally letting people into your property who subsequently prove to be troublesome.

Just in case

Since there’s nothing quite like anticipating trouble before it begins, you need to be fully aware of your legal rights and responsibilities in terms of rental agreements, deposit management and all of your responsibilities and obligations as a landlord.

Having a landlord’s insurance policy in place, like those on offer from providers such as us here at Cover4LetProperty – where cover against malicious damage by tenants is a standard policy inclusion – is a further prudent and common-sense precaution.

Avoiding trouble

We’re not saying that you are necessarily wielding a carrot and the stick, but avoiding trouble takes a healthy dose of give and take – try giving tenants what they want but stick to some basic ground rules before granting any tenancy agreement.

We have written separately about keeping your tenants happy by meeting their most obvious wants. So, let’s consider the rules you might want to follow when vetting applications and deciding who will qualify for a tenancy – they’re rules designed to help you avoid problems in the first place rather than having to find ways to solve them:

Interviews

• these need to be approached seriously – more than the casual chat you have while showing them around;
• instead, set aside half an hour or so and talk about their job, background, attitudes, and prospects – you might be surprised how conversations such as this can help spot trouble further down the line;

References

• aim to take up two to three references – though bear in mind that anyone who has been asked to write a reference can be expected to be supportive, so you may need to read between the lines;
• references from at least two previous landlords will be more objective – and more valuable for that;
• a reference from an employer may be useful but is unlikely to give you more than confirmation of the tenant having a job at least;

Credit checks

• a check with the relevant credit reference agencies is fast and cost-effective – and applicants with a poor credit history may think twice about applying or will at least need to explain why they’ve had difficulties managing their debts;
• ask to see copies of recent utility bills they’ve paid;
• ask for their bank details to confirm they have a current account – though you won’t be able to check the balance unless they agree to your doing so;
• insist on getting sight of at least the two most recent payslips – and check that their monthly take-home pay is roughly three to four times the rent you are seeking;
• ask what credit cards they currently hold;

Personal – Right to Rent

• you have a legal obligation to check that any prospective tenant has an immigration status granting the Right to Rent in the UK;
• check their identity by asking to see a passport or driving licence;
• depending, of course, on their current address, you might even choose to visit them where they currently live.

In a number of these areas, of course, there is scope for manipulation or falsification on the part of the prospective tenant. Rigorously performing the checks, though, remains your biggest opportunity for avoiding serious problems and issues if a tenancy is granted.

If you own an empty house or flat, you will want to compare unoccupied property insurance to find the most cost-effective and appropriate solution for you – the solution that offers genuine value for money.

This article discusses the principle of unoccupied property insurance – what it is, who needs it, and what you might want to consider when comparing empty let property or home insurance quotes.

What is an unoccupied property?

Broadly speaking, the insurance industry defines property as unoccupied when its occupants have been absent for a specified maximum number of consecutive days as set out in the insurance policy documents.

The interval specified in the policy documents is typically between 30 and 45 days although the precise period may vary according to the particular policy and the insurer in question.

When that period expires, the existing insurance cover will typically lapse altogether or become severely restricted – this can leave the cover reduced to that against floods, lightning, earthquakes, and explosions, which is so-called FLEE cover. To restore the full protection normally provided by your property insurance, therefore, you will need specialist unoccupied property insurance – which may also be known as empty or vacant property insurance.

Why is empty house insurance needed?

Insurance is about the management of risk – and insurers invariably regard an unoccupied property as a higher risk than a property that is occupied.

The logic behind this is simple:

• unoccupied properties may be far more attractive to burglars and vandals – in a special briefing for members of the Royal Institute of Chartered Surveyors (RICS), security specialists VPS warned that around half the property fires in the UK are deliberately started in acts of arson; and
• empty properties are at greater risk of contents suffering theft, loss or damage, and also structural damage resulting from otherwise relatively minor maintenance issues – such as leaks, broken windows, slipped slates, and the like – which can nevertheless develop into incidents involving extensive damage if they are not promptly dealt with.

What is the difference between vacant and unoccupied?

Typically, insurers make little or no distinction between an unoccupied and an empty building. If you are not living, or you do not have tenants (or anyone else) living in your buy to let property, then it will be deemed as unoccupied – even if it is furnished.

If you have the builders to work on an extension or renovate your property, they may be there throughout the working day but naturally, leave it empty during the night and on days off – if no one is living there while the building works are in progress, the property will be regarded as unoccupied.

Who may need unoccupied home insurance?

Empty property insurance may be required by homeowners, landlords and other owners of property that is classed as empty, vacant, or unoccupied. The reason the property is empty is largely irrelevant. It could be the result of:

• a longer than usual search for new tenants while you wait for them to move in;
• the property is in probate or the subject of divorce proceedings;
• occupants have moved out while renovations or modifications are in progress – these can very easily overrun, no matter how carefully you may have planned the work;
• you are going on an extended business trip or perhaps you are treating yourself to the holiday of a lifetime.

My property is going to be unoccupied for three months. Am I still covered?

The answer is almost certainly not, although you may need to check the small print of your policy to be absolutely certain.

Many insurance providers understand that your house or flat may have no one living there at times due to reasons such as annual holidays, tenant changeovers (if yours is a let property) and so on. That’s why you may find that a typical buildings and contents policy will provide cover for empty properties for up to a specified number of consecutive days.

Should it remain unoccupied after that initial period has expired, then elements of your cover may become null and void. The only solution in such situations is to take out a specialist unoccupied property policy.

You may be interested to know that this condition also typically exists in home insurance policies for owner-occupiers – it is not only an issue for landlords.

Unoccupied property insurance and probate

When someone dies, he or she will typically leave property and other items of their estate behind. A legal process needs to be completed before they can be distributed through inheritance to whoever the beneficiaries of the estate may be – and these are typically identified in the deceased’s will.

This legal process is called probate and it may have an effect on the insurance of a property that you own, administer, or have the expectation of inheriting:

• when somebody dies, whether or not they have left a will, there may inevitably be a period during which any property they owned and lived in, is sitting empty and unoccupied;
• while the necessary legal processes concerning inheritance and transfer of ownership are undertaken, it might in some circumstances be impossible to do much with the property concerned before completion of probate;
• once a property sits unoccupied for more than a period of time specified within any buildings and contents insurance policy, any existing cover may become invalid;
• cover may only be maintained by arranging suitable unoccupied property insurance – probate itself makes no difference to this requirement;
• the conclusion here is relatively straightforward, if you are responsible for the administration of property under probate or are expecting to inherit it in due course, you should take all steps to make sure that it is covered by the appropriate unoccupied property insurance if nobody is currently living there; and
• it is also worth bearing in mind that once you do have appropriate cover in place, the policy may require someone to regularly inspect the property and to keep it in a tidy, lived-in, and well-maintained state of repair – care for the external appearance of the property may help to deter thieves, burglars, vandals, and squatters.

If you are the beneficiary of an inheritance relating to a property, the original owner may well have intended that you should obtain a degree of financial benefit from the property concerned. It is therefore in your best interests to be sure that you understand what role unoccupied property cover may play in that process.

What happens if I don’t take out this revised form of cover?

Aspects of your insurance protection may simply lapse.

Your property’s empty status may come to light only too readily during the routine investigations made by any insurance company in the event of your making a claim on the policy. That might lead to your claim being rejected.

That is likely to be a risk that you decide is simply not worth taking.

How to compare vacant property insurance

Not all let property insurance offers the same degree of cover and similar distinctions also apply to empty property insurance.

For example, some policies may offer only market value replacement for your contents whereas others may provide new-for-old replacement. There may be a slight cost difference between the two, but one may suit your requirements better than another.

Some unoccupied home insurance policies will offer elements of cover as standard while others may not – that is why it is important to not just compare the cost of the cover, but the policy features and benefits.

Terms and conditions

Naturally, different unoccupied property insurance policies will have different terms and conditions – as you may see when you compare unoccupied insurance quotes. These differences could include requirements to:

• arrange for the property to be inspected regularly and maintain it in a good state of repair;
• keep a log of those inspection visits made and any work undertaken;
• maintain the garden and, if you have the builders in, clear away any rubble and debris; and
• if possible, arrange for a light to switch on automatically when darkness falls – to give your property a lived-in look to help deter thieves and vandals.

Next steps

If you compare empty property insurance policies, you may quickly be able to find the cover that most suits your own particular needs and circumstances. Of course, we are always on hand to help you find the insurance cover you need, so please always feel free to ‘phone us on 01702 606301. One of our dedicated team will be delighted to help!

Further reading: Guide to Unoccupied Property

If you’re new to the business of being a landlord – or have simply grown a little rusty – it can be a challenge to remember everything that needs to be done.

To help you along the way, therefore, we offer a brief checklist for landlords of properties in England to get you going. It is by no means an exhaustive list – and you might want to read around the subject or gather more in-depth knowledge by browsing one or more of the many guides you’ll see listed on the right hand side of our homepage:

Safety first

• the moment you take on the role of landlord you also assume responsibility for the health and safety of your tenants – as a matter of both common law and statutory obligation;

• fall down on those responsibilities and you could find yourself facing stiff fines and penalties or ordered to pay a substantial sum in damages if you are held liable for any negligence;

Gas safety

• you are required by law to have a gas safety inspection carried out by a qualified engineer every year – and give a copy of the certificate of approval to your tenants;

Electrical safety

• the housing charity Shelter reminds landlords in England that compulsory electrical checks have been in place since the 1^st of July 2020 and that these need to be repeated at least every five years – with a copy of the results of this electrical inspection condition report (EICR) also made available to your tenants;

Fire safety

• the regulations in England relating to the need for smoke alarms and carbon monoxide detectors have been strengthened and new rules come into force from the 1^st of October 2022;

• if you are the landlord of a House in Multiple Occupation (HMO) the conditions of your operating licence may impose even further requirements for fire safety, depending on the nature of your HMO, suggests the Fire Safety Advice Centre;

Energy Performance Certificates (EPCs)

• you are required to provide your tenants with a copy of the latest Energy Performance Certificate (EPC) for the let premises;

• before you can legally let the property it must have achieved an EPC rating of at least an E – but stricter requirements are under active consideration by the government and, by 2025, you might expect the minimum EPC rating to move up to a C;

Housing Health and Safety Rating System (HHSRS) inspections

• in addition to the specific legislative requirements for safeguarding the health and safety of your tenants, local councils in England and Wales are also empowered to carry out Housing Health and Safety Rating System (HHSRS) inspections whenever they see fit or if such an inspection has been requested by your tenants;

• if you are the landlord of an HMO, you must expect the local council to carry out just such an inspection within five years of your having applied for your HMO licence;

Additional checks

• in addition to checks designed to safeguard the health and safety of your tenants, other legislation relates to the landlord’s duty to supply a copy to tenants of the latest government publication How to Rent guide;

• you also have a duty to check the immigration status of prospective tenants to ensure that they have a Right to Rent; and

• any deposit you take from your tenants – as security against breakages, for example – must be placed for safekeeping with an approved Tenancy Deposit Scheme.

Even allowing for the fact that this checklist is by no means exhaustive, it is clear that becoming a landlord also comes with a whole raft of legal responsibilities and obligations. Your failure to comply with any one of these rules or regulations can attract substantial fines – and, in some cases, even imprisonment – so, you will do well to follow them carefully and keep thoroughly up to date with any changes.

Further reading: Landlord legislation guide, Landlords’ guide to health and safety and Guide to Tenancies.

Please note the information within this blog typically relates to properties in England only and is based on our current understanding of the Law. We recommend you seek advice from the relevant authority if you have any queries relating to the above.

Current property news reveals some more of the potential fault-lines in the UK housing market.

Inflation and the rising costs of living encourage would-be tenants to ask for tenancies with all bills paid. The house price index shows some signs of faltering, and more landlords threaten to sell up. While first-time buyers are priced out of their prospects for owning a home by the seaside.

“Bills included” becomes the most searched-for term by renters

When prospective tenants are searching for their likely new rented home, the feature they most want from the tenancy is “bills included”, according to a survey cited by Landlord Today on the 25^th of August.

The priority given to tenancies with “bills included” may be a reflection of the rapidly increasing costs of energy on the eve of what is likely to be a fairly bleak winter for many. Whereas the inclusion of utility bills within a tenancy appeared in only sixth place in the order of tenants’ priorities a year ago – lower than “a garden”, “garage” or “pets allowed” – it has now leapt into first place.

A dearth of available homes to rent has also forced tenancy searchers to cast their nets over a much wider area. Four years ago, for example, tenants could concentrate their search into an area of roughly 70 sq. km. These days, the search area has expanded to cover an average of 137 sq. km.

Prices fall likely more due to holidays than rate rises says Rightmove

The house price index maintained by online listings website Rightmove showed a marginal fall in August – for the first time this year.

House prices fell by just 1.3% – the equivalent of £4,795 – during August to an average of £365,173.

However, Rightmove also points out that it is entirely usual for prices to fall during August in most years – when potential buyers are otherwise occupied enjoying their holidays – and a drop of just 1.3% is consistent with the movement there has been at this time of the year in the market during the past 10 years or so.

One in four landlords are prepared to sell up if the abolition of “no-fault” evictions goes ahead

A recent survey cited by IFA Magazine – the periodical for Independent Financial Advisers – on the 25^th of August revealed that only 22% of landlords were in favour of the proposals contained in the government’s latest White Paper for a “Fairer Private Rented Sector”.

Objections were voiced to two of the main objectives set out in the White Paper – namely, the abolition of Section 21 of the Housing Act (which grants landlords the right of so-called “no-fault” evictions) and the creation of a national register of landlords.

The abolition of Section 21, in particular, would make more than half (56%) of the landlords surveyed more careful about the types of tenants they accepted while as many as 25% would even consider selling up some or all of their let properties if no-fault evictions no longer provided a way of ejecting troublesome tenants.

Rising coastal house prices have outpaced rises in first-time buyer salaries

There is one group of hopeful homebuyers who have seen their dreams of living by the seaside dashed by rising prices, reported the Mail Online in its edition on the 24^th of August.

The newspaper spoke of the growing appeal of coastal locations for those who have been encouraged to move home during the recent pandemic. Those hopeful house hunters have included many first-time buyers who have now discovered that the cold reality of soaring prices has dashed their dreams.

Any salary increases first-time buyers might have recently enjoyed, explained the report, have been more than overtaken by the escalating prices of homes beside the seaside.

Buy to let property insurance (also known as landlord insurance) is cover specifically designed to protect the principal assets of a buy to let business.

The insurance recognises that anyone instantly becomes a landlord the moment they let their property, rent out rooms or areas of a home that they also continue to occupy, or only occasionally let their home during holiday peak periods on platforms such as Airbnb.

Most important of all, once you cross that boundary into letting your home, or any part of it, your insurance requirements automatically change too. It is no longer possible to rely on the owner-occupier home buildings and contents policy that previously offered you protection – you will need to get a fresh quote for specially formulated insurance for landlords.

How is let property insurance different from home insurance?

Insurance is all about the management of risk. And the fact is that those risks are different when you compare let property insurance with regular home insurance. The principal and most obvious distinction, of course, is that a let property is regarded as a business.

For example, common sense may tell you that, however responsible they may be, tenants may not be quite as quick as an owner-occupier to spot otherwise relatively minor maintenance issues before they become more serious problems.

In fact, landlord insurance provides more than just buildings and contents cover for rental properties – it safeguards against other potential threats to the buy to let business and there may also be extra elements of cover that form part of the policy or as an add-on.

What does landlord insurance cover?

Buy to let landlord insurance is typically an essential part of any landlord’s toolkit and recognises that:

• the property in question is a vital asset used to generate the income for your business;
• it was invariably an expensive asset to buy;
• if the asset is out of action for any reason whatsoever, then your income is likely to be zero.

Landlords’ insurance takes several forms and different insurance providers will offer various terms and conditions. If you’re looking for buy to let insurance, you’ll need to ensure that your property and the business in which it plays its part are fully covered along the following lines:

Buildings insurance

• the risks to the structure and fabric of the building itself are many and varied;
• typically, landlord insurance covers risks such as fire, flooding, storm damage, escape of water, impacts, vandalism, and theft – with some, but not all policies also covering the grave consequences of subsidence and heave;

Contents insurance

• your tenants will need to arrange their own insurance for their belongings and possessions, of course, but you might want to safeguard those possessions you own with the appropriate contents insurance;

Third-party liability

• when there are tenants in your property, you are responsible for ensuring their health and safety and may be held liable if they, one of their visitors, a neighbour, or even a member of the public suffers an injury or has their property damaged;
• if you are found to be liable, you may be ordered to pay substantial damages – especially if anyone has suffered an injury – or even death;
• landlord insurance, therefore, typically offers at least £2 million worth of cover to indemnify you against such third-party liability claims;

Cover for loss of rental income

• recognising that your business relies on the income you receive from tenants, buy to let insurance typically offers a degree of compensation for that loss of rental income if your let property becomes temporarily uninhabitable and unlettable following an insured incident;

Accidental damage cover

• when you are comparing buy to let insurance, you will notice that some policies include elements of protection (such as accidental damage or malicious damage by tenants, for example) as standard – others may offer the option to pay for these as optional extras or add-ons.

What doesn’t buy-to-let insurance cover?

Most landlord insurance policies are unlikely to include the employers’ liability insurance cover you are legally obliged to arrange if you employ anyone (but for a few rare exceptions) to help run your buy to let business.

As we touched on above – buy-to-let insurance policies may vary at the individual policy level too – with the terms, conditions, benefits, and features being slightly different to that offered by another landlord insurance provider. This includes any exclusions attached to the policy.

What happens if the property is unoccupied or being renovated?

Don’t forget that from time to time your let property might be unavoidably empty and unoccupied – between rentals, while it is being renovated, for any other number of reasons.

Insurers adopt different policies towards such empty property, which is typically regarded as unoccupied once no one has been living there for a period of more than 30-45 consecutive days (the exact interval varying from one insurer to another).

What that means is that to ensure you have the most comprehensive cover for your property, it may be essential to add unoccupied property insurance when the need arises. Failure to do so could invalidate your existing insurance arrangements – and may also breach an important condition of any mortgage that requires the property to remain adequately insured at all times.

Speak to your insurance provider

If you want to be confident that your let property and business interests are protected, it’s important to make quite clear to any prospective insurance provider that the dwelling will be let.

It’s equally important to inform your insurance company – and your mortgage provider – if you change the use of your property from owner-occupied to rental (whether in full or even part).

Failing to get this right may result in a future claim being rejected. Insurance companies do have methods of checking the actual occupancy status of a property in the event of a claim being made.

Buy to let landlords’ insurance – supplemented by unoccupied property insurance when required – could make your life a lot easier in the event of a crisis. So, making sure you have appropriate cover in place to protect your buy to let business is key.

Finally, it is important to note that if you have a mortgage on the property, your mortgage provider will typically require that you always have appropriate property insurance in place at all times, to protect both your financial interests in the property.