In making the most of your let property, you are following the same principles as making the most of any business asset – on the one hand ensuring that the asset contributes its utmost to the profits of your enterprise and, on the other, safeguarding that asset against potential loss or damage.

Profitability is one dimension, therefore, and appropriate buy to let insurance is the other. So, let’s take a look at these twin dimensions.

Profitability

Maintaining the profitability of your buy to let business is not always easy. As a general rule, it involves a careful balancing act between the income you receive from rents and your expenditure on essential running costs, such as repairs and maintenance, letting agents’ and other professional fees, and insurance.

While rental income boosts your bottom line, expenses inevitably undermine it. The balance is delicate yet critical – in some of the following ways:

• nothing undermines your buy to let business more or undercuts your profitability than the expense of rental arrears – and any resulting eviction procedures. So, make sure from the outset that you take all necessary steps to try and identify potential problem tenants during the selection process, in advance, during your interviews and when taking up their references;
• consider using a property management agency. Although letting agency fees inevitably add to your operating costs, the appointment of agents might result in increased overall efficiency and help to achieve cost savings. Do your maths carefully though. You can read our Guide to choosing a letting agent for more information;
• if you are furnishing your let property, beware of fragile items or those that are known to deteriorate rapidly, if only through normal wear and tear. You can’t automatically blame your tenants for problems in this area and assume that they will pay up;
• make a point of regularly reviewing the costs of any utilities and services you are paying for – such as telecoms providers, internet service providers, electricity companies and so on;
• for regular repairs and maintenance, consider a service contract with a local builder. Of course, you may be able to do a lot yourself on a DIY basis but having an established relationship with a reliable builder might be a lot more cost-effective than ringing around trying to find one at random in an emergency;
• employ a good accountant. Your informal business status might lead you to believe that there is little work needing the formal input of an accountant. Nevertheless, a reliable, professionally-qualified accountant might be able to save you significant amounts of money on your taxes and other expenses each year;
• speak to your bank about setting up a business account exclusively for your buy to let business. Make sure you compare what they are offering you in terms of facilities and prices, against those of the competition;
• don’t ignore out of pocket or miscellaneous expenditure. Spending a few pounds here and there without taking the expenditure into account in overall business terms can be a serious mistake, as these seemingly small items can mount up to serious totals throughout the year as a whole.

One of the most critical items of recurring expenditure is the annual renewal of your landlord insurance policy. The business security given by adequate and appropriate landlord insurance cannot be overemphasised. You will not want to overlook it – and that is why we are devoting the whole of the following section to finding suitable insurance cover for your let property.

How to find suitable cover for your let property

At Cover4LetProperty, we’re committed to helping you find suitable cover for your property. Here are a few things we believe that you might wish to think about in advance of starting your search.

Who are you letting to today? Or who may you let to in future?

This is pertinent because some landlord insurance companies exclude cover for certain categories of tenant, such as students, the unemployed or welfare benefits claimants.

This may become less of a problem in future following a court ruling on the 1^st of July 2020. A decision in York County Court found that a landlord had discriminated against a prospective tenant – on the grounds of the tenant’s disability – and ruled that such discrimination is unlawful, explained the housing charity Shelter on the 14^th of July.

In the meantime, however, you may rest assured that none of the landlord insurance policies arranged here at Cover4LetProperty includes any such exclusions against any class of tenant.

Is your property a house or a flat in a multi-occupied building?

If your let property is a House in Multiple Occupation (HMO), remember that there are landlord insurance policies specifically designed for cover in such circumstances.

Are you letting furnished or unfurnished?

The answer to that question, of course, is likely to determine the importance you attach to the inclusion of contents insurance in your buy to let insurance policy and, if so, the total value of the contents insured – in addition to the total building sum insured.

Do you have burglar alarms and additional locks?

If you are able to increase the security precautions around your property, you may find that some policies will offer you discounts on your premium in recognition of the fact you are reducing the risks to the insurance provider.

Do you have high-value items for inclusion in your contents cover?

If you do have, some policies may not cover them at all. Examples of excluded items of high value might include jewellery, works of art, collectables, computers, hi-fi equipment, or antique furnishings.

Other policies may have strict maximum values for items covered and policies, in general, may have overall ceilings on the maximum settlement sums available.

It is important that the type and levels of cover selected are commensurate with the nature of your contents.

Are things such as subsidence cover important to you?

If you believe your property might be at risk of subsidence, this is likely to influence your search for landlord insurance because such cover is no longer automatically included, as standard, in all landlord insurance policies.

You may be reassured by the fact, therefore, that all the buy to let insurance policies arranged here at Cover4LetProperty include subsidence cover as standard for all properties built after 1849 (up to set limits – which are detailed in your policy documents).

Summary

We hope this brief article has given you some ideas on how to make the most of your let property while ensuring it is properly protected. We have lots of useful guides and information on our website for landlords – and not just about insurance – so why not have a coffee and browse our website for more information and advice?

What a year 2020 was! Yet, the property market has not only survived but also continued to prosper.

As we saw things through to the end of the year, here are some of the news headlines that caught our attention.

Gas boilers could become an issue for landlords

Do you maintain a gas boiler in your let property? Gas-fired boilers for hot water or central heating are especially popular among landlords but have also become the focus of mounting concern, according to a story published by Landlord Today in December.

The article recounted advice given to government by the independent Committee on Climate Change which urged a ban on the sale of gas boilers after the year 2033 – in just 12 years’ time. Furthermore, said the Committee, the generation of all electricity needs to be carbon-zero by 2035 if the government is to achieve its target of net zero emissions by 2050.

Any ban on the sale of gas boilers, of course, would be part of the overall strategy of moving towards cleaner energy.

It is only 18 months ago that the government promised to make it illegal to install gas boilers in any newly-built home after 2025. This would be achieved by introducing a new “future homes standard” stipulating that all new residential buildings have to be heated through low-carbon devices – such as electric heat pumps.

What will happen in 2021 to house prices?

Anyone who can accurately predict future markets is likely to make themselves rich indeed. Our closest estimates are instead usually based on current trends and the forecasts of informed market analysts.

In its story on the 23^rd of December, the Express newspaper turned to just such trends in an attempt to forecast the movement of house prices in 2021.

The overall picture seems to be one of uncertainty. Currently, for example, the property market continues to ride the wave of the revival that followed the lifting of the first national lockdown. With the release of the previously pent-up demand, prices began to rise, and that buoyancy was further encouraged by the Chancellor’s introduction of a Stamp Duty holiday.

As the New Year wears on, however, the tax holiday will expire at the end of March, furlough schemes will come to their natural conclusion, and unemployment may begin to rise. These are all factors likely to herald a fall in house prices.

Building society, the Halifax, for instance, forecasts a fall of between 2% and 5% – with the extreme end of that scale seeing the average house price drop by some £12,660.

The CEO of a property group cited by the Express newspaper, nevertheless predicted that house prices would bounce back again towards the latter part of 2021.

Taking the year as a whole, therefore, the fortunes seem to be mixed – falling from a current high, dropping by anywhere between 2% and 5%, before picking up once again in the second half of the year.

Help demanded for landlords to meet energy targets

Although it broadly supports the government’s aims of improving the energy efficiency of the whole housing stock, the National Residential Landlords’ Association (NRLA) has called for publicly-funded support for landlords to help realise those aims.

In a press release on the 22^nd of December, the NRLA argued that landlords – especially those owning older properties in so-called post-industrial regions of the country – could face the biggest challenges and the heaviest financial burdens.

The government has already announced a target of increasing the minimum energy efficiency rating in let property to band C by the year 2025. Yet reducing carbon emissions and improving the energy efficiency of older property is invariably more expensive.

Although the government has mooted increasing the cap on the maximum expenditure covered by the Green Homes Grants scheme from the present £3,500 to £10,000. The NRLA has asked for an explanation about how the new figure was determined and for an indication of further financial support for landlords.

If you are thinking of joining the ranks of the UK’s more than 2.6 million private sector landlords, there is probably quite a lot you will have to learn.

The following tips are designed to help you get started and are followed by a quick checklist of who you will need to notify once you have taken up your role as a landlord. We then conclude by reviewing some of the most frequently asked questions (FAQs) we receive here at Cover4LetProperty on the role of a landlord.

Top ten tips for new landlords

Unfortunately, it’s not likely to be as easy as popping an advert in the local paper and waiting for your first tenants to arrive. You will need to work hard at achieving – at a bare minimum – the following steps as a new landlord:

1. identify your target market – who do you envisage letting property to? Tenants come in all shapes and sizes, each bringing their own considerations and requirements;
2. find the right property – different types of tenant may be looking for quite different types of property. The type of property that will attract a family with younger children, for example, may not appeal to a childless couple, a group of professionals sharing, or a group of students;
3. meet your responsibilities and obligations for the health and safety of your tenants – for instance, all gas appliances such as a central heating boiler, water heater, fire or cooker must be checked and certified safe by a Gas Safe registered engineer at the beginning of any tenancy and at least once a year thereafter. Our Landlord Legislation Guide explains this further;
4. there are additional statutory safety requirements – so, remember that if you are intending to let on a furnished basis, then items of furniture and soft furnishings may have to conform to fire regulations and standards. You can read our more in-depth Landlords Guide to Health & Safety for further advice;
5. make the right impression – in a competitive market, making a good first impression may be key to letting success. Having a well presented and well maintained property, both inside and out, may be critical to attracting potential tenants and might also be important in helping you achieve your anticipated rental income;
6. keep the relevant authorities and people informed – if you have a mortgage on your property then you may obviously need to ensure that your lenders are happy with your plans to let it out. If you have a standard residential mortgage – suitable for an owner-occupier – you may typically need to remortgage, by arranging a specialist buy to let mortgage;
7. tenants have rights – as a landlord you may have a number of obligations to keep your property well maintained and to an acceptable standard. Don’t underestimate the ongoing costs this may involve for you;
8. carefully consider the levels of landlord insurance that you may need to protect your investment. Your mortgage lender, for one, is likely to insist that you have at least buildings cover as part of your lending agreement. This may protect your bricks and mortar from events such as floods, fires, earthquakes, damage from falling trees and branches and vandalism, and the like. These days policies may not always include subsidence cover as standard (though ours do!) so you will need to consider exactly what cover is offered when choosing your policy;
9. if letting on a furnished basis, you may wish to carefully calculate the value of your belongings and then decide whether or not to insure them on a new for old basis; and
10.  bear in mind that while insurance for your property is another call on your resources, there may be ways you can help influence the level of your premiums. If you agree to take a higher excess on the policy, for example, you may find that premiums might be reduced slightly.

Who to notify when becoming a landlord

In the United Kingdom many businesses are comparatively lightly regulated, and you may not need much in the way of formal permission before commencing activities. There are a limited number of exceptions though and, depending on your interpretation, becoming a landlord may be one such.

Following up on point no. 6 above, therefore, the following are some of the parties you may need to notify before you can start to let out your property.

Your mortgage provider

If you are planning to let property that you have previously occupied as your own home and it still has an owner occupier mortgage on it, the conditions of the loan oblige you to discuss your plans for change of use, in advance, with the mortgage provider. As we have mentioned, you may even need to remortgage the property to reflect its change of use.

Of course, if you have a specific buy to let mortgage on the property that may not be necessary.

Any co-owner

If you plan to start letting out property that has not been let previously and it is not solely owned by you, you should seek the written permission of any other co-owners of the property concerned.

Your insurance provider

A property that has previously been occupied by the owner is likely to have owner occupier buildings and contents insurance in place.

Typically, that cover will become invalid once you start to let the property and you will need to switch to purpose-designed landlord’s or buy to let insurance to maintain the protection you continue to need – both for the premises and your new property rental business.

We will gladly provide further assistance or help answer any questions you may have regarding your buy to let insurance.

The freehold owner

This is one that is sometimes overlooked with potentially serious consequences.

If you are the owner of the leasehold, then you may need the freehold owner’s permission in writing before you start letting out the property.

The local council and other authorities

In some circumstances, you may need the permission of the local authority in which the let property is situated and this may involve some form of registration and licensing before you start letting out a property to certain types of tenants.

Examples might include any House in Multiple Occupation (HMO) or those occasions when your tenants are considered vulnerable individuals or the elderly.

Remember that the laws in England, Scotland, Wales, and Northern Ireland may differ in these respects.

Various service providers

Some supply contracts for utilities such as gas and electricity may specifically exclude you assigning them to tenants.

It might be worth discussing this with the companies concerned, in advance.

Neighbours

Although there may be no precise contractual or legal requirement to do so, if you are planning to start letting out a property for the first time, it might be prudent to consult the immediate neighbours in advance.

Although their legal permission may not be required, objections and subsequent legal actions may prove to be expensive and distracting for you – particularly if you lose and are forced to change your business direction as a result.

Being a landlord – your questions answered

After all of that, if you still have some unanswered FAQs, the following may help – but remember that we are not in any way attempting to offer formally qualified legal advice.

Do I need a formal qualification to be a landlord?

No. Unlike professions such as a doctor or lawyer, a landlord does not need to be formally certified before starting to engage in the business of letting property and calling themselves a landlord.

However, there are a range of legal requirements that may apply to the way you conduct your business, and it would be highly advisable to ensure that you are clear what these are before you commence your business operations.

If you plan to let a House in Multiple Occupation (HMO), the licensing conditions require that you are a “fit and proper person” to act as such a landlord.

Can I select the tenants I wish?

Typically, the answer is yes – though it is highly recommended, of course, that you are carefully selective in the sense that you have taken all reasonable steps to check that your tenants are likely to prove trustworthy.

Note that some forms of landlord insurance may exclude certain categories of tenant (students or welfare benefits claimants, for example) and it might be important to be clear that your target tenants are covered by your insurance. None of the landlord insurance policies arranged by us here at Cover4LetProperty contain any such exclusions.

Why do I need special landlord cover insurance?

Insurance is about the management of risk – and the simple fact is that a home occupied by tenants rather than owner-occupiers is exposed to qualitatively different risks.

For the landlord, a let property is essentially a business asset – relying on a stream of income generated by rents – and at the core of any landlord insurance policy is the protection of that physical asset against the possibility of loss or damage.

But there are financial and business risks too. Landlord insurance also needs to incorporate indemnity against potential charges of landlord liability, if a tenant, one of their visitors, a neighbour, or even a member of the public, is injured or suffers damage to their property.

Landlord insurance may also recognise a further business risk – the loss of rental income in the event of an insured incident which leaves the premises temporarily uninhabitable and unlettable. A degree of financial compensation for such loss of rental income is, therefore, typically included in landlord insurance policies.

Can I charge whatever rent I wish?

This is a complex question. In practice, the rent you charge, and any increases you make, may be subject to appeal and testing through legal processes (unless you are a resident landlord letting out rooms in your own property).

Space here does not permit a full discussion but suffice it to say that you should research this area thoroughly before deciding on your rental levels – quite apart from the purely practical consideration that if you charge an unrealistically high rent, you are unlikely to receive any applications from potential tenants.

Despite stiff competition from other headlines clamouring for space – on the beginning of the Covid vaccination programme and the final instalments of Brexit, to name but two – property, as always, continues to make the news.

Here are just a few of the stories which stole some of the spotlight.

Sales of sound insulation soar during lockdown

Among the surprising winners to emerge from the successive rounds of Covid lockdown have been the manufacturers and retailers of sound insulation – sales have rocketed recently.

That unexpected trend was revealed in an article by Property Wire last month. Householders’ sudden yearning for sound-proofing the rooms in their homes is an apparent reaction to some of the intrusive and unsettling sounds coming from noisy neighbours, suggested the article.

One manufacturer of sound insulating materials reported that sales had shot up by 240% so far this year as households all over the country were complaining that they had not been able to enjoy anything like their normal hours of sleep.

The manufacturer explained that in normal, pre-pandemic times, his principal clients for sound insulation material were recording studios or home-based rock musicians looking to deaden the noise after converting a spare room or the garage into a practice area. Now, though, the enquiries are pouring in from those claiming to have especially noisy neighbours.

Landlords publish new deal for rented housing

Landlords’ pressure groups are pushing back against government plans to make life easier for tenants by abolishing Section 21 of the Housing Act, 1988 – allowing so-called “no-fault” evictions by landlords.

In a press release on the 2^nd of December the National Residential Landlords’ Association (NRLA) explained that the new deal sought by their members was intended to promote the creation of a special landlord-tenant conciliation service which would swing into action if tenants contested certain attempts at eviction by their landlords.

In this its contribution to the debate about the Renters’ Reform Bill, the NRLA goes along with a need for reform of the rights of repossession but insists that the processes must be fair to both landlord and tenant. The reasons for a landlord being able to regain possession of his property, for instance, should include the tenant’s failure to pay the rent when it falls due, anti-social behaviour on the part of the tenant, or the landlord’s desire for repossession in order to sell the property.

In its feature article on the Renters’ Reform Bill on the 31^st of October, Estate Agent Today confirmed that one of the central planks of the proposed reforms was the abolition of Section 21 evictions. But the proposals also include doing away with individual security deposits and replacing them with a once in a lifetime deposit that tenants could transfer from one property to another.

The Bill would also open up to public scrutiny – including letting agents, tenants, landlords, employers, and professional bodies – the government’s information base identifying so-called “rogue” landlords and agents.

House price growth increases to five-year high of 6.5%

Yet further evidence of a burgeoning housing market was evidenced by a 6.5% growth in prices recorded for November, according to Property Wire last week.

Higher than the 5.8% rise the previous month, November’s 6.5% increase is the steepest leap in building society Nationwide’s House Price Index since January 2015.

A note of warning was also sounded to would-be and hopeful buyers. The current buoyancy of the housing market has been shored up by the tax holiday on Stamp Duty, which is scheduled to end this coming March.

Some buyers may already be too late to enjoy the benefits of that holiday, however, since swollen demand is causing delays in completing transactions that now might not be concluded until after the tax-break ends.

Getting the most suitable and cost-effective landlord insurance for your own unique circumstances is obviously important. Here we discuss some of the things you need to know when getting let property insurance.

Firstly, not all buy to let insurance policies are the same or do the same job. You need to be sure that the one you opt for is the one that matches your needs, requirements and budget.

The different types and variations of landlord insurance may appear to complicate matters somewhat. But since they are all that may stand between you and serious financial losses of one of your major assets, it may be advisable to ensure that you are fully familiar with them – and all the related issues that may arise.

What landlord insurance covers

Although individual policies may vary – sometimes quite considerably – in the detail, the majority are based on a few common headings of risk:

Building insurance

• this is a conventional and typically well-understood form of cover, which is designed to protect the structure and fabric of the building, its fixtures and its fittings against loss or damage – from a wide range of common perils such as fire, flooding, storm damage, escape of water, impacts, vandalism and theft;

Contents insurance

• this may not be strictly necessary if you are letting out your property on an unfurnished basis but if it is furnished, this cover may be essential if your movable property is to be fully protected;
• note that different policies may apply different definitions of what is a fixture and what is movable content – so, if you decide to skip on landlords contents cover, it might be wise to be clear that you understand that what you consider to be fixings and fixtures is the same as your policy’s definition;

Landlord liability insurance

• if a tenant, one of their visitors, a neighbour, or even a member of the public is injured or has their property damaged through some connection with your let property, you may be held liable and sued for compensation;
• this heading of cover grants you indemnity against such claims;
• because the claims have the potential for assuming substantial proportions – especially if physical injuries are concerned – the amount of cover is typically a minimum of £1 million, but here at Cover4LetProperty we offer cover for claims of up to £2 million as standard (with the option of increasing this to £5 million, if required);

Compensation for loss of rental income

• your let property is at the heart of a business – a business which relies on the stream of income generated by the rents you charge;
• if a serious insured event occurs, however, the premises may become temporarily uninhabitable – and unlettable – pending repairs and reinstatement, with the result that your normal income stream is disrupted;
• your landlord insurance policy may provide financial compensation – up to prescribed limits – for this loss of rental income;

Subsidence

• in the past you may have found that subsidence cover was included pretty much, as standard, as part of buildings cover but that these days it may not always be the case – here at Cover4LetProperty, however, we continue to include cover against the risks of building subsidence as standard in the policies we arrange;

Malicious damage

• while most tenants may take good care of your building and its contents, there may occasionally be some who do not – so, a policy which offers cover for malicious damage by tenants, may offer you the peace of mind of being covered financially in such a situation and those we arrange here at Cover4LetProperty do just that;

Unoccupied property insurance

• this is typically a separate, standalone form of insurance cover that may be required in situations where your property is going to stand empty and unoccupied for a while;
• you may hope to have 100% occupancy of your buy to let property but there will always be times though where this is just not possible – perhaps you are carrying out redecoration or refurbishment. Or, you may be experiencing difficulties in finding new tenants, or they are delayed moving in;
• in these situations, if your property is empty for 30 to 45 consecutive days or longer (the exact period depending on your insurer) then you may need to consider unoccupied property insurance, which provides protection for the risks that are more prevalent in an empty property – for example, minor problems going unnoticed and causing major damage, or unlit windows and an increasingly untidy garden attracting thieves or vandals;
• it may be prudent to note that this cover may be required even if you have had no control over the situation that has resulted in your property standing without tenants;
• even with unoccupied property insurance in place, you may be required to visit your property regularly while it is empty to check that everything is okay and to carry out any necessary repair work – you may also be asked to keep a record of these visits and the work undertaken.

Types of tenant

One further area where policies may differ in important respects is in their approach to certain categories of tenant.

Some landlord insurance policies may impose restrictions on the types of tenants that you can have in your property, excluding categories like students, DSS, asylum seekers or other groups from cover.

Finding the landlord insurance policy that suits you and your property

We have suggested just a few examples of differences in landlord or buy to let property insurance cover that may make a difference to you. Taking some time to read through landlord insurance quotes to ensure that you understand what’s covered and what’s not, might help you to find the landlord insurance cover that’s most appropriate for you.

The price of your insurance premiums is, clearly, going to be an important consideration. Beware, however, that relying exclusively on price alone may result in you buying a policy that may suit your pocket but which may not provide you with the cover you need in the event of a problem.

How much is landlord insurance likely to cost?

The answer is similar to the one about how long is a piece of string – it all depends.

It may be influenced by factors such as:

• the type of property you have;
• whether you let it on a furnished or unfurnished basis;
• the level of cover you need for contents;
• the value of the property in terms of how much it would cost to rebuild it completely from scratch (as well as clearing the land and surveyor costs in the event the building is completely destroyed); and
• the level of voluntary excess you may be prepared to accept.

So, before you may be able to think about how much your landlord insurance is going to cost, you may first of all have to consider the above factors and give some thought to those elements of cover which may not be included in all buy to let policies.

As we have seen, some of those potentially important differences and exclusions might include cover for:

• malicious damage by tenants;
• loss or damage from subsidence; or
• types of tenant – some policies may exclude students and welfare claimants.

When thinking about how much landlord insurance is going to cost, you may also have to bear in mind that if your property is standing empty for extended periods of time – perhaps longer than 30-45 consecutive days – then you may typically need to get an unoccupied property insurance quote.

So, questions about the cost of your landlord insurance are unlikely to be answered in any meaningful way until you know what you are looking for. We would be only too happy to help you get the answer you need, so please feel free to get in touch, either via email on cover4letproperty@alanblunden.co.uk, or by telephone on 01702 606301.

The coronavirus pandemic continues to plague certain corners of the property market and responses to it look to have a significant longer-term impact.

The following news snippets might help to illustrate that impact.

Changes to Right to Rent

Online searches should make it easier for landlords to carry out Right to Rent checks – on the immigration status of prospective tenants – according to a news item on Property Wire on the 19^th of October.

Despite protests from landlords’ groups that the need for Right to Rent checks made landlords out to be “unpaid border control officers” the legal obligation remains a provision of the Immigration Act 2014.

Those now granted entry to the UK, though, will have a webpage containing their photograph, immigration status, and right or otherwise to rent a home in this country. That should make the job of landlords more straight forward.

More than £1.7bn worth of unclaimed property lying vacant

An estimated 8,000 properties across the UK are sitting vacant and unoccupied because they remain unclaimed after the deaths of their previous owners, revealed a report by Landlord Today on the 22^nd of September.

The combined value of all this empty property is estimated at some £1.744 billion – an average of £218,300 per home or unclaimed estate.

Landlord Today cites London as the unclaimed property hotspot of England and Wales. This is an estimated 30% of all unclaimed estates located in the capital and with an estimated worth of £516.7m. These unclaimed estates equate to the same value as 1,079 London homes (based on the current average property price of £479,018).

Most of these empty homes have been left by widows, spinsters or bachelors who died intestate (they did not leave a will passing the property on to any named beneficiary). Unclaimed properties such as this continue to be officially listed by government for 30 years, after which they are passed on to HM Treasury.

If you are a distant blood relative or spouse and are interested in details about how to make a claim on hitherto unclaimed property, these may be found in guidance issued in the official Gazette on the 8^th of September.

From urban to rural – tenants ditch the commute for more space

Rents in cities are going up while those in the countryside are coming down. The rising demand for homes in the country confirms that tenants are copying homeowners in a steady exodus from city life.

In an article on the 28^th of October, Property Investor Today commented on third-quarter statistics showing that demand for city-located flats and houses had fallen – with rents on the average flat falling by 0.63% (or £5 to £795 a month) – while rents had risen steadily in the increased demand for terraced, semi-detached and detached houses.

Despite those increases, however, average rents across the whole of the UK for the third quarter of this year registered a slight decline of 0.26% – falling by £2 to a nationwide average of £780 a month.

How smart is your home? Do you embrace new technology and take pride in the way it makes your home a more comfortable place in which to live?

Even if that already plays a large part in your outlook and lifestyle, you might be surprised by just how far it is possible to go these days to make your home an even smarter place to live.

As PC Magazine put it in an article recently, it’s no longer simply a question of synchronising your computer with your smartphone, but connecting practically every gadget and device throughout your home – everything from clocks, to sound systems, lights to doorbells, security cameras to windows, curtains and their blinds, kitchen utensils to practically every other home appliance.

In the interconnectivity of the Internet of Things – the network that links your appliances and devices together to receive your instructions and to send you information – your home grows more automated and smarter.

Smart devices

So, what are some of these devices and gadgets that make your home smarter? Let’s take a brief look at how you can expand your connection to the Internet of Things:

Smart speakers

• perhaps one of the simplest and most straight forward of smart devices is the smart speaker, which started out as just that – a wireless Bluetooth connection to your computer, tablet, or smartphone;

• with the advent of services such as Alexa, Google Home, and Homekit, your smart speaker also becomes a virtual assistant, which you can command by voice alone;

• typically, they are currently used to answer your questions by searching the internet, playing music, doing your online shopping, and setting audible reminders, explained The Smart Homer on the 19^th of May 2020;

• with just a little bit of work and technical know-how, however, you could use your virtual assistant smart speaker to control practically any device or appliance in your home – from simple things like turning the lights on or off to more sophisticated tuning of your home security system;

Video doorbells

• a popular addition to your home security devices is the doorbell capable of capturing videos of your callers, sending the videos to your smartphone or remote computer, and allowing you to interact with whoever is at the door;

• current models – such as the Ring Video Doorbell 2 – have enhanced video recording, alerts to your mobile phone, and the ability to see, hear and speak to visitors at your door in real-time;

Home security cameras

• a notch up from the simple video doorbell and a tad more sophisticated is a home security outdoor camera – such as that offered by Arlo Ultra;

• although the camera is relatively expensive, it gives you especially high-resolution video recording, intelligent motion detection and tracking, auto-zoom, colour night vision, 180º panoramic field of vision, and 6-month battery life (avoiding the hassle of cables and fixed wiring);

Smart lighting

• you can turn your lights on and off, adjust their intensity and even change their colour tone with smart lighting systems – often connected to your voice commands through your Alexa, Google Home, or Homekit virtual assistant.

This is a bare handful of the most popular devices and appliances you might find in today’s smart home. There are many more. Indeed, the greater the interconnectivity of your gadgets through the Internet of Things, the more devices and appliances fall under your remote control, and the smarter your home.

Please note that these are examples of the types of smart devices that are available and are not recommendations.

If you believe that your property may about to be vacant for a significant length of time, you may need to think about unoccupied property insurance. So, this article looks at what is empty property insurance, when might you need it and, what does it cover, as well as other considerations.

Firstly …

Why property you own might be temporarily unoccupied

There may be good reasons for homes in perfectly good condition – whether normally occupied by their owners or by a landlord’s tenants – becoming empty and vacant. For instance:

• the property may be subject to probate before its eventual fate may be determined;
• it may have been a marital home now awaiting the settlement of divorce proceedings;
• the owners may have left for an extended holiday visiting relatives overseas;
• work commitments may mean that the owner may be living elsewhere for the duration of an employment contract;
• the property may be undergoing extensive refurbishment or renovation, making it unfit for habitation for the duration of the building works; or
• a let property may be vacant during the interval between one set of tenants moving out and the time it takes to sign up new tenants.

Insurance when your property becomes unoccupied

Although you might well have arranged adequate and appropriate insurance during the time you are living in your home or it is occupied by tenants, most insurers severely restrict that cover – or consider it to be lapsed altogether – once the property has been unoccupied for a period of, say, 30 to 45 consecutive days.

The precise period may differ from one insurer to another, but if your property is going to be empty for more than a month or so, you may expect the level of cover to be seriously affected at some point or another.

Why the change in cover?

The reason for insurers changing the level of cover provided – or removing it altogether – when the property becomes empty is simply a reflection of the calculation of the risks involved. The assessment of risk, of course, is the basis on which all insurance is agreed.

In the case of a property which is left empty and unoccupied for any period of time (more than a month or so), the risks of loss or damage become significantly greater:

• a relatively minor repair – such as a dripping tap, for example – might develop into a major incident if there is no one living on the premises to spot the problem and arrange for the appropriate remedial action;
• an empty property is also vulnerable to the unwelcome attention of vandals, squatters, burglars and arsonists.

Specialist unoccupied property insurance is designed to ensure that your home or buy to let investment continues to enjoy the appropriate level of protection even when it is empty or vacant.

What does empty property insurance cover?

Empty property insurance is designed to step in when the existing cover provided by your main building and contents insurance inevitably reduces – or lapses altogether – whenever it is left empty and unoccupied for longer than a month or two.

It may provide relatively basic cover – if the property has little of value within it, for example – or it may provide as comprehensive a degree of protection as the property insurance that normally protects it when it is in continuous occupation

Depending on the level of cover you opt for, it provides protection against loss or damage to the building and its contents.

It may also continue to protect you against claims of your liability as the property owner or landlord if someone is injured or has their own property damaged in the course of contact with your home.

You have this duty of care even to those – such as squatters, vandals or burglars – who may have entered your property illegally. If they are injured or have their property damaged, they may still sue you for damages.

In any event, public liability claims may assume substantial proportions – especially if personal injury is involved – so indemnity of at least £2 million is offered by the typical unoccupied property insurance policy, and it is not uncommon for indemnity to be offered against much larger claims – up to even £5m.

It covers just what you might expect and hope it to cover – by providing whatever level of protection you choose as a standalone alternative or substitute when the property you own needs to be left empty

Unoccupied property insurance is also very flexible. If you know that your property is going to be unoccupied for only three months or so, for example, it is possible to arrange cover just for that period, rather than for the full 12 months of the year.

Appropriately enough, this form of cover might be called 3-month empty property insurance.

On the other hand, if the vacancy extends beyond the interval you originally anticipated, unoccupied property insurance is typically flexible enough for you to extend the cover for as long as you need – you, of course, do need to inform your insurance provider of any cover extension required.

When arranging empty property insurance, you might want to consult a specialist provider – such as those of us here at Cover4LetProperty – since there may still be different levels of protection offered by different policies, principally for example:

• FLEA – cover which is restricted to the perils of fire, lightening, aircraft and explosion;
• FLEEA – that which includes the fire, lightening, aircraft and explosion risks of FLEA but also adds the peril of earthquakes;
• all risks – which includes all of the risks included in FLEEA cover but also may restore to your property protection against the full range of perils typically covered by your standard home or landlord insurance, in other words, including such risks as storm damage, flooding, theft, malicious damage and theft, for example.

Your obligations under your unoccupied property insurance

Responsibility for taking care of your home or let property does not end when you arrange unoccupied property insurance. You still have an obligation to take all reasonable steps to mitigate the risk of loss or damage as well as fulfil your obligations under your insurance contract.

• you may, for example, be required to visit your property regularly while it is unoccupied and arrange for normal maintenance to be carried out, as well as fix any problems or issues that you find;
• keeping the garden tidy and rubbish free may also be required and you may be asked to drain down heating and water systems or, alternatively, keep the property at a minimum temperature during the colder months;
• you might also be asked to keep a log of visits made and the work carried out on each occasion you visit;
• these general principles apply irrespective of whether or not your property is furnished or empty at the time – the key concept applicable is whether or not it is occupied or unoccupied.

Finding the most suitable empty property insurance

Like most forms of insurance, you are likely to find the most appropriate and cost-effective cover the more carefully you look around and the better informed your sources of advice – from experts such as ourselves here at Cover4LetProperty, for example:

• by using a specialist broker such as ourselves, you might be assured of some of the most competitively-priced policies in the market – without skimping on the insurance cover you need;
• since the needs vary between different property owners and what is cheap empty property insurance for one might appear less so to another, you are likely to be looking for value for money, rather than the absolutely cheapest deal;
• unoccupied property insurance is designed to take over where your regular home or landlord insurance leaves off once your property has been empty for a month or so – and 3-month empty property insurance is clearly much cheaper than having to buy cover for the whole year;
• if you are looking to save money on the cost of unoccupied property insurance, you need to take the same degree of care in establishing what you want covered and to what amount;
• depending on the kind of property you are leaving vacant, and the length of time it is likely to remain empty, you might be content with relatively basic cover – which unoccupied property insurance is certainly flexible enough to provide;
• in the case of your own home, however, you are likely to look for a comprehensive form of unoccupied property insurance;
• even if you are looking to economise, buildings cover needs to be sufficient to pay for the cost of completely reconstructing the property in the event of a major disaster and contents need to be insured to their full replacement value;
• you also need to maintain an adequate level of property owner’s liability insurance against claims made by any neighbour or member of the public who may be injured or have their property damaged as a result of contact with your empty property – even including individuals who may have entered the property illegally.

Buying cover from a specialist

When arranging your empty property insurance, you may also want the ease and convenience of getting an unoccupied property insurance quote online, buying it online yet also being able to discuss your particular needs or to ask questions on the telephone. That is why are friendly, professional team are also available on 01702 606 301.

When you consult a specialist provider, you may be assured of the type of personalised service which may be absent if you are dealing with a large national chain or buying direct from an insurer.

In the meantime, and to help address your natural worries and concerns about all the risks of loss or damage to your property when it is left empty, we have published a detailed Guide to unoccupied property. Please also watch our short video at the end of the page here.

If you’ve wondered what has been stealing the news about the property market – for both homeowners and landlords – in recent days, here is our selection of some of the leading stories.

Landlords urged to be on guard against cannabis farms

Hampshire police have warned landlords to be on the lookout for criminals who set up cannabis farms in let property, according to a story in Landlord Today on the 30^th of September.

The alert follows swoops on two different addresses – in the Portsmouth and Southsea areas of the county – where thousands of cannabis plants were seized and destroyed. Individuals involved in renting the properties are currently helping police with their enquiries.

Hampshire police have asked landlords and neighbours to report suspicious activity in and around let property – especially if the tell-tale odour of cannabis has also been detected. If you are concerned whether your let property is at risk of such illegal activity, you might want to re-read our comprehensive Guide to landlords and cannabis farms.

Housing market continues recovery says Nationwide

After the slowdown and setbacks of the first half of the year, the House Price Index compiled by the Nationwide building society showed a resurgent and buoyant housing market to close the third quarter of the year.

The Index shows that activity in the housing market has “recovered strongly” says Nationwide, with a further 0.9% increase in average house prices in the UK during September, after an even more impressive increase of 2% in August.

This meant that the annual increase in house prices to the end of August was 3.7%. While, by the end of September, that annual increase had risen to 5% – its highest since September four years ago.

Accompanying the resurgence in house prices, mortgage approvals have also risen steadily. Where approvals stood at around 66,000 in July, they shot up to 85,000 in August – the highest number of monthly approvals in 13 years – and significantly higher than the usual monthly average of 66,000 throughout 2019.

Million-pound homes outperform the rest of the market

The recent release of pent-up demand has fuelled an increase in house sales across the market. None have been selling more successfully, however, than homes valued at £1 million or more, according to analysis published by Property Wire on the 29^th of September.

In terms of the number of transactions agreed and the time spent advertising a house for sale, million-pound homes are outperforming all other categories.

From Norfolk to Wiltshire, and from Cornwall to favoured London boroughs, wealthier buyers are eager to snap up properties with more space and bigger gardens. As a result, multi-million pound homes are currently selling a whole 18 days more quickly than they did at the same time in 2019 – the fastest they have sold in six years.

Landlords in major UK cities see rental demand climb 13%

It is not only the homebuyers’ market seeing especially strong activity, according to a story by Property Reporter on the 30^th of September. Buy to let landlords have also reported a 13% increase in demand for private rented accommodation.

The third-quarter surge in demand for rental accommodation has been most marked in Belfast, followed closely by Glasgow, Bournemouth, and Bristol. Some cities outside of London, however, have seen noticeably lower increases in demand from prospective tenants – namely, Aberdeen, Leeds, and Leicester.

In the capital, the average increase in demand since the second quarter of the year has been 10% – but for some notably stronger-performing boroughs and districts on the outskirts. Thus, Kingston saw an increase in demand of 18%, Richmond 15%, and Havering, Islington, Hillingdon, and Barking and Dagenham all registering increased demand of 13%.

Maintenance and security – those are the twin concerns about any property that is left empty and unoccupied for any significant length of time.

Appearances may also have a notable impact on those issues of maintenance and security. And if your property is empty because you have been unable to find tenants willing to occupy it, then appearances may also be the root cause.

So, let’s take a closer look at those three issues – maintenance, security, and appearances – to see how they might be impacting your property.

Maintenance

Adequate and appropriate maintenance is essential to keeping your property in a good state of repair. That is how you help to look after its value and prevent repair and maintenance issues from causing damage to the structure and fabric of the building.

In any property insurance contract, therefore, the insurer is entitled to insist that you maintain your property in a good state of repair – whether it is occupied and in use, or whether it is temporarily empty and unoccupied.

Landlords and your unoccupied property

Like it or not, there may be times when your property is going to sit unoccupied.

If you are a landlord of buy to let property, you may encounter a delay in finding new tenants or perhaps another circumstance might involve you needing to close your property to letting in order to undertake conversions, refurbishment or simply to do some redecoration.

In all these circumstances, your property may be at additional risk while it is unoccupied due to a couple of inescapable facts:

• day to day problems such as leaking pipes might go unnoticed and uncorrected; and
• unoccupied properties are typically more tempting to people such as burglars, vandals, and squatters.

For those reasons, your insurer is likely to restrict your level of cover, or even regard it as having lapsed altogether, once the property has been unoccupied for longer than a period of between 30 and 45 consecutive days (the exact interval varying from one insurer to another).

Unoccupied property insurance and your obligations

Your first course of action, therefore, is to get a quote for standalone unoccupied property insurance to maintain the protection your empty property continues to need. Even so, it remains your responsibility to maintain the property in a good state of repair and keep it secure even with that unoccupied property insurance in place.

In the spring, summer for instance, it might be advisable to switch off the water at the mains. You might want to do the same for most of your electrical circuitry other than perhaps your lighting circuit if you have some timer lights on it for security reasons.

In winter, it might be advisable to try and leave the central heating on a low and level, just to avoid the build-up of damp in unoccupied property.

Refer to your property insurance contract as to what actions you should take at certain times of the year. For example, your insurance contract may stipulate that a constant temperature needs to be maintained within the property during colder months.

Visit the property regularly – or arrange for someone to do so on your behalf

Make sure that you visit your property regularly – this will typically be a condition o your empty property insurance. Look around for obvious signs of deterioration or problems and fix them before they become serious.

Odours can become a serious issue in unoccupied property and might make it more difficult for you to let it again in due course.

It might be sensible therefore to invest in some deodorizers and possibly also dehumidifiers.

Finally, pests can quickly move into any unoccupied property, so you may wish to consider taking whatever steps you think to be necessary to minimize such risks. Remember that once established, it can be exceedingly difficult to remove pest infestations.

Security

Burglars, vandals, and squatters love unoccupied property. They usually prefer properties that offer a reduced chance of being disturbed – which is why they typically find unoccupied properties so attractive. They may look for signs of occupation before deciding whether or not to try and enter and anything that indicates change might discourage them.

Appearances are all-important as far as your empty property goes. Take all reasonable precautions to ensure you are not obviously advertising the place as unoccupied. You can help to achieve this through some fairly common-sense measures:

• don’t let your builders hang advertising boards or notices outside your property if the reason for your property being unoccupied is because they’re working inside it;
• don’t let accumulating post build up to become visible from outside;
• avoid the accumulation of rubbish outside;
• pay attention to gardens that move from being well-kept to looking untidy and unloved;
• open curtains and no lights on at night is something that might be an invitation to burglars – so avoid it through the use of timer switches;
• periodically change the appearance of your property from the outside (e.g. opening or closing the curtains);
• try to avoid talking widely about the fact that your property is sitting unoccupied – and don’t advertise the fact on social media; and
• if possible, arrange with a neighbour to keep an eye on your property.

5 ways to improve the appearance of your empty property

We have mentioned the importance of appearances as far as security goes, but what if your property remains unlet because its appearance is putting off tenants? Here are five tips and suggestions:

1. Initial external appearance

• a significant number of tenants might do a drive-by inspection of your property from the outside before they even decide to ask for a viewing;
• if the outside looks tatty, ill-kept and run-down, then there is a fair chance that tenants will keep on driving and never bother to come back;
• so, invest some time and a little money in tidying up the garden, using a little paint to brighten up woodwork and perhaps investing in some modern-looking and clean curtains;

2. Entrance halls

• once you persuade a tenant to actually visit your property, this is typically the first internal area they will see;
• make sure that it is bright, fresh-looking and with some form of decent floor covering down – what you do not want tenants to see after opening your front door for the first time is tatty carpeting, broken lino or wallpaper peeling off;

3. Light fittings

• make sure that your property is well-lit and all lights fully working – there is no excuse for bare light bulbs hanging from ceilings, broken lampshades or even worse, rooms without a bulb and which cannot be illuminated;
• equally, dirty, old, and tatty lampshades should be quickly consigned to the bin and replaced by modern equivalents;

4. Furniture – including beds

• broken, stained and past-it’s-sell-by-date furniture (particularly a bed) is a real turn-off for potential tenants;
• true, even modern flat-pack furniture tends to be expensive, but you may be able to replace unacceptably poor-quality items in your property by visiting local antique and second-hand property auctions;
• it is perfectly possible at such venues to pick up excellent pre-used furniture at a fraction of what you would pay for it new;

5. Plants and flowers

• little is more effective in generating a sense of homely attraction than indoor plants and flowers;
• these can be picked up in markets or garden centres for relatively small amounts of money and they may make all the difference to a viewing’s outcome.

If your property has been sitting unoccupied for some time due to letting difficulties, don’t forget the importance of an unoccupied property insurance quote – but remember that you continue to bear responsibility for keeping the place in a good state of repair and for maintaining all due security precautions.

Further reading: Guide to unoccupied property.