Two major reforms make the UK property news headlines as changes to the law on leaseholds come into force and the Bank of England relaxes the rules on stress testing the affordability of mortgages.

This is against the background of continuing vitality in the UK property market and tips on buying homes near schools rated as “Outstanding” and how to attract higher-rent tenants.

Leasehold changes take effect

On the 30^th of June, the long-awaited Leasehold Reform (Ground Rent) Act 2022 came into force. Announcing the changes, Propertymark reminded readers that from this date only a token, peppercorn ground rent can be legally charged by the freeholders of new leasehold residences in England and Wales.

The effect of the legislation is to reduce the ground rent on any new residential leases to zero financial value.

Mortgage affordability rules relaxed

Along with most of the media, the online listings website Zoopla on the 21^st of June reported the Bank of England’s decision to significantly ease the lending rules on residential mortgages with effect from the 1^st of August.

Currently, strict rules imposed by the Bank of England mean that mortgage borrowers have to pass a stress test under which they would continue to find their repayments affordable if the rate of borrowing increased by 3% of their lender’s standard variable rate.

That exacting standard has often caught out first-time buyers who are already at the limits of what they could find affordable – and a 3% increase would tip them over the edge. Relaxation of these rules, therefore, is likely to be especially welcome news to first-time buyers.

No sign of a slowdown for UK property market

If inflation and the steadily mounting cost of living are pressuring the spending of most individuals, those market forces have yet to have a serious impact on the UK property market.

In an article on the 23^rd of June, the Buy Association reported that the latest official figures showed little sign of any slowing down of the UK property market. Indeed, the property sales figures for May were a further 1.6% higher than in April.

Analysts point to the historically low rates of interest that mortgage borrowers continue to enjoy – with a current base rate of 1.25%, the cost of borrowing is significantly cheaper than the average 7% which prevailed throughout the period from 1970 to 2022.

This continues to fuel the growth in house prices – albeit at a somewhat slower rate month by month and lower than the runaway surge in prices seen in the previous six months.

The cheapest places to buy a home close to an Outstanding school

In research published on the 21^st of June, online listings website Zoopla revealed which parts of the country offered the most affordable housing if you want to live near a school rated as “Outstanding” by the education regulator Ofsted.

The research demonstrated how Ofsted’s ratings of nearby schools can affect the value of your home.

Watford, Wakefield, and Wolverhampton, for example, are places where you might find the cheapest homes close to a school rated as Outstanding; whereas you’d need to pay a premium to buy a home near any such school in Durham, Blackpool, or Sunderland.

How to attract higher rents

If you’ve ever wondered what it takes to attract higher rents to your buy to let accommodation, Property Wire offered some suggestions on the 21st of June.

Almost a half (42%) of discerning renters said that they were looking for accommodation that had been professionally decorated – and around a third of them insisted they would be prepared to pay more for such a rental. A similar proportion of prospective tenants also said they were looking for higher-quality furniture in any home they rented.

With the experience of recent Covid lockdowns still fresh in many minds, almost two in three would-be tenants are looking for space for working from home (WFH) – with, at the very least, a desk from which to do their work.

A property can become unoccupied or empty for several valid reasons:

• you are taking an extended holiday;
• as the landlord of let property, you may face a void between former tenants moving out and new ones being found;
• your job might have called you to work away from home – perhaps overseas – for several months at a time;
• the property might be in the throes of extensive renovation or other building works;
• if you are moving home, you might have moved into the new house whilst the old one remains empty pending its sale; or
• you may have an interest in a property that is subject to probate – which is currently unoccupied pending completion of that process.

Implications for your insurance

Whatever the reason for your house or let property standing empty, there is almost certain to be some impact on the home or landlord insurance which usually protects it.

If the property has been empty for more than 30-45 consecutive days, your current insurers typically reduce the scope of the cover on the property to just the basics of protection (the precise interval varies from one insurer to another), and some may even consider the cover to have lapsed altogether after this time.

Why is this?

There’s no doubt about it, vacant property attracts more than its fair share of risks and perils. In a special briefing for members of the Royal Institute of Chartered Surveyors (RICS), several principal areas of vulnerability were identified.

Those concerns can be summarised along the following lines:

• with no one on the premises, otherwise routine maintenance issues may go unnoticed and create a major crisis;
• there is a greater risk of a fire taking hold and potentially gutting the whole building;
• security is a bigger issue as the threat of theft puts at risk not only the contents of the property, but even valuable materials used in its construction;
• an empty property tends to become a magnet for vandals, arsonists, and all manner of other unwanted intruders; and
• the absence of any other occupant may attract the unwelcome attention of squatters.

As these and other risks assume greater and greater proportions the longer the premises remain unoccupied, so the property insurance cover normally in place becomes insufficient.

What does unoccupied property insurance cover?

To restore the cover needed to safeguard your property, therefore, specialist unoccupied property insurance is required.

This may take several forms.

Unoccupied property insurance sold by some providers, for example, may only restore still very limited cover – sometimes known as FLEA (protecting the building and its contents against the risks identified by their initials – fire, lightning, explosions and earthquakes, and aircraft).

Other options may include full protection against loss or damage to the structure and fabric of the building or its contents from such potentially severe risks as flooding, fire, storm damage, escape of water, impacts, vandalism and theft.

Also restored is the all-important property owner’s or landlord’s public liability insurance which grants you indemnity against claims from visitors to the property, neighbours or members of the public who may be injured through some contact with it or have their own property damaged.

You may even require short term empty property cover for shorter periods of time, such as if you have a probate policy or your property is undergoing renovations. Flexible options are available such as cover for 3, 6 or 9 months.

Which empty property insurance is the most suitable for me?

Getting the most suitable type of this standalone form of insurance to meet your needs and circumstances might call for specialist knowledge of the market in what is essentially something of a niche product. You might, therefore, want to consult experts in this field – such as those of us here at Cover4LetProperty.

Whatever the reasons – and there are many – for your having to leave the property empty, the vacancy frequently has a habit of overrunning your original estimate. Finding a policy that may be flexibly extended, therefore, may be an important feature.

If you are a landlord, one of the reasons for the property becoming vacant is the termination of one tenancy and the inevitable delay until new tenants are found.

There is also the rather special case of tenants who have simply abandoned the let property. Not only does this leave you an empty property on your hands but also the potentially fraught and complicated business of determining whether the tenant has surrendered or abandoned the property.

In an article updated on the 10^th of November 2021, online agents Letting a Property described the problems you run if tenants have simply upped and left your property – leaving the premises vulnerable and vacant, yet still with lawfully recognised tenants.

If you have bought an empty property with the specific intention of renovating it for you to live in or to let to tenants, you may find that some insurers are reluctant to offer cover on premises such as this from inception. Once again, therefore, you might want to consult a specialist insurance provider.

Playing your part

Just as with other forms of insurance, protection for unoccupied property also anticipates you playing your part to mitigate the risks of loss or damage.

The extent to which you may be expected to take reasonable precautions may depend of course on the nature of the building and whether it is normally in commercial or residential use. Amongst some of the most common conditions, however, are likely to be the following:

• ensuring that routine maintenance is done to keep the structure and fabric of the building in a good state of repair;
• locks, deadbolts, alarms and other security devices on doors and windows to a standard relevant to the type and size of building in question;
• regular inspections of the premises, with a written record of each visit;
• for residential property many of the precautions any insurer is likely to expect you to take are largely matters of good common sense;
• ensuring that deliveries are promptly taken inside and out of sight by a neighbour, for example;
• asking the same neighbour to park their car on your drive – to give the impression that there is someone at home;
• making sure that your garden continues to be tended and any litter cleared away;
• the use of time switches to turn on a light or two in the evenings; and
• making sure of course that all doors and windows remain firmly locked.

Precautions such as these – and any other conditions your insurer might impose – are important if you want to avoid the possibility of your own contributory negligence being cited by the insurer as the reason for a reduced settlement of any claim.

For further reading on this subject, you might want to review our Guide to Unoccupied Property.

Landlord insurance provides important safeguards for the owner of buy to let property. How does this protection work and what exactly are you buying with landlord insurance?

The building

• first and foremost, the most critical protection is provided for the very structure and fabric of the building or buildings in which you have invested – and that is probably the most important feature of landlord insurance;
• whether you are the landlord of buy to let residential property or the owner of commercial properties such as shops, warehousing, offices, or industrial units, all are vulnerable to such potential disasters as fire, flooding, impacts, storm damage or vandalism;
• landlord insurance buys you protection against such loss or damage, so you might want to make sure that you arrange it through a specialist provider – such as those of us at Cover4LetProperty – to get the protection most appropriate for your particular needs and circumstances;
• one of the crucial details it is always important to get right, for example, is the total sum insured – the amount designed to ensure that the settlement of any claim for the total loss of the building is enough to rebuild it;

The contents

• whether you have let the premises fully furnished, part furnished or with just a minimum of carpets, curtains and fittings, landlord insurance can buy you protection against those items of the contents of your let property that you own;
• you might want to extend the cover to accidental damage, and you may also want to investigate whether malicious damage by your tenants is included in the risks covered by your building and contents insurance (our policies here at Cover4LetProperty, for instance, include that cover as standard);

The liabilities

• with your insurance as a landlord, you are also able to gain valuable protection against the risk of a tenant – or indeed, one of their visitors, or even a member of the public – from suing you, as the landlord of the property, for negligence;
• many of your responsibilities as a landlord are defined by law and given legislative effect through health and safety legislation or local bylaws – the main aspects of these are identified on the government website;
• in addition to these statutory obligations, you also have a common law duty of care as the landlord and property owner;
• if you are held responsible for any personal injury or loss or damage to the property of your tenants, members of the public or visitors to your premises, you might face a potentially huge claim in compensation – landlord insurance typically buys you indemnity against such claims;
• the seriousness of the possible threat facing a landlord in this regard is illustrated by the fact that insurance typically offers protection of up to at least £2 million and it is not uncommon for that limit to be raised to £5 million or more;

The rent

• as a landlord, the success of your business relies upon the rent you receive – indeed, if you are depending on rental income to help make the regular buy to let mortgage repayments, rental income may be essential to your continued ownership of the property;
• yet if there is a major insured incident which leaves the premises so severely damaged that they cannot be occupied, you stand to lose the rental income – yet still have to make any mortgage repayments, of course;
• for that reason, landlord insurance typically includes compensation for loss of rental income in those circumstances.

It may be clear, therefore, that when you are arranging landlord insurance, you are buying some important safeguards for your let property and the business you are running.

If you have any questions or queries relating to your landlord insurance, please feel free to contact us. We will be more than happy to clarify.

Running a successful buy to let business almost certainly relies on the same basic guiding principle that determines the success of practically any other enterprise – delivering what the customer wants.

In the case of a landlord, of course, the customer is the existing or prospective tenant. The tenants’ expectations and aspirations regarding a let property may determine not only whether they are interested in moving in, but the respect with which they ultimately treat the property and the length of time they choose to maintain the tenancy.

Given the potentially critical importance of delivering just what the tenant wants, here at Cover4LetProperty we maintain a constant weather eye on the various surveys that are conducted from time to time about tenants’ current wish lists.

Let’s take a brief look, for example, at a survey published by property managers Landlord Vision on the 24^th of February 2022 and a similar study completed by the Letting a Property website on the 19^th of October 2021:

Location, location, location

• these are the eternal watchwords for any subject about property, and they apply just as much to let property – even if you can’t do much about it if you’ve already bought your buy to let investment, but make sure to give it a top priority if you’re going to buy;
• remember that your tenants won’t want to be too far away from local amenities, bus routes, shops, work, college, or university;

WFH

• post-pandemic, the top priority for many tenants is the ability to work from home (WFH);
• remote working is here to stay for many tenants who are in employment, and they are likely to be looking for more space inside their let accommodation in order to set up their home office;
• a separate working space is highly prized because very few of your tenants will want to sleep, relax, and work in the same space day after day;
• fast, reliable broadband speed will also be a must;

Outdoor space

• a further consequence of the successive lockdowns during the pandemic is a craving for your own outside space;
• tenants, too, these days are likely to be looking for a garden – or, indeed, any kind of recreational space outdoors;

Transport links

• although remote working is here to stay, many workers are being encouraged to return to work in the office – if only for a few days each week;
• dependable, fast, and affordable transport links, therefore, are likely to remain high on the list of priorities for your tenants;

Parking

• the availability of parking at or near to rented property was once very high on the list of priorities for prospective tenants but has now probably slipped down that list a notch or two;
• where parking is sought, it probably comes as no surprise that tenants prefer off-street parking to allocated on-street parking, although some surveys suggest that tenants are generally not prepared to pay a higher rent for access to off-street parking;

Rent levels

• according to the Office for National Statistics (ONS) private sector rents rose by an average of 2.3% in the 12 months to the end of February 2022;
• it will come as no surprise, therefore, that the cost of the rent will be a key factor for many tenants;
• although the dwindling availability of homes to rent suggests that this is a landlords’ market, if you want to attract responsible tenants who are going to treat your let property with the care it deserves and look forward to a lengthy tenancy, you will want to maintain rent levels close to the going rate for your type of dwelling and neighbourhood;

Age and sex

• most surveys of what tenants want from their let property reflect sightly different priorities according to the particular age group into which tenants fall and whether they are male or female.

Of course, there is no magic bullet that is going to ensure you will always let your property to the tenants you especially want. By taking into consideration these leading surveys of tenants’ expectations and aspirations, however, you may be better prepared to meet the market demand.

In the case of a landlord, of course, the customer is the existing or prospective tenant. The tenants’ expectations and aspirations regarding a let property may determine not only whether they are interested in moving in, but the respect with which they might treat the property and the length of time they choose to maintain the tenancy.

Given the potentially critical importance of delivering just what the tenant wants, we at Cover4LetProperty have conducted our own research into just what this might be:

Rent levels

• our latest data, compiled as recently as October 2014, for instance suggests that the price of the rent is the leading factor, being highlighted by a significant 87% of tenants who responded to our survey;

• this suggests that you pitch the rent you demand at as a reasonable price as possible – after taking into account your outgoing expenses such as mortgage repayments, maintenance and of course landlord insurance;

Location

• location has become something of a watchword when it comes to choosing a place to live – and renters appear to be no different;

• our research shows that an equally significant 80% of respondents gave the location of the let property – and its ease of access to bus routes, work and universities, for example – as a priority;

• a survey conducted by estate agents Savills also put location on tenants’ list of priorities and found that 55% of younger tenants (between 18 and 25 years of age) and 20% of over 45-year olds were prepared to pay a higher rent for being able to live closer to work or university;

Parking

• there is a similar convergence of research data when it comes to the provision of parking facilities;

• it may come as little surprise that in the survey conducted by Savills, tenants preferred off-street parking to allocated on-street parking, although it also revealed that tenants are generally not prepared to pay a higher rent for the access to off-street parking;

• this tends to confirm our own findings that there is no direct correlation between amenities and facilities and the level of rent that tenants are prepared to pay – some things may be expected to be supplied by the landlord effectively free of charge;

Tenant profiles

• the study conducted by Savills found that tenants tend to be renting for longer periods and that more of them are families, including children, than may have been the case a few years ago;

• this reflected accordingly in some of the things that today’s tenants may want – ease of access to childcare facilities and schools, for example, or somewhere outside, such as a garden, in which to play;

Age and sex

• both our own research and that conducted by Savills suggest some re-ordering of priorities according to particular the age group into which tenants fall and whether they are male or female.

Of course there is no magic bullet that is going to ensure you may always let your property to the tenants you especially want. By taking into account these leading surveys of tenants’ expectations and aspirations, however, you may be better prepared to meet the market demand.

It’s likely to be one of the stiffest challenges for any buy to let landlord these days – and in the years to come. And that is keeping up with the ever-changing and increasingly rigorous energy efficiency standards demanded by law of any property in the private rented sector.

So, let’s take a closer look at the Energy Performance Certificate (EPC) rules for rented property.

The law

Since October 2008, any private rented dwelling in England and Wales requires a valid Energy Performance Certificate (EPC). The certificate confirms the energy efficiency of your let property which is given a rating between A and G – where a G rating is the most inefficient and an A rating the most energy-efficient.

Subsequently, stricter Minimum Energy Efficiency Standards (MEES) came into force on the 1^st of April 2018, setting new standards by which any new tenancy starting after that date would have to have an EPC rating of at least an E rating. With effect from the 1^st of April 2020, every let property – new and existing tenancies – has been required to conform to the minimum E rating of the MEES.

The relevant legislation is the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019 and it is unlawful to let a property without the stipulated EPC rating. Different but similar legislation applies in Scotland and in Northern Ireland.

Exceptions

The government appears to have recognised the financial impact these energy efficiency standards may have on those landlords forced to upgrade older and less energy-efficient properties:

• once a landlord has spent £3,500 (including VAT) on any upgrade to a property, no further improvements need to be made, and you can apply for an exemption from further MEES enforcement; and

• if you can prove that the works necessary to improve the property’s energy efficiency will devalue or damage it, or if you have been unable to obtain the necessary third-party permissions (from sitting tenants or a freeholder, for example) you may again register an exemption.

Some Houses in Multiple Occupation (HMOs) – multi-occupancy dwellings where several households share basic facilities such as the kitchen, bathroom, and toilet – are exempt from the MEES standards, as are hostels. In all other cases, a certificate is required for each flat or house you might be letting.

Where an EPC is required, the certificate remains valid for 10 years and you must arrange a separate EPC for every let property you own.

On the horizon

But landlords are not yet done with the EPC challenge. At the end of 2020, the government held further consultations on the feasibility of rolling out stricter energy-efficiency standards still.

The upshot of that consultation exercise was a decision in principle by the government to strengthen the standards further through the requirement that all new tenancies created after 2025 would have to be in dwellings with an EPC rating of C or above.

That new standard would then be applied to all tenancies – including new and existing tenancies – by the year 2028. Although the current exemptions would continue to apply, the price cap on the cost of improvements is expected to be raised from £3,500 to £10,000.

The timeline for the introduction of these standards is incorporated in a Private Members Bill before Parliament that has been tabled by Lord Foster.

It remains to be seen, of course, during these times of escalating inflation, whether landlords will be able to afford the expense of still further energy-efficiency improvements.

Disclaimer: Please note that this information is based on the author’s current understanding of legislation and may be liable to change. Please always check with the relevant body if you require further guidance or confirmation.

As the property market begins to cool in the face of rising inflation the government releases new plans for extending the Right to Buy. Other UK property news reveals the latest coastal hotspots for affordable – and dry – places to live while some landlords are coming to the rescue of financially hard-pressed tenants.

PM announces new cost of living plan including extension of Right to Buy scheme

iNews on the 9^th of June carried reports about a recent speech in which Prime Minister Boris Johnson pledged support for more first-time buyers by extending the Right to Buy to housing association tenants (council house tenants are currently eligible to participate in Right to Buy schemes).

The Prime Minister also spoke about increasing the availability of low-deposit mortgages so that low-paid workers could also use any housing benefits included in their Universal Credit receipts to get a first step on the housing ladder.

The twin-pronged housing initiative was announced to a fanfare that it would “unbolt the door to ownership”.

Housing market shows signs of cooling, says Halifax

There are signs that the housing market – recently characterised by runaway price increases – seems to be cooling, according to a report by the BBC on the 8^th of June, citing figures compiled by the Halifax building society.

The average price of a home in the UK continued to climb throughout the month of May – taking the annual growth to 10.5% a – prices grew at their slowest rate in four months, although May still marked the eleventh consecutive month of increases.

In its report on the latest figures, the Halifax noted that the number of mortgage applications was beginning to fall as households faced the inflationary pressures of higher costs of living. This has reduced the demand from buyers and re-established a closer balance between supply and demand – so, also reducing the rate at which house prices will grow.

Best coastal towns and cities to relocate to in the UK – from cheapest to driest

The recent pandemic sparked a surge of interest in moving to live beside the seaside – and a story in the Express newspaper on the 7^th of June revealed some of the most popular choices, together with those with the driest and sunniest weather.

Ranking the coastal locations according to the affordability of homes there, together with the favourable climate, the Kentish resort of Sheerness on the Isle of Sheppey came out on top, with Shanklin on the Isle of Wight running a close second, while a second coastal town in Kent, Minster-on-sea, which is also on the Isle of Sheppey, came in third place overall.

Completing the top 5 coastal hotspots was yet another town in Kent, the port of Dover, and Holyhead on the Isle of Anglesey.

Landlords bail out struggling tenants

As inflation begins to take its toll and the cost of living plunges many private sector tenants into the danger of rent arrears, many landlords are coming to the rescue, explained a story in the Daily Mail on the 2^nd of June.

A recent survey of more than 700 landlords revealed that more than four in ten of them were helping their cash-strapped tenants by reducing the rent by up to £50 a month.

By coming to the rescue in this fashion, some of those landlords were allowing the rent reduction for as long as the next six months or more.

Despite many landlords leaping to the help of their tenants, 45% of those surveyed admitted that any rent reduction made them suffer financially, although 38% said they would maintain rents at the same level in the coming 12 months despite the difficult financial climate.

55% of those surveyed said that they would have to increase rents in the coming year.

With buy to let mortgage repayments to meet, maintaining your property in a good state of repair, and not to mention the search for dependable tenants who are going to pay their rent on time, you’re may not put insurance at the top of your list of priorities.

But insurance for landlords is a safeguard that might be overlooked at your peril – and here are just some of the reasons:

• calamities such as fire, floods and impacts may cause severe damage to the structure and fabric of your let property (and – in a worst-case scenario – the entire premises may need to be rebuilt);
• the contents of your let property may also be vulnerable to loss or damage – not least as a result of accidental or malicious damage by your tenants;
• allegations that you are the liable property owner for injuries or property damage suffered by third parties might run into the hundreds of thousands of pounds;
• a significant amount of rent may be lost if you are temporarily unable to let the property because of damage caused during an insured event; and
• legal expenses might quickly mount up if you need to challenge insurance claims or defend your property against other action in some way.

Insurance for landlords is the prudent way to safeguard your financial interests against such potential losses.

No ordinary homeowner

Even this brief list of potential perils suggests one of the key features of insurance for landlords – it is qualitatively different from the insurance arranged by owner-occupiers.

Certainly, there may be some similarity, owing to the simple fact that each type of insurance offers protection for the physical structure of the property, and of its owner’s contents, but the similarity ends more or less there.

The owner-occupier, of course, is intent on insuring the home in which he or she lives. The landlord is insuring a let property owned as a business.

The business use of any let property is a critical aspect of its insurance. The risks faced when you are running a business – and your property is, therefore, occupied by tenants – are of a quite different nature and order compared to those when it is your own residence, and you and your family yourselves are living there.

The difference is critical because it affects the risk taken on by your insurer. Where the risks are those of a let property and you have tenants in occupation, for instance, standard home building and contents insurance, such as that typically arranged by an owner-occupier, is inappropriate.

If that is the cover on which you are relying, any subsequent claim may be turned down by your insurer.

It is essential to ensure that you arrange the appropriate insurance for the type of property you own – regular home insurance if you are an owner-occupier, but landlord insurance if it is let property.

Where can I buy insurance for landlords?

As might have become clear, therefore, landlord insurance is something of a specialist, niche product. For such a product, it may be sensible to look to an experienced, specialist insurance provider – such as ourselves here at Cover4LetProperty – to secure the particular cover you require as a landlord.

Whilst it is simple and straightforward to arrange for an insurance quote online, insurance for landlords may need to be tailored to the specific circumstances of the individual landlord.

In that case, you might want to give us a call on our direct, dedicated helpline – which is completely free of any of the annoyances you might encounter when using a call centre. We’d be very happy to help!

It is a safeguard you may be overlooking at your peril:

• calamities such as fire, floods and impacts may cause severe damage to the structure and fabric of your let property (to the point even that it needs to be totally re-built);

• your contents of the let property may also be vulnerable to loss or damage – not least as a result of accidental or malicious damage by your tenants;

• claims against your liabilities as the property owner might run into the hundreds of thousands of pounds;

• a significant amount of rent may be lost if you are temporarily unable to let the property because of damage caused by one of the insured events; and

• legal expenses might quickly mount up if you need to challenge insurance claims or defend your property against other action in some way.

No ordinary home owner

Even this short list of potential perils suggests one of the key features of insurance for landlords – it is qualitatively different from the insurance arranged by owner occupiers. Certainly, there may be some similarity in the fact that each type of insurance offers protection for the physical structure of the property, and of its owner’s contents, but the similarity ends more or less there.

The owner occupier, of course, is intent on insuring the home in which he or she lives. The landlord is insuring a let property owned as a business.

According to the Telegraph newspaper (April 2015), there are some 2 million such landlords in business in Britain at the moment – and their economic contribution is probably not given the political support it deserves, says the paper’s correspondent.

The business use of the let property is a critical aspect of its insurance. The risks faced when you are running a business and your property if occupied by tenants are of a quite different nature and order compared to those when it is your own residence and you are living there yourself.

The difference is critical because it affects the risk taken on by your insurer. Where the risks are those of a let property and you have tenants in occupation, for instance, standard home building and contents insurance as might be arranged by an owner occupier is inappropriate and if this is the cover on which you are relying any claim may be turned down by your insurer.

Where can I buy it?

It may be apparent, therefore, that landlord insurance is something of a specialist, niche product. For such a product, it may be sensible to look to an experienced, specialist insurance provider – such as us here at Cover4LetProperty – to secure the particular cover you require as a landlord.

Whilst it is simple and straight forward to arrange for an insurance quote online, insurance for landlords frequently needs to be tailored to the specific circumstances of the individual landlord. In that case, you might want to give us a call on our direct, dedicated helpline – which is completely free of any of the annoyances you might encounter when using a call centre.

With particular aspects of the cover tailored to suit your specific needs, the insurance then typically provides protection for the physical structure and fabric of your let property, any contents within it that you own (if you have elected for landlords’ contents cover), indemnity against claims arising from your liabilities as a landlord or property owner, and compensation (up to prescribed limits) for any loss of rental income following an insured event.

The role of a buy to let landlord is becoming ever more difficult and financial success is by no means assured. Working with a letting agent might ease some of the many – and increasing – responsibilities you have to take on so that you are released to concentrate on what will really make your business thrive.

Let’s take a closer look at some of the issues.

What you’re up against

Speak to any buy to let landlord and you are likely to discover just how much effort goes into running the business:

• from the very outset – as soon as you begin advertising the let;
• finding suitable tenants;
• conducting reference checks;
• collecting deposits and arranging their formal safekeeping – in accordance with the relevant deposit protection scheme;
• drafting, agreeing, and signing tenancy agreements;
• drawing up and conducting inventories;
• arranging annual inspections for the safety of gas and electrical installations;
• arranging for ongoing repairs and maintenance throughout the tenancy;
• ensuring that rent is paid on time;
• answering all manner of enquiries from the tenant;
• conducting a further inventory at the end of the tenancy;
• agreeing to the terms for the return of any deposit; and then
• starting the whole process over again for the next tenancy.

Little wonder, therefore, that being a landlord can become more than a full-time job. If you want some of that pressure to be taken off your shoulders, you might consider turning to letting agencies. Why? What do they do?

The role of the letting agent

Depending on the specific contract of agreement for letting agency services, landlords typically request help on one of two levels.

Tenancy matters

Probably the most usual form of agreement sees the landlord handing over to the letting agent responsibility for every aspect of advertising and selecting tenants and taking up references for suitable candidates.

The letting agent is typically then also responsible for drawing up the tenancy agreement, arranging receipt of the deposit, conducting an inventory, collecting the rent, and generally maintaining a channel of first communication with the tenant throughout the tenancy. The letting agent will then conduct the final inventory and arrange the return of the appropriate share of any deposit originally received.

The task of checking and vetting tenants is already quite onerous. The validity of your landlord insurance policy may depend on that vetting to have been done rigorously and the law imposes a further onerous responsibility – the so-called Right to Rent obligations.

The Immigration Act of 2014 included provisions referring to the Right to Rent and the obligation imposed on landlords of private rented property to establish and confirm the immigration status of any prospective tenant and members of their household.

But this, too, is one of the landlord’s duties and responsibilities that may be signed over in an agreement in writing between the landlord and the letting agent instructed by him. Letting agents may need to check and inspect the original documents identifying not only the prospective tenant but also of any other individual planning to live on the let premises and to keep copies of those documents as a record.

Following the Covid outbreak, the government introduced measures to allow these checks to be made entirely online. Those simplified arrangements are scheduled for review at the end of September 2022.

Full-service property management

In addition to the responsibility for managing every aspect of your relationship with the tenants, you may also instruct letting agents to take on wider property management responsibilities, including the responsibility for ensuring that the property is adequately and regularly maintained and that repairs are carried out as and when necessary.

Who pays?

This is another area in which the law is explicit. The Tenant Fees Act came into force on the 1^st of June 2019.

As the housing charity Shelter explained in guidance published on the 23^rd of February 2022, the provisions of the Act make it an offence for landlords or letting agents to charge tenants fees for services such as taking up references, making credit or Right to Rent checks, administration of the tenancy, or for renewing a tenancy when it reaches its agreed term.

In other words, if you decide to instruct letting agents to take care of all your tenancy matters or on a full-service property management basis, you will need to accept responsibility for meeting the agent’s fees and charges – they cannot be charged to the tenant, and you may face stiff financial penalties if you attempt to do so.

Summary

Only you can decide whether you wish to hand over some of your responsibilities as landlord to a letting agent. We hope this blog has given you some food for thought.

Further reading: Guide to choosing a letting agent.

A healthy landlord-tenant relationship is one based on mutual respect and trust. Your tenants expect you to maintain the property, keeping it safe and free from health hazards. You can expect your tenants to treat the place with the care and respect it deserves. That means your tenants playing their part in preventing household problems.

What you can expect from your tenants

In guidance published on the 7^th of April 2022, the National Residential Landlords Association (NRLA) reminded landlords that tenants have an obligation to behave in a “tenant like” way.

That’s quite a vague formulation but Citizens Advice explains that it means tenants should be held generally responsible for:

• doing minor repairs – like changing light bulbs and fuses;

• keeping the accommodation clean and tidy;

• not causing damage to the property – or allowing their visitors to do so; and

• using the facilities sensibly – avoiding blockages by trying to flush something unsuitable down the toilet, for instance.

While these examples may also be open to interpretation, the following might help to flesh out the issues.

Electrical safety checks

Landlords in England are obliged to have the electrical installation in any let property checked and tested when a tenancy begins and at least once every five years thereafter.

But the onus is on tenants to report any electrical failure or fault to the landlord, grant the necessary access to allow the inspection, and maintain their own electrical appliances in safe working order.

Gardens and drainage

If the let property has a garden for the tenants’ use, the tenancy agreement will spell out responsibilities for its upkeep and maintenance.

As the landlord, you remain responsible for the external condition of the property but can reasonably expect your tenants to exercise care to ensure that debris from the garden – fallen leaves, for example – does not block or clog the drains.

Central heating and hot water

Maintaining your let property in a good state of repair and fit for habitation typically means providing some form of heating – especially for the provision of hot water.

If there is a failure of the central heating boiler or other means of providing hot water, you should be able to rely on your tenants to let you know as soon as possible – and it then becomes your responsibility to fix or repair any problems that are found.

Don’t forget that landlords are legally required to have all gas appliances and installations checked annually.

Loft space

The loft space in a let property might be something of a grey area. It is not part of the living space but may still be let as part of the tenancy.

Dacorum Borough Council (in northwest Hertfordshire) has published useful guidance on the use of the loft space in its council houses – and the same principles typically extend to homes with lofts in the private rented sector.

The guidance explains that if tenants have access to a loft, they can use it to store lightweight items only. They must not store items directly onto loft insulation or the plasterboard of ceilings and will be held responsible for any damage caused by going into the loft – if they step on un-boarded plasterboard and put a foot through the ceiling, for example.

Mutual confidence

Just as your tenants have the right to expect you to keep to your obligations as a landlord, so you might also rely on your tenants to play their part – that is the way to establishing a relationship based on mutual trust and confidence.

After many months of runaway increases in the price of the average home, the leading headlines making present property news all point to a marked slowing down of a market impacted by the rising cost of living.

Other UK property news stories feature a renewed push to extend Right to Buy legislation, a peculiarly British fascination with the humble beach hut, and the size of the deposit currently required by the first-time buyer.

UK house price growth slows as cost of living crisis starts to hit market

Although April marked the ninth consecutive month of increases in the average house price in the UK, that growth is beginning to slow, according to a story in the Guardian newspaper on the 29^th of April.

The increase for the month was a modest 0.3% – taking the overall average across the UK to a record £267,620. This was the smallest monthly increase since September last year and compared with the 1.1% increase in March.

House prices are now up by 12.1% on the year – reflecting a decline from the annual figure of 14.3% recorded in March. The spate of increases also reflected a surge in demand from house hunters eager to find bigger homes and gardens yet the market’s failure to supply sufficient properties to meet that demand.

As inflation, the rising cost of living, and more expensive mortgages begin to impact household budgets, house prices appear to be growing less quickly.

Government considers giving more tenants the Right to Buy

First introduced by Margaret Thatcher for council tenants more than 40 years ago, the present government is now considering extending the Right to Buy to all tenants, including those in the private rented sector, according to Landlord Today on the 3^rd of May.

As a first step, the extended scheme would see a Right to Buy extended to housing association tenants – currently some 2.5 million households.

An alternative idea under consideration by the government is to encourage recipients of Universal Credit benefit payments to use that money to secure a mortgage on a home of their own.

Beach hut owners in Essex town under fire for ‘customising’ their luxury wooden sheds 

Britain’s peculiar love affair with the humble beach hut might have hit the rocks if a story in the Daily Mail on the 2^nd of May is anything to go by.

The story recounts criticism and threats by the council to withdraw beach hut licences if owners at Frinton-on-Sea, in Essex, fail to abide by the rules governing the “improvement” or “customisation” of their huts.

Some owners have been found to have extended their beach hut, added a veranda, or built a patio alongside – all without the required authorisation by the local council. The council also reserves the right to determine exactly what colour any beach hut is painted.

By flouting the council’s rules, owners have been warned that they could face losing their licence to occupy the beach hut – and with it, the loss of the potential £80,000 premium for which those licences currently change hands.

First-time buyer deposits soar more than 50% in a decade

The average first-time buyer needs to find a deposit of £45,569 research by the online listings website Zoopla reports on the 26^th of April.

This represents an increase of a staggering 54% on the £23,625 which was the average first-time buyer’s deposit just ten years ago.

It is not only the absolute value of the deposit that has increased but also its percentage of the total purchase price of a home. Ten years ago, first-time buyers put down an average of 17% of the home’s purchase price as a deposit. Today, that percentage is 20%.