Using an insurance broker to find your buy to let insurance cover may be one way of ensuring that you find the most cost-effective and appropriate protection for your property.

Specialist landlord insurance brokers may be able to match your requirements to a range of policies, which you can then compare – choosing the one that most closely matches your particular needs and requirements.

Looking for a suitable solution to your insurance needs

Unless you have unusually intimate knowledge about the workings of the insurance market – and landlord insurance in particular – you might want to consult a specialist landlord insurance broker.

Going it alone by shopping around and attempting to compare one policy with another is likely to prove time-consuming. It may still not lead to the perfect match between your insurance needs and the policies available.

Do I have to use a broker?

No, you don’t need to use such a broker. You could trawl through many websites trying to obtain individual quotations, or visit your high street, then narrow them down to the policies that most meet your needs.

It’s not just about comparing prices though – you need to ensure that your comparisons are on a like-for-like basis. Individual policies can have different product features, benefits, terms and conditions, so you do need to take care when comparing your landlord insurance options.

A landlord insurance broker can help in that search and make the necessary comparisons on your behalf.

Using landlords’ insurance brokers may be something that saves you time, money and leads to greater satisfaction with your eventual landlord insurance solution. By using an online landlord insurance broker, the legwork is done for you.

What are the advantages of using a landlord insurance broker?

The Money Advice Service says that there are more than 2,000 registered insurance brokers in the UK.

What services are offered to support such a relatively large population of brokers? The British Insurance Brokers Association (BIBA) lists the reasons why many people – including those looking for landlord insurance – seek the help of a broker:

• brokers have access to insurance products from across the entire market;
• in addition to providing advice, a broker can also give advice and, if it comes to it, help you in submitting an insurance claim;
• a broker may help you to manage the risks you face as a landlord and the insurance policies that protect you against those perils;
• brokers are obliged to be completely transparent about the costs associated with arranging your insurance;
• they are regulated by the Financial Conduct Authority (FCA), and your fair treatment is further guaranteed through the Financial Ombudsman Service.

In a nutshell, a landlord insurance broker possesses the specialist expertise and experience to help ensure that you identify and arrange a suitable insurance policy at a competitive rate.

Landlord insurance to protect your buy to let business

Just like many another responsible and prudent landlord, you may consider landlord insurance to be essential.

Investment in buy to let property is essentially a business concern. As such, your objective may typically be expressed along the lines of trying to obtain the maximum occupancy you can, for the highest possible rates while, at the same time, reducing your costs and risks. Using a landlord insurance broker may help you with the latter part of that objective.

Brokers typically know the market well and have access to multiple insurers. They generally are specialists who may be able to match your requirements against those of their insurers, to avoid you having to do the work of comparing dozens of offers against each other.

Your mortgage and buy to let insurance

You may need your landlord insurance policy in place to protect the structure of your building (if you have a buy to let mortgage, such cover may be obligatory as part of your contract with your lender) as well as its contents. You may also place great importance on having appropriate third-party liability cover.

Important as all those things may be to you, you may also have two further objectives relating to your landlord’s insurance:

• to try and obtain the most appropriate landlord’s cover you can; and
• to try and keep down the costs of your let property insurance to the most cost-effective level possible.

These two objectives may, in some respects, appear to conflict with each other, and you may welcome some assistance in trying to achieve both these goals.

This balancing isn’t unique to insurance, of course, because it forms part of modern life. When thinking about landlords’ cover, however, landlord insurance brokers such as ourselves may be able to help you achieve it.

Unoccupied property insurance

It might be worth taking a closer look at how the specialist knowledge of a landlord insurance broker may prove especially useful.

For example, a broker might be able to advise on your possible need for an unoccupied property insurance quote.

An unoccupied property quote may be required in situations where you have a property standing unoccupied for a period exceeding 30-45 consecutive days (an event that may automatically invalidate any existing, standard landlord insurance).

This is because a standard buy to let insurance policy may not provide you with cover if your property has no tenants in it for a period of 30-45 consecutive days (the period may vary depending on the insurance provider).

An empty or unoccupied property may or may not be furnished – it is the absence of tenants that is the critical factor. It might arise for a variety of reasons that may not be particularly important from an insurance point of view – the important fact is that the property is unoccupied and unoccupied property insurance may be required.

That may be because when there are no tenants in your property, small problems may develop into larger ones with no one there to spot them (and get them fixed) and thieves and vandals may be more likely to strike when they may know that there is no one around.

An insurance broker’s proactive advice and high-level view of the marketplace may prove to be invaluable to you.

Additional specialist knowledge

Unoccupied property cover may not be the only feature of landlord insurance that you want to ask your broker about

Your landlord insurance policy, for example, may also be able to offer you cover for malicious damage by tenants as standard or damage caused by subsidence.

You may also welcome the flexibility of being able to choose exactly who you let your property to – some buy to let properties may exclude students or DSS tenants from cover and this may impact on your ability to earn a living.

At the end of the day, what you are looking for in your landlord insurance broker is the chance to select a policy for your investment property which offers you the peace of mind and the flexibility you may need.

Why not contact us today to see how we can help? Or, alternatively, you get an online landlord insurance quote here.

The property market is reopening after having lain dormant for nearly three months.

Little wonder, then, that news is again picking up on various topics of interest to property owners. Here are some of the latest snippets.

Leicester is the best city in the UK to invest in property

As the first green shoots of renewed interest in property investment begin to show, you might have wondered where the best place is not just to invest in property but also to set up your business.

An article in Property Wire on the 28^th of May claims to have the answer – and that place is the city of Leicester.

In recent years, the survival rate for new businesses in and around Leicester has been an encouraging 91% – leading the second and third-placed cities, Bristol and Coventry, at 90.6% and 88.7% respectively.

House prices in Leicester have also risen by 28.3% in the past two years – an average increase of over £69,000, from £176,382 to the current £246,000.

Calls for a Stamp Duty holiday

Although the pent-up demand from the recent lockdown looks set to restart the housing market, it might have a much-needed kickstart by giving some buyers at least a tax break in the shape of a Stamp Duty holiday.

A story in Estate Agent Today recently explained online listings website Zoopla’s reasoning.

If Stamp Duty were temporarily put on hold, buyers would be expected to increase their activity, and the bounce back in property transactions might help to fill the 43% deficit in Treasury receipts from Stamp Duty during the month of April alone.

Because it would be a temporary holiday only, buyers may be expected to act sooner rather than later, when the tax could be re-applied as normal when the market stabilised.

The article recognises that any tax holiday would benefit some buyers more than others, depending on how much they were paying for their new home. Stamp Duty is currently zero-rated on the first £125,000 of the purchase price, 2% up to £250,000, 5% on the balance up to £925,000, and 10% on any balance up to £1.5 million. First-time buyers are exempt from Stamp Duty on homes costing up to £300,000 and pay 5% on the amount between £300,000 and £500,000.

The London postcodes that have seen the biggest drop in rental prices

One of the key sectors of the housing market most immediately affected by the recent lockdown was the private rented sector, explained a recent article in Homes & Property magazine.

One of the worst affected parts of the country is London and, as a result, rents in the capital have fallen by as much as 15% since the beginning of March.

The worst-hit boroughs are in Zone 3, where rents are 7.9% down on the same time last year – to an average of £1,870 a month. Nearer the centre, in Zone 2, rents have fallen by 6.9% to an average of £2,520 a month. While in Zone 1, the fall has been some 5% to an average of £2,910.

Student landlords threaten legal action over non-payment of rent

Some landlords appear to be breaking advice and guidance issued by the Competition and Markets Authority (CMA) by not granting refunds of rent when accommodation was cancelled by students returning home during the coronavirus lockdown.

In a story dated the 26^th of May, Landlord Today drew attention to those landlords currently threatening legal action against their student tenants to recover rent that remained unpaid when they packed up and returned home, on the advice of their universities and colleges.

With their rented accommodation unoccupied, many students simply stopped paying their rent and have decided not to resume payments during the summer holidays, while uncertainty surrounds any return to their studies in September.

Universities have urged landlords to follow CMA guidance in offering refunds where tenancies have been cancelled, but some landlords and their agents persist in taking legal action.

If you are the owner of a buy to let property, you might be the landlord of either or both:

• residential let property; and
• commercial let property.

Naturally enough, residential property is occupied by private tenants making their home. In contrast, commercial property is occupied by business tenants with their own commercial enterprises to run – be they shops, restaurants, offices, or light industry.

Finding commercial landlord insurance that matches your exact needs may be critical for you to maximise your income and minimise your costs.

What is the difference between a commercial landlord and a residential landlord?

As the names suggest, the most significant difference between the two types of landlord relates to the purposes the property will be used for – commercial or residential. So, letting a small warehouse would make you a commercial landlord. Letting a flat would mean that you’re a residential landlord.

That difference is important because:

• the prevailing legislation governing letting is different for each type. A landlord must be sure they understand the appropriate laws affecting their commercial properties and their operations and comply accordingly;
• different landlord business insurance policies typically apply.

It might be worth noting that sometimes hybrid or mixed-use properties are involved – a shop with upstairs accommodation included, for example. Specific local authority regulations might then apply, while you might also need specialist mixed-use landlord insurance.

For present purposes, let’s restrict our discussion to commercial property insurance.

When it comes to insurance for commercial let property, one of the distinguishing features is that it is typically subject of one or more of the lease conditions.

The clarification is essential since it is customary for the owner of the let property to arrange commercial landlord insurance and to include the cost of this in a general management charge to the business tenant. The terms and provisions of the insurance cover and who pays what, are included in the lease between landlord and tenant.

If the same building has several different tenants, suggests the Royal Institute of Chartered Surveyors (RICS), individual leases might describe how the costs of the relevant service charges, including insurance, are apportioned – based on the floor area rented in each case, for example.

Why arrange insurance for commercial landlords?

Most of us want to think that our financial interests are protected by appropriate insurance.

If you’re letting a commercial property, then commercial landlord insurance should be seen as being essential. In fact, it might be contractually required by your funds or mortgage provider, if you are purchasing the property using finance.

Both your commercial landlord insurance and any loan agreements might specify restrictions in terms of tenant types and their associated commercial activities.

One such example might be tenants running a production process using dangerous chemicals or those planning to use your premises for purposes they were not designed or licensed for.

As this can be a complicated type of business insurance, using the services of a specialist provider to find the most comprehensive and cost-effective commercial property insurance required for your own unique circumstances makes sense. At Cover4LetProperty, we are more than happy to advise on these and other special circumstances.

What is covered by a typical commercial landlord insurance policy?

There are several important headings which are likely to apply both to residential and commercial lettings and some provisions appropriate only to the latter.

A specialist provider of commercial landlord insurance – such as those of us here at Cover4LetProperty – is in a position to offer greater detail about the following typical headings:

Building insurance

• at the heart of the insurance for commercial landlords is cover against loss or damage to the structure and fabric of the building or buildings;
• the structure and fabric of the building is protected against damage by what are known as the insured perils – these include flooding, fire or smoke damage, storms, or earthquakes;
• it is customary for the total building sum insured to reflect the worst-case scenario in which the complete premises need to be rebuilt (as well as the site being cleared beforehand);
• to arrive at an accurate cost of reconstruction – and to keep that estimate up to date – the landlord is likely to commission periodic valuations by a qualified surveyor and valuer, including the costs of such surveys in the tenants’ management charges;
• reference might also be made to the Commercial Reinstatement Tool published by the Royal Institute of Chartered Surveyors (RICS);

Contents cover

• any contents you own in your let commercial property may have some partial cover from your tenants’ insurance – but that may require you to prove that liability for a subsequent problem resided with them;
• the circumstances leading to the loss or destruction of your contents might be your responsibility (natural causes);
• you might also have liability in terms of the tenants’ stock and contents residing in your property, should those be damaged by say a leak caused by your failure to maintain the property appropriately;

Landlord’s liability insurance

• property owner’s or landlord’s liability insurance is there to protect you financially should someone make a claim against you for legal claims loss, damage or injury caused while in or around your business premises;
• not all policies offer the same levels of cover against this risk. Policies arranged here at Cover4LetProperty incorporate up to £5m worth of indemnity insurance cover as standard;

Loss of rental income

• clearly, the landlord relies upon the rent from tenants to sustain his business;
• if a major insured event leaves the premises unusable by the business tenants, the lease might provide for the suspension of rent or the termination of the tenancy;
• in either event, of course, the landlord is likely to look to insurance providing compensation for any such loss of rental income;
• meanwhile, the tenants, too, are likely to seek compensation for the disruption to their trading activities and may want to be involved in the scheduling of repairs to the property and priorities for spending any insurance settlement;

Unoccupied property insurance commercial

• making sure that you have empty or unoccupied property insurance may be particularly crucial for your commercial property;
• an empty property is one that typically stands untenanted for a period of 30-45 consecutive days or more (the period may vary depending on which insurer your current policy is with);
• you may also need to find a commercial landlord insurance policy which can cover partially occupied premises or those where there is a mix of commercial and residential use – once again, we are happy to help field any such enquiry.

Summary

Commercial landlord insurance is a particular, specialist type of insurance which might be complicated not only by the nature of the risks it covers but also by how those risks are apportioned between landlord and business tenant. As may be clear, the terms and conditions of the lease need to spell out these respective responsibilities.

There are multiple combinations of circumstances that might materially affect your choice of business and commercial insurance for landlords. So, it is worth thinking carefully about the issues involved and consulting suitable specialist advice.

Further reading: Complete guide to being a commercial property landlord.

If you own any kind of property, it is rarely with the intention of it remaining empty.

Whether it is a house or flat you live in or a buy to let property of which you are the landlord, if it is left empty for a period typically longer than between 30 and 45 days (the exact period varying from one insurer to another) it becomes formally unoccupied for the purposes of insurance.

That is the time you are likely to need specialist unoccupied property insurance to ensure that adequate protection remains in place for your empty property.

Should you look for the cheapest unoccupied insurance?

As with all financial products, one man’s cheap insurance may be another man’s “basic” insurance, and different property owners may undoubtedly be looking for different things for their money. The key thing about any kind of house insurance policy may be to find one that suits your own individual requirements at a price that meets your expectations.

How do properties become unoccupied?

One thing is certain: no matter what your property is like, you may easily cross the line from having a property that has been vacant for a couple of weeks, to having one that has become unoccupied in the eyes of an insurer.

So, one day your current policy may be adequate, but the next you may have to search for a suitable unoccupied home insurance for your property. This may be the case whether you are an owner-occupier or a landlord.

There are many reasons why a property may be empty:

• you might be a landlord facing a longer than usual void – the period when your let property is unoccupied because one set of tenants has moved out and you are still waiting for a new tenancy to begin;
• you have to work away from home for longer than a month or are taking an extended holiday;
• unfortunately, building, decorating, plumbing and electrical works are prone to overrun, so refurbishment projects and other building works may take longer than expected – and all the while the building remains unoccupied because works are still in progress; or
• the unoccupied home may be a probate property. Sometimes, after you lose a loved one, it can take a while for probate to be sorted out. And when probate has finally been granted, it may take even longer for the property in question to be sold. In these circumstances, it is easy to see how 30 days or more may elapse, and therefore how the property can become “unoccupied” for the purposes of insurance.

Why do you need specialist unoccupied home insurance?

When you are living in your owner-occupied home or your property has tenants in place your regular property insurance policy may offer appropriate protection for the set of circumstances that may arise.

When your property is empty or untenanted on the other hand, the property may face risks that just may not be covered by your policy.

In case you were wondering why you cannot just plod on with your current regular property insurance, you may wish to check the terms and conditions of your policy. If you do not have suitable vacant property insurance cover, you may find that the insurer may not pay out if something were to happen on the grounds that the policy would be void if the property were unoccupied.

In other words, insurance providers typically recognise that the risk profile associated with an empty property is significantly different from that seen with a property that is occupied.

Of course, insurance providers accept that your property may be temporarily empty from time to time as part of normal events. Examples of such occurrences may include things such as holidays, changeovers between tenants or possibly short periods where you have decided your property needs a quick refresh before it is let again or during renovations.

That is where the 30-day period comes from – your property becomes unoccupied in the eyes of your insurer once there has been no one living there for longer than 30 to 45 consecutive days.

Why do empty properties present more risks?

With a bit of luck, your empty property may be no more likely to befall a disaster than it would be when let or lived in by yourself. In that case, you may wonder whether you have to bother with getting any empty property insurance at all.

But insurers perceive vacant properties as being at a greater risk of damage simply because there is no one there to notice and act upon the kinds of perils that are insurable.

So, if there is a fire or a flood at the property, the mere fact that there is not a tenant or owner on hand to get out the fire extinguisher or sandbags may mean that the risk of damage may be higher. A small problem – like a leaking drip of water or a broken window – may, over time, become worse or allow the ingress of the weather with the end result being that the damage caused maybe a lot worse than it may have been if you or tenants were at home and the problem was spotted and dealt with earlier.

Furthermore, empty properties may attract the unwanted attentions of thieves, vandals, squatters, and arsonists.

Seeking an empty home insurance quote

As we have seen, when you arrange your house insurance or landlord’s insurance, the policy incorporates terms and conditions relating to the occupancy status of your property. Regular policies such as these are based on the assumption that your property is occupied – by you and your family or by tenants.

Naturally, this does not mean that someone has to be on the premises every minute of every day and night. Provision is made for periods of absence which are of relatively short duration – including a week or two on holiday or some such.

If the property remains unoccupied for longer than a month or so, however, you are likely to need unoccupied property insurance to maintain the cover and protection your home continues to require.

You may also find that having suitable insurance at all times is typically a condition of your mortgage contract if you have a home loan on the property.

Playing your part

Even though you might have arranged suitable unoccupied property insurance to cover an extended period when you or tenants are going to be away, as the owner of the property you still have an obligation to take all reasonable steps to mitigate any loss or damage while the premises are empty.

Unlit windows and a garden becoming more and more untidy, for example, may prove all too encouraging signs for thieves and vandals. So, install some timer switches for the lights to come on of an evening and arrange for the garden to be kept neatly in trim.

It may be necessary to keep a diary of the dates and times that you visited and a note of any work you undertook by way of preventative repairs and maintenance. Formal or informal inspections such as these may be a condition written into your unoccupied property insurance policy.

Remember that cheap unoccupied property insurance may be required irrespective of the reason your property is standing unoccupied. Even in situations where you have been unable to influence events (e.g. expected tenants failed to arrive) your insurance may be at risk if you go over the 30 or 45-day period.

As with other forms of house insurance cover, it is generally correct to say that what may be cheap unoccupied property insurance for one homeowner or landlord may not prove to be so for you, so shopping around to make sure you get the most appropriate deal is important.

If you are unsure what type of cover you need for your empty property, or what is the most suitable insurance for you please feel free to contact us – we’d be delighted to explain your options.

Further reading: Guide to unoccupied property and Guide to renovating.

Strange and unusual times have been brought about because of the coronavirus crisis.

Just as in practically every other walk of life, those changes have been felt as keenly in the housing market as anywhere else. Here is a brief review of some of the current effects of lockdown.

£82bn of property transactions on hold on due to coronavirus

Sales of some 373,000 homes have been suspended and remain on ice during the current lockdown, tying up transactions worth some £82 billion, says Property Reporter on the 28^th of April.

Unsurprisingly, orders to stay at home and maintain social distancing have had an immediate and major impact on the housing market. During the month of March, for example, apparent demand for housing fell by around 70%. Early April saw that trend gradually bottoming out, so that demand had fallen to about 60% of the level recorded before March.

As April progressed, so interest in property transactions continued to revive, so that demand is currently only around 35% lower than at the beginning of March.

Despite these figures, though, the underlying conclusion is that the market is currently on hold rather than in any terminal decline. Few homes have been withdrawn from the market and the majority continue to be offered for sale, with the volume of listings only around 4% lower than at the beginning of March.

Average monthly rents remain almost unchanged in Q1 2020

The past 12 to 18 months have seen average rents across the country remain more or less static. During the first quarter of this year, the average rose just £2 on the levels achieved at the end of 2019 – to £775 a month – according to a report by Landlord Today on the 29^th of April.

Citing figures from the Deposit Protection Service (DPS), the article confirmed that the highest levels of rent are, of course, in London – an average of £1,345 a month, the same as at the end of 2019, and equivalent to around 42% of the average Londoner’s income.

The long-term effects of the coronavirus crisis – and a lockdown during which households are encouraged not to move home – remain to be seen. The article reports that some landlords, however, are asking how to claim against a deposit if the tenant leaves without giving notice.

One in seven mortgage borrowers have taken a payment holiday

Landlords have been offered an estimated 1.6 million buy to let mortgage repayment holidays – around one in seven of all monthly repayments owed to lenders – according to Property Wire on the 29^th of April.

The offers are made to landlords facing financial difficulties during the current crisis and the so-called payment holiday allows them to defer an agreed number of repayments until a later date, when the missed payments (including interest) become payable.

Giving the reasoning behind government’s encouragement of buy to let mortgage payment holidays, the Financial Conduct Authority (FCA) explains that, for their part, landlords are expected to refrain from pursuing any action against sitting tenants for repossession of their let property. Provisions ensuring the protection of tenants from eviction are incorporated into Section 81 Schedule 29 of the Coronavirus Act 2020.

New app can prove landlords’ gas engineers tried to gain access

Guidance issued by the Ministry of Housing, Communities and Local Government recognises that the need for certain vulnerable tenants to self-isolate means that landlords may be unable to conduct routine health and safety inspections.

The guidance reassures landlords that they will not be unfairly penalised for failing to conduct inspections in those circumstances, especially if they can show that arrangements have been made for them to be made at a later date.

On the 28^th of April, Landlord Zone carried an article about a free mobile app, called Gas Tag, which landlords can use as evidence that they attempted to conduct one such critical inspection – for gas safety – but that the tenant had refused entry.

If you are a homeowner, you are probably aware of the importance of building and contents insurance to safeguard against the risks of serious loss or damage to both the structure and fabric of your home and its contents.

When you arrange building and contents insurance for the home in which you are living, your insurer knows that you are the owner-occupier – and the risks associated with providing the cover requested are calculated on that basis.

If you decide to let that property to tenants, however, there is a fundamental change in the entire basis on which the property is used – rather than the home in which you live, it becomes a business proposition in which you generate income from the rents you charge tenants. This is where landlords insurance is typically required.

“Accidental” landlords

That is true whether you are a full-time landlord making your entire livelihood from let property or a so-called “accidental landlord” after finding yourself with a property in which you decided not to live.

That fundamental change of use – from a property in which you live to one that you let to tenants – also means that any standard home buildings insurance policy is no longer likely to be valid and you must instead arrange purpose-designed landlord insurance – or buy to let insurance as it is also known.

In a nutshell, any existing regular form of home building and contents insurance is unlikely to provide the cover you need.

Your mortgage

That difference in use is critical to mortgage lenders – with the Council of Mortgage Lenders explaining how buy to let mortgages are quite different to standard residential mortgages for owner-occupiers.

That difference is just as critical to insurers. So much so, in fact, that any standard home insurance you might have arranged to safeguard your home and its contents when you lived there as the owner-occupier, is likely to be invalidated the moment it is occupied by tenants – hence the need for purpose-designed landlord insurance.

One of the fundamental conditions of your buy to let mortgage is almost certain to be the requirement for sufficient buildings insurance always to be in place to at least cover the outstanding balance of your mortgage.

Our Beginners Guide to becoming a landlord explains all more about the role of landlord insurance, while another of our free guides is designed with accidental landlords specifically in mind.

What does landlords insurance cover?

Whether your buy to let property is the focus of a concerted business undertaking or whether you have fallen into the role as a more or less “accidental landlord”, the moment tenants are paying to rent your dwelling, you still want to know just what is covered by your landlord insurance.

Although the nature and extent of the landlord insurance cover may vary from one policy to another, the standard forms of landlord insurance typically provide protection – or the option to add on elements of cover – under the following broad headings:

Buildings insurance

• In common with other forms of property insurance, the principal objective of a landlord insurance policy is to safeguard the structure and fabric of the building itself;
• there are usually many risks covered, including storm damage, flooding, fire, escape of water, impacts (from vehicles and falling objects such as trees and branches), theft, and vandalism;
• the total sum insured needs to be sufficient to cover the estimated cost of clearing the site and rebuilding the property from scratch, following the worst-case scenario in which a severe incident has totally destroyed the let premises;

Contents insurance

• since most landlords are likely to own at least some of the contents of the let property, the insurance policy may also provide cover against loss or damage of such items;
• the contents may be limited to items such as furniture and furnishings in common areas or include all the landlord’s contents in a furnished let – your contents insurance may be adjusted accordingly;
• cover for your tenants’ possessions typically needs to be arranged by themselves;

Landlord liability insurance

• where let property insurance offers an especially important element of protection is in so-called landlord liability insurance;
• as the landlord you have a duty of care towards your tenants – if one of them, a visitor to the let premises, a neighbour or a member of the public suffers an injury or has their property damaged in some connection with the property, you may be sued for compensation;
• landlord liability indemnity insurance offers indemnity against claims which may be made by tenants, their visitors, neighbours or members of the public who have been injured or had their own property damaged through some contact with the let property, for which they hold you, the landlord, liable;
• claims such as this may assume substantial proportions – especially if physical injuries are concerned – and the liability insurance incorporated into landlord insurance typically provides at least £2 million of cover. With our landlord insurance cover, there are also options to increase this element of protection up £5 million worth of cover;

Compensation for loss of rental income

• your buy to let property is a principal business asset – from which the income stream is generated by the rent you collect from tenants;
• if a major insured event occurs and the property becomes temporarily uninhabitable, you stand to lose that rental income until the completion of the necessary repairs and reinstatement;
• some landlord insurance policies typically offer compensation for the loss of rental income (up to prescribed limits, typically calculated according to the total sum insured under your policy) in the event of the property becoming uninhabitable – and therefore unlettable – following a major insured event. This is known as loss of rent insurance;
• it is important to note that not all landlord insurance cover includes loss of rent cover as standard.

Quick summary of insurance for landlords

Landlord insurance may not be a legal requirement (though it may be a condition of any buy to let mortgage you have on the property), but without it, you run the risk of financial losses at least equivalent to the value of your investment in the property.

In brief summary, therefore, here are the key benefits of arranging landlord insurance:

• the risks you face as a landlord are simply different to those of an owner-occupier – for example, you have tenants and that may bring a range of risks and issues that typically will not apply to an owner-occupier;
• your property is also a business concern, even if you also live in it yourself – that means that, in effect, you still require a form of commercial landlord insurance;
• as a result, you are asking the insurance provider to deal with an entirely different set of risk circumstances, and they need to provide policies that will cover those risks for you;
• therefore, it is illogical to expect a landlord insurance policy to be broadly the same as an owner-occupier policy and sold at the same price;
• note that the moment you rent out even a part of your existing home, any standard owner-occupier policy you have in place typically becomes invalid – something well worth bearing in mind even if you rent out a room or two during the holiday season;

• keep in mind also that if your property stands unoccupied for more than 30-45 consecutive days, then any standard landlord’s insurance or even owner-occupier home insurance may become invalid and you will need to consider unoccupied property insurance;

• unoccupied property insurance (also known as vacant property insurance) is one area where the position for landlords and owner-occupiers may be identical, as a similar condition may apply in a standard owner-occupier policy;

• if you are still tempted to try and make do with owner-occupier cover, remember that insurers have ways of checking the occupancy status of any property where an insurance claim has arisen – making a false declaration may not only lead to your claim being refused but you may find it difficult to obtain insurance in future (it may also, in some circumstances, be an offence);

• so, it may pay to think carefully about a landlord insurance policy and to avoid dismissing it as unnecessary!

There is a compelling argument, therefore, for arranging suitable landlord insurance from the moment you begin letting any property to tenants.

The continued spread of COVID-19 and the social distancing measures that have followed in its wake quite rightly grab most of the headlines these days.

But people still own property that they live in, have tenants, and continue to manage their mortgages. So here are some of the latest snippets of news on these and related subjects.

Property owners rush to remortgage

With no early let-up of the coronavirus emergency in sight, these are uncertain and difficult times.

For anyone in enforced unemployment or reduced working hours, paying the mortgage is going to be a major worry.

That may help to explain a recent surge in remortgage applications, reported by Landlord Today on the 3^rd of April, as homeowners look to secure more competitively priced deals in an attempt to reduce their monthly repayment commitments.

Favourable deals may be more plentiful since the decision by the Bank of England on the 11^th of March to reduce the base lending rate from 0.75% to its lowest ever 0.25%.

Coronavirus and Universal Credit advice for landlords

On the 2^nd of April, the Residential Landlords’ Association (RLA) drew attention to a guide for landlords recently published by the Department for Work and Pensions (DWP) on Universal Credit which might be claimed by some tenants.

The DWP’s newsletter reminds landlords of the application process which a tenant may need to make before receiving Universal Credit, and the special measures – including the suspension of Job Centre appointments – introduced because of the COVID-19 emergency.

The newsletter also reminds landlords of the suspension of any eviction of tenants in social or private rented accommodation for the next three months, in return for a similar buy to let mortgage repayment holiday for landlords.

The DWP has also updated the procedures through which landlords may directly receive the rent support component of a tenant’s Universal Credit payments. Such Alternative Payment Arrangements (APAs) may be granted by the DWP only if the tenant has defaulted on the whole or part of the rent due during the past two months or previously qualified for direct payment of their Housing Benefit directly to the landlord (and their circumstances have not changed since).

What should you do if you are halfway through a renovation project?

On the 2^nd of April, online property listing website Rightmove relayed advice from both the government and the Federation of Master Builders (FMB) about what to do if you started a renovation project on your home before the outbreak of the current coronavirus crisis and the building works are not yet complete.

Safety first dictates the need to maintain social distancing wherever possible. That means:

• renovation work must stop in any home where the residents are self-isolating or are especially vulnerable (because of their age or underlying health conditions, for example);

• the only exception is where emergency repairs may be needed – to prevent a home from being flooded by an escape of water, for instance;

• no building work – including emergency work – should be done by a builder or tradesman who has coronavirus symptoms, however mild those may be;

• if both the resident household and the builders are all free from any coronavirus symptoms, renovation works may continue as normal; but

• the FMB has said that half of all builders have already stopped at least 75% of their commissioned work – 80% of which involves domestic renovation.

If you are a homeowner awaiting the completion of renovation work, therefore, exercise care, caution, patience and understanding before insisting that the work be done right now.

Spring has sprung – navigating property maintenance

The coronavirus emergency has not stopped the changing seasons – although it might have affected the way you approach seasonal maintenance and repairs to your let property, suggested guidance from the National Residential Landlords’ Association (NRLA) on the 2^nd of April.

In essence, the advice boils down to the fact that there has been no change in your responsibilities as a landlord to maintain your let property in a good state of repair.

That means continuing to conduct the property inspections you would normally expect to make at this time of year – and arranging any necessary repairs and maintenance arising from damage during the winter.

But the necessary inspections and works must also be balanced against the need to keep you, your tenants and the relevant tradesmen safe from exposure to the virus during these times of social distancing and self-isolation by affected or vulnerable members of the population.

As the country faces the biggest lockdown it has ever experienced, the measures taken against the spread of the coronavirus affect everyone. That extends to the private rented sector, where landlords and tenants are in this together.

The shared interests of landlord and tenant are recognised in an article by the Residential Landlords’ Association (RLA) on the 24^th of March 2020. With an ever-present possibility of needing to self-isolate, tenants more than ever need the security of their rented accommodation. For landlords to continue to provide that security of tenure, they in turn need to rely on steady rental income – or suitable financial support.

Financial support for landlords and tenants

The RLA welcomes the steps taken by the government to encourage buy to let mortgage lenders to allow repayment holidays – of up to three months – when landlords experience financial difficulties because their tenants need to self-isolate or have lost their jobs.

In return, landlords should be reasonably expected to grant a rent holiday to any of their tenants who are in financial difficulties because of the coronavirus lockdown.

Tenants have also been granted concessions if a landlord wants to repossess their let property. The period of notice that the landlord must give of any such intention has been extended from two months to three months during the current emergency. The move has not gone down entirely well in all quarters. The Guardian newspaper on the 24^th of March, for instance, reported complaints that evictions had not been banned – and tenants have simply been given “longer to pack their bags”.

Tenants on Universal Credit

Tenants who fall sick, have to self-isolate, or lose their jobs will be faced with a raft of financial difficulties, including the payment of rent.

To help them through these difficult times, therefore, the RLA is also asking the government to consider temporarily shelving the current requirement for claimants to wait five weeks before the receipt of their benefits. The first payment should be made far sooner, says the RLA.

Income tax relief on mortgage interest repayments

Since April 2017, income tax relief on mortgage interest repayments has steadily been withdrawn from landlords. With each new tax year, the amount of relief that can be claimed has been lowered. The beginning of this year’s new tax period in April is scheduled to see the relief removed altogether. It will be substituted with a tax credit equivalent to 20% of mortgage interest repayments.

The new tax regime results in many landlords paying considerably more in income tax. Those on higher or additional rates of income tax, for instance, had effectively received 40% or 45% tax relief respectively.

So that at least some landlords continue to receive more of the income they generate from rents, therefore, the RLA has asked the government to temporarily suspend the final stage in the withdrawal of income tax relief on mortgage interest repayments.

Routine inspections of let property

To reduce the risk of spreading coronavirus infections, the RLA is also pressing for a suspension of routine management inspections of let property – including those needed for the licensing of new properties.

Not only should inspections be temporarily suspended, but so too should non-essential building works that are prompted by local authority enforcement action – for the health protection of tenants, landlords, and their contractors.

Your property may be unoccupied for periods of time. In terms of your insurance cover that might not be an issue – but it may become one.

It’s worth reading on to be sure you’re clear as to the difference. But first, why do properties become unoccupied and when are they classed as unoccupied?

Why properties become unoccupied

There could be any number of reasons why your home or a property you own or are responsible for becomes unoccupied:

• the death of a relative means you’ve inherited a property – whether it’s furnished or empty. You may also be legally responsible to protect the value of the property if you’re an executor of a will;
• your new tenants have notified you at the last moment that they won’t be moving in;
• you’re unable to let the property when planned due to over-running re-decoration or other works;
• your tenants have notified you of their intention to take an extended overseas trip for business or pleasure purposes;
• it’s proving difficult to find tenants – for whatever reason.

In cases such as these, after a set number of consecutive days, specialist unoccupied property insurance is typically required.

Why is this?

A typical landlord buildings and contents policy (and a standard home insurance policy too for that matter) will only maintain its full protection of your property for a specified maximum number of consecutive days without someone in residence. There may be some variation here from one policy to another but typically that period ranges from 30 days to 45 days or even 60 consecutive days.

In terms of insurance, your property may become formally unoccupied in the eyes of your insurer once it passes that specified number of days without tenants being in place or someone living there. Or if a policyholder dies, any existing home insurance could immediately have reduced protection.

What are the risks that an empty property may face?

Some of the problems most frequently encountered by owners of empty or unoccupied property – aside from storm, flood and fire etc. – may typically include:

• if it is normally let – whether for residential or commercial use – there is, of course, a loss of rental income; but
• significant threats also come from vandalism, squatters, arsonists, fly-tipping and graffiti;
• within the last decade, squatting has been made illegal, but this has done little to reduce the number of squatters, which is still an issue;
• in addition to wilful damage, empty properties are also vulnerable to the need for initially minor repairs and maintenance to develop into major incidents – and serious damage – if left unnoticed and unattended;
• in time, any one or all of these problems are compounded as concerns are shared by owners of nearby properties and the neighbourhood in general enters a downward spiral of decline.

When is a property classed as unoccupied?

As we touched on before, the cover which normally protects an owner-occupied residence, a buy to let residential or commercial premises typically lapses or is severely curtailed once the premises have been unoccupied for a given length of time.

In the case of owner-occupied residential property, for example, this interval may be as short as 30 consecutive days since no one has been living there. The precise interval may vary from one insurer to another, but any cover for any type of property is likely to lapse or become significantly restricted after a period of, say, 30 days to 60 consecutive days.

Once your property becomes defined as being formally unoccupied by your policy, elements of the cover provided might typically change or cease.

That could leave you exposed in terms of the totality of your financial protection.

It happens because insurers broadly regard an unoccupied dwelling as being at higher risk of certain types of peril than those that are occupied. For example, it’s generally recognised that unoccupied properties are far more attractive to criminals, such as burglars, than those with people in them.

As a result of these increased risks, your insurer will limit the period of time they’ll maintain full coverage on your house once it’s unoccupied. A standard policy’s cover will usually be sufficient to cope with a normal duration holiday and most tenant changeovers but it’s important to take steps to protect your interests if you look likely to exceed the specified number of days.

It’s worth noting that in some cases, such as if your property is undergoing extensive renovation and building work, it may be advisable to consider specialist renovation insurance. We’d be only too happy to advise you on that and would welcome your call or email contact for a further discussion.

What that means for you

Appropriate unoccupied house insurance is half of the story – the other half is down to you in helping to reduce the risks. As with any other form of general insurance, an insurer has the right to expect you to take all reasonable measure to help mitigate the risk of loss or damage.

In respect of an empty property, therefore, you may be expected to take some or all of the following precautions:

• fire is clearly one of the major hazards, so you need to make sure that obviously combustible materials are kept well clear of boilers and stoves;
• utilities – water, gas and electricity – may need to be turned off and, in the case of commercial property, securely locked into the off position to prevent them being turned on by accident or maliciously (excepting those utilities that are used for security purposes etc);
• fire and intruder alarms may be fitted to detect potential dangers and to sound the alert if there are intruders or services have been tampered with;
• regular inspections and visits to monitor the state of security and maintenance are important whether the property is your own home, holiday home, or let residential or commercial property;
• to strengthen your position with the insurers in the event of a claim, it may be mandatory to show a written record of the visits and inspections that have been made;
• having secured and locked your vacant property, it is important that reliable key holders are found to provide access in the event of an emergency – depending on the nature of the premises, you may also need to keep a clear, written record of those key holders;
• once again, depending on the nature of the building, you might want to consider who needs to know that it is going to lie empty – apart from your insurers, these might include the police, fire brigade and utility companies, who may need to be informed of contact details for your keyholders;
• an empty property still needs to be maintained and kept in a good state of repair – remembering that the risks may increase during the storms and freezing conditions of many winters.

Playing your own part and keeping your vacant property adequately protected by unoccupied home insurance may help to safeguard what is likely to have been a very significant investment in the purchase of the premises.

What to look for in your unoccupied property insurance

First and foremost, you need to satisfy yourself that the policy provides the cover you need. Fortunately, unoccupied property insurance is generally flexible enough to be tailored to suit your particular needs – from relatively basic to fully comprehensive cover.

You might also want to consider how long you are going to need this special form of protection to last. Once again, a benefit of unoccupied house insurance is its flexibility in the period of cover you may arrange. It may be short-term cover, for example, allowing you to buy insurance for 3 or 6 months, rather than the customary full 12 months.

You might want to make especially certain that your unoccupied property insurance also provides sufficient indemnity against property owner’s liability claims – which may arise if a member of the public is injured or has their own property damaged after coming into contact with your empty property. Indemnity of at least £2 million is typically provided. That action involves considering unoccupied property insurance.

We are experts in providing unoccupied property insurance and landlord insurance

Cover4LetProperty offers online insurance quotations and over the ‘phone for your unoccupied property insurance. we have a range of policies, meaning there is one to suit your budget and your cover requirements.

Please read our guide to unoccupied property here or view our short video entitled: Do I need a specialist unoccupied property insurance policy?

If you own or are responsible for insuring a commercial property, then, especially in the current circumstances, you must check that your property has the correct insurance.

With many businesses temporarily closing – leaving them unoccupied for a period of time – the protection offered by a commercial buildings insurance may become severely restricted. In some cases, it may lapse entirely.

This is because, when your property’s unoccupied, statistically it suffers a higher risk of damage from flood, leaks, arson, burglary, vandalism and perhaps squatting. And no one is there to notice if there is a small leak, for example, which, left unrepaired can cause extensive damage, or to act as a deterrent to burglars etc.

This higher risk typically won’t be covered by your commercial property insurance, so the first thing you need to do if your property will be unoccupied is to check what your current policy entails.

Check what your current insurance policy covers

Policy features, benefits, terms and conditions vary depending on your insurer and product type. Check the terms and conditions of your commercial property insurance carefully since many insurers restrict or remove cover altogether once the building has been unoccupied for a given period – a period which varies from one insurer to another, but typically is around 30 consecutive days.

Once you have reviewed the exact provisions of your existing commercial property insurance, you may need to consider unoccupied property insurance to restore the level of protection you require for the building, its contents and your liabilities as the property owner.

It is also important to note that if you have a mortgage on the commercial property, it may be a condition of your mortgage agreement that you have adequate, valid buildings insurance cover at all times. Failure to do could see you in breach of your mortgage contract, which can have serious consequences.

What should you do if your commercial property will be unoccupied?

Firstly, speak to us so we can arrange specialist commercial unoccupied property insurance.

Secondly, ensure you understand what all your obligations are under the terms of your unoccupied property to ensure full cover continues. Generally, you will be obliged to carry out certain activities during the period of unoccupancy. These may vary on a policy by policy basis, but in most cases,  you will need to:

• regularly check the building (usually once a week) and maintain a log of these visits;
• ensure that any utilities are turned off (except those needed to power security and fire alarms);
• keep the area and yards around the building free from waste and refuse;
• ensure the building is properly secured, with all alarms turned on and locking devices in place.

Further reading: Commercial property insurance.         

Do you have any questions?

Then please contact us – we’d be delighted to help.