For any property owner who needs to leave their home, buy to let or commercial property empty for more than a month or so, unoccupied property insurance is imperative.

Here are some of the most frequently asked questions we receive on the subject of unoccupied property insurance here at Cover4LetProperty – which you might want to read in conjunction with our comprehensive Guide to Unoccupied Property.

For easy viewing, you might even want to watch our video on the subject of whether you are likely to need a specialist unoccupied property insurance policy.

What is unoccupied property?

As with many other terms in common usage, insurers have a particular definition of what it means for a building to be “unoccupied”.

Typically, if the premises have not been continuously lived in or occupied while in use for 30 to 45 consecutive days, it is considered to be unoccupied. The exact period may vary from one insurer to another, but 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 switch to unoccupied property insurance. This can apply to both landlords and owner-occupiers.

How do properties become “unoccupied”?

A property may be considered by an insurer to be unoccupied if:

• it has been let to someone, but they give notice and leave. It can be difficult to re-let properties in a short space of time. Once the property has been empty for 30-45 consecutive days or more, with most insurers it is classified as being “unoccupied”;
• the property 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;
• you have to work away from home for longer than a month or are taking an extended holiday; and
• when refurbishments take longer than expected. Unfortunately, building, decorating, plumbing and electrical works are prone to overrun. So, if you have left your property vacant while major works are going on, you may wish to keep an eye on the calendar to avoid becoming suddenly in need of unoccupied property insurance in a hurry. Depending on the work being carried out, you may renovations insurance.

Why is the definition of unoccupied so important to insurers?

Insurers attach such great importance to knowing when a property is unoccupied since it is considered to be more vulnerable when it is empty and at greater risk of loss or damage.

The risk of loss or damage is key to insurers’ decision-making, of course, so the increased risk inherent in an unoccupied property is a major concern to insurers – as it is also to the property owner, of course.

Why do unoccupied properties present more risks?

With a bit of luck, your unoccupied 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 unoccupied property insurance – or in fact any empty property insurance at all.

But insurers may 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.

And empty properties may attract the unwanted attention of thieves, intruders, squatters and even arsonists.

Do I have to have unoccupied property insurance?

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 unoccupied property insurance, you may find that the insurer may not pay out if something were to happen on the grounds that the existing policy would be void if the property were unoccupied.

You should also note that if you have a mortgage on the property, in most cases it will be a condition of your mortgage agreement that adequate buildings insurance is maintained at all times.

How much does unoccupied property insurance cost?

The price of any kind of insurance you buy is always likely to be an important consideration.

But, as with all financial products, one man’s cheap insurance may be another man’s “basic”, and different property owners may undoubtedly be looking for different things for their money.

The key thing about any kind of insurance policy may be to find one that suits your own individual requirements at a price that meets your expectations.

The trouble with empty properties is that property owners rarely intend for them to be that way. Yet if you own a flat or a house, you may easily find that it has remained unoccupied for at least 30-45 days – at which point it typically becomes “unoccupied” for the purposes of insurance.

Your empty property insurance options may include just the very basic of cover – covering risks such as fire, lightning, explosion and aircraft (often known as FLEA cover) or you may wish for more comprehensive cover that provides the same level of protection as your existing property insurance.

Cover4LetProperty offer online quotations for your unoccupied property with insurance companies with whom we have arranged exclusive schemes.

In addition, we have ensured that our policies offer you a range of benefits depending upon the level of cover you are looking for.

Please free to obtain an online quote or contact us on 01702 606301 for further information. We’d love to help!

Landlords face yet another increase in their normal operating costs come the 1^st of June, when the Tenant Fees Act 2019 comes into force.

After that date, it becomes illegal for landlords or their letting agents to charge fees to new and renewing    tenants for a wide range of services, reiterated by the Residential Landlords Association (RLA) in an article dated the 1^st of May, such as:

• credit reference checks;
• drawing up and conducting Inventories;
• administrative charges;
• cleaning services;
• gardening maintenance;
• the charging of a fee for compulsory professional cleaning services at the termination of a tenancy; or
• for providing a written reference on behalf of a former tenant.

The tenancies covered by the new law

At the moment, the new law will apply only to new tenancies and the renewal of existing tenancies, with the exception of statutory and periodic tenancies determined by contract after the 1^st of June 2019.

One year from now, however, the ban on tenant fees will extend to all tenancies, including pre-existing ones.

Deposits

In addition to the ban on fees, the new legislation also limits the amount that landlords and their agents may charge for deposits.

From the 1^st of June, the maximum deposit that may be requested – if the annual rent is less than £50,000 – is the equivalent of five weeks rent. If the annual rent is more than £50,000 maximum deposits are set at the equivalent of six weeks rent.

Holding deposits are also restricted to a maximum of one week’s rent. The legislation regarding the repayment of such a deposit if the tenancy does not go ahead is awaiting the statutory legislation.

The cost to landlords

The financial cost to many landlords should not be underestimated. In a story published by the Financial Times on the 13^th of February 2019, it was estimated that when taking into account all the fees that may currently be charged, landlords and their agents are collecting anywhere from £40 to £813 – with an average in London of around £400 for a two-person household.

The correspondent in question revealed that she had recently paid £90 per person for reference checks, £180 on an administration fee, and a further £198 payable when she moves out on termination of the tenancy – a total of £360.

Any landlord or agent in breach of the new law – who illegally charges a tenant fee – may be ordered by the courts to repay the tenant and be fined up to £5,000 for a first offence. If further breaches are subsequently made, the fine may rise as high as £30,000.

Pressure groups have already argued on behalf of landlords and letting agents that an inevitable consequence of a ban on charging tenant fees directly is likely to be an increase in rent to recover the lost revenue.

Wales

The Tenant Fees Act applies only to England. The Welsh Assembly has recently passed similar legislation, which will come into force on the 1^st of September 2019.

Scotland

Very similar legislation – the Housing (Tenancies) (Scotland) Act 2016 – is already in force north of the border.

Here we take a quick look at the latest news from the UK property sector.

What do renters want when moving to a new area?

New data shows that nearly four out of five (79%) of Brits believe that good food delivery options are a high priority when choosing a new home.

While, previously, access to good schools and transport links, plus low crime rates, were high on renters’ “must-have” lists, the study highlights that a new trend has started – that of potential tenants downloading food delivery apps during property viewings.

Zoopla’s study highlighted that almost 75% of 16-29 year-olds surveyed regretted not looking at their food delivery options when viewing a property. 55% said they would make sure they do so next time.

House prices in London are falling, and rents soar

The latest UK House Price Index from the Land Registry shows that property prices in London are dropping with the price falling to £459,800 in February – a 3.8% year-on-year decrease.

Reporting on the data, Which? says that as house prices in the capital are dropping, the average monthly asking rent of £2,093 has soared by 8.2% year-on-year.

The reason for the rental increase is that fewer properties are coming on to the market, as regulatory changes have forced some landlords to quit the sector.

Which? expects the trend to continue with the upcoming tenant fees ban.

Swipe right for your dream pad

A new Tinder-style property rental platform has announced it is set to expand. The PerchPeek platform enables prospective tenants to ‘swipe’ in Tinder-style for rooms and homes. Since its launch in September last year, it has had 100,000 searches.

The service – which claims to save renters’ over 30 hours of search time – has more than 6,000 properties in both London and Guildford, with further expansion planned this year

Both letting agents and private landlords can have listings on the platform and only pay a fee when a tenancy results.

Tenants win back £15,000 rent money

Five tenants living in an HMO who had no complaints about their property or their landlord have been awarded £15,000 of their rent back.

PropertyIndustryEye reported that the five-bedroom property in Leeds “was clean, spacious and comfortable, and the monthly rent … was a reasonable £300 per person, bills included”.

Following a visit from a housing official, however, it was found that the landlord had not obtained an HMO licence – meaning that the property had been let unlawfully for eight months.

The housing officer told the tenants that while the council was pursuing legal action, they could also start a case and apply for a Rent Repayment Order.

The group stayed at the property until their tenancy ended and successfully applied for a full year’s rent back at the end of March.

Could flat-pack homes solve the housing crisis?

US bank Goldman Sachs has invested £75m in a London-based start-up that specialises in technology-led prefabricated homes.

They claim that the development of these housing modules will help solve the UK’s housing shortage.

Modular housing manufacturers TopHat was set up three years ago to design and manufacture homes in sections — or modules — that are then transported to development sites and put together.

Production of the housing modules started in 2018 and the first site to use its product is in Chatham, Kent, which is expected to open in the coming months.

Homeowners and landlords alike need to pay attention to the benefits and security offered by unoccupied property insurance – and here we’ll explain just how it works to provide continued protection for the home or buy to let property in which you have invested.

You might want to read this in tandem with our comprehensive Guide to Unoccupied Property, which further defines the issues of empty and unoccupied property and your need for adequate insurance.

If you are more comfortable with an audio-visual reminder, take a look at our video entitled “Do I need a specialist unoccupied property insurance policy?”.

Are you a landlord?

Unoccupied buildings insurance may be an invaluable part of your landlord insurance portfolio.

This may come as a bit of a surprise to you. You may think, for example, that your buy to let property is more at risk when you have tenants living there. After all, why else would you have bought buy to let house insurance?

Tenants are only part of the story though, because when your property is empty it may be more vulnerable to different types of risk.

The risks

Although it may not immediately seem obvious, an unoccupied property may be at rather more risk than one that is occupied.

That’s because there are a variety of things that may happen to it, that may be less likely if someone were living there.

Examples of the sorts of issues might include:

• minor problems (e.g. leaking pipes) that deteriorate into major catastrophes simply because nobody is there to spot and quickly deal with them;
• burglars typically like to avoid the risk of being disturbed, so unoccupied properties may be far more attractive to them than those that are occupied.

For all these reasons, the providers of buy to let buildings insurance (or owner-occupier home buildings and contents insurance) may not cover a property that stands unoccupied for more than 30-45 consecutive days (the actual amount of days depends on the individual insurer, so you may wish to check your policy).

Reasons why your property might be unoccupied – landlords

No landlord wants their let property to be unoccupied – you’ll be losing rental income after all – but there are occasions when such voids may be inevitable:

• you might have difficulties finding new tenants to take over the property or delays in them moving in;
• major refurbishment is being carried out to your let property;
• the property is undergoing renovations or repairs, the project might overrun, and all the time the building stands empty.

There may be people coming and going about the property on most days but if no one is living there then it will generally need unoccupied buildings insurance (also known as empty property cover or vacant property insurance).

From the insurer’s point of view

Although it may be advisable to check your own individual policy for exact details, typically insurers will not take into account why your property is unoccupied.

It may be that you were unlucky and had an extended gap between lettings or perhaps your property was unoccupied while it was being converted and redecorated.

In essence, it won’t matter – the insurance company will simply typically see it as unoccupied and they may reject any claims for problems that arose while it was officially designated as an unoccupied property.

The good news is that insurance providers will typically be able to offer you something called unoccupied property insurance (or vacant property insurance). That will cover your property should it stand empty for more than 30 consecutive days.

Some providers may offer unoccupied property insurance cover providing certain conditions are met. They may include things such as your need to periodically visit and inspect the property and to keep a log of the dates and times that you did so.

If you think it is possible that your property may stand unoccupied for more than the 30 days mentioned above, it might be highly advisable to consider this sort of additional cover.

Reasons why your property may be unoccupied – Owner-occupiers

If you own your own home, there may be occasions when unoccupied property insurance becomes equally important to you, too.

Your home might be temporarily empty and unoccupied:

• as a result of you being on a long term assignment abroad;
• while under probate;
• awaiting the outcome of divorce proceedings; or
• while you are carrying out renovations.

Insurers’ 30-45 day rules on unoccupied property continue to apply. So, if you are planning an extended holiday or business trip overseas, it might be prudent to consider whether or not the duration may affect the validity of your property insurance.

It is also worth taking note that an insurer may check the occupancy status of a property in the context of a claim. If your property was found to be unoccupied (i.e. for more than 30-45 consecutive days) then your claim may be rejected unless you have unoccupied property insurance cover.

Tell-tale signs and what you can do

As we have mentioned, for vandals and thieves, unoccupied property may be an especially attractive proposition. Overgrown gardens, unlit windows and building materials lying around, are all good indicators of an unoccupied property – and your need for unoccupied buildings insurance.

Trying to keep your home or buy to let property looking lived in may help as a deterrent in many cases. This could entail keeping the garden tidy and the grass cut or arranging for lights to come on at night.

Your neighbours or even the most unreliable of tenants may probably intervene if there was a problem with your house – so, you would catch that small leak or missing slate early before they got worse and caused possibly significant damage to the fabric of your property.

Making regular inspections of your property and carrying out necessary repairs may help prevent a minor problem turning into a major and expensive disaster. You may find in any case that regular visits to your unoccupied property may be obligatory as part of your empty property insurance.

Unoccupied property insurance – is it worth the expense?

Nobody likes the thought of needing to buy additional insurance. Yet cheap unoccupied property insurance might be something that is well worth taking seriously.

Here’s why:

• whether you are an owner-occupier or a landlord, your buildings and contents insurance will typically only cover your property if it is defined, in insurance terms, as being occupied;
• as we have explained, if a property is empty for more than 30 consecutive days, then your insurer will typically define it as being ‘unoccupied’ and any existing home buildings and contents insurance (either owner-occupier or landlord’s insurance) to be invalid;
• insurers may regard a property that is unoccupied to be at higher risk from things such as cumulative damage arising from a leaking pipe or broken window. There may also be additional risks from things such as burglary and vandalism, as the perpetrators often have techniques they use to spot an unoccupied property (which reduces the chances of them being disturbed while engaged in their criminal activities);
• properties may slip into this designation more easily than you would think. Examples might include unexpected delays between lettings or renovation and conversion works overrunning etc;
• there are insurers offering what they may call cheap unoccupied property insurance to provide a continuity of cover should your property slip into the unoccupied category;
• to be clear on definitions, an unoccupied property is one that is, as the name suggests, simply unoccupied – it does not have to be empty in the sense of its being unfurnished. It is perfectly possible for a fully furnished and well-equipped property to meet the definition of being unoccupied;
• not all cheap unoccupied property insurance is identical and there may be significant variations between the products of various insurers. For example, most unoccupied property insurance may require that you periodically inspect the unoccupied property and keep a log that you have done so. Some cover of this type may also insist that certain anti-intruder measures are adopted including the maintenance of external features such as gardens and the fitting of time switches to lights etc;
• it may also be worth noting that typically insurers will not consider any justification for a property being unoccupied. In other words, if you do not have unoccupied property insurance cover and your property passes the 30-45 days unintentionally (e.g. if you are delayed letting your property because of family troubles) then your insurance may still become invalid.

Given the sums that you have invested in your property, taking chances in the area of unoccupied property insurance might not be advisable.

Of course, what is cheap empty property insurance for one person may not be cheap for you and you may prefer to adopt an approach that concentrates on the depth of cover provided rather than exclusively on finding cheap unoccupied property insurance.

Consider the price

Of course, you are likely to consider the price of the premiums when comparing unoccupied property insurance and settling on a particular policy to buy. But we would stress that price alone is not your only consideration.

The single most important aspect of your buy to let insurance is typically the cover it provides and the financial protection that comes with that.

Although the imperatives of saving money are ever-present, it is still typically advisable to concentrate on trying to ensure that your home or landlords insurance in total, including unoccupied property cover, offers you a range of benefits that are suitable for your individual situation.

Inevitably, what is cheap for someone else may prove to be unsuitable and therefore not cheap, for you.

So, while the search for the cheapest unoccupied property insurance may be understandable, all of the factors that we have considered in this article need to be kept in mind at all times.

Here is our latest quick news round up for landlords and property owners.

Government plans to axe Section 21

The biggest threatened shake-up of some of the very foundations of buying to let came with the news reported by the Residential Landlords Association (RLA) on the 14^th of April that the government is planning to abolish Section 21 of the Housing Act.

Currently an essential tool for landlords who need to repossess their property, the RLA argues vehemently that any such abolition of Section 21 notices is likely to backfire. Without recourse to a quick and easy way of legitimately repossessing properties from tenants who fail to pay their rent or engage in anti-social behaviour, many landlords are likely to lose confidence in investing in buy to let property.

The result is likely to be a further diminution of an already inadequate stock of private rented accommodation, they say.

£4,000 – the additional costs associated with moving

If you were surprised by the extra costs – on top of actually buying the home – when moving house, you are not alone.

A report in Property Wire on the 15^th of April revealed that the average additional costs paid by those moving home comes to nearly £4,000 – with half of that going on legal fees alone and the remainder made up of expenditure on furniture, furnishings and appliances.

Some 40% of homebuyers admitted to being shocked by these extra costs and a third of those surveyed said they had had to borrow to pay for them.

Sharp decline in the number of BTL landlords in London

The introduction – in April 2016 – of the Stamp Duty surcharge on second homes may be to blame for a dramatic decline in the number of buy to let (BTL) landlords in London, said Landlord Today on the 15^th of April.

Whereas property investors based in London have previously looked to buy homes in the capital, close to where they live, in the past year a surprising 59% of them have instead invested in property outside the capital (considerably up from the 25% or so who did that in 2010).

An estimated 34% of London-based property investors turned to buy to let accommodation in the North of England and in the Midlands – compared to just 14% of them who did so in 2010.

The top ten “must haves” homebuyers want

Have you ever given a second thought to the search terms you use when searching on the internet for property to buy?

On April the 9th, online estate agents Rightmove revealed the top ten keywords and filters used by visitors to their website.

The most popular search terms were words such as annexe, garage, and acre, but also included some unusual keywords like coach house, chapel and castle.

In searches for “must have property” information, respondents focused on subjects such as “amazing property”, DIY advice and home renovation, local area guides, housing market data, and features about the private rental sector.

What is it and what does let property insurance cover? In fact, protecting your let property – and your income along with it – may be easier than you imagined.

Let property – or landlord or buy to let insurance, as you might also see it described – is designed to do just that: to safeguard the investment you have made in let property and to defend the income you are receiving from it.

Do I need landlord insurance?

Let property insurance may not be mandatory for landlords. As a tool though to help protect your business and your investment, it may be invaluable.

Do note that if you have a mortgage on your investment property, then typically it will be a condition of your mortgage agreement that you have adequate buildings insurance to protect both you and your lender’s financial interest in the property.

What does let property insurance cover?

Your property may be susceptible to damage from a variety of events known in insurance terms as risks or perils.

Landlords buildings insurance can provide financial protection from these perils which might typically include events such as:

• storms and flooding;
• fire and smoke damage;
• lightning and earthquakes;
• damage from subsidence (may be included as standard on some policies, such as ours, but not all providers offer this cover as standard).

The building and its contents

Your property and the contents you own are not just vulnerable to being damaged from the natural events above.

Accidents involving human intervention are also obviously very common and policies typically cover accidental damage as standard.

Hopefully, less common are tenants that maliciously cause damage. That can have a significant financial impact for any landlord.

You may find though that there are some let property insurance products (but by no means all), which do provide cover for this type of vandalism. We are pleased to say that we offer this cover as a standard part of our landlord insurance policies.

Compensation for loss of rental income

Any of these events could result in damage that renders your property uninhabitable until repairs have been carried out. Your tenants may have to move out and that could obviously result in a loss of rental income for you

There are some buy to let insurance policies, such as ours, which could compensate you for this loss but only if it was the result of an insured risk, and up to set limits.

So, for example, your tenants moving out and leaving rent arrears will typically not be covered.

Landlord liability insurance

Public liability insurance, typically provided as part of property insurance for buildings, may be another important financial shield for any landlord.

A slate may fall off the roof of your property and cause damage to a neighbour’s property or worse still, cause bodily injury. The injured person could decide to sue you for damages.

If a court decides in their favour, then public liability insurance (assuming you have it) can cover both the court award and any legal expenses arising.

Not all things are equal

By describing some of the common elements of cover provided by buy to let insurance, we may have given the impression that all policies are more or less the same and that all things are equal.

That is certainly not the case.

Different people, different properties, different cover

When margins are tight, you may be keen to keep costs down and trying to make some savings by buying cheap let property insurance may be something that you are very keen to achieve.

While this may be completely understandable, it may be prudent to bear in mind that there may be more to low cost landlord insurance than just premium price. So, while what you may have to pay out for your buy to let cover is obviously extremely important to you financially, the cover that your cheap let property insurance actually provides is likely to be just as important.

That is why it is important to remember that no two landlords may have exactly the same property or the same requirements when it comes to buy to let cover – what one landlord may consider to be cheap buy to let insurance cover may not be something that you may consider to be appropriate or cheap for your situation.

It may be that some forms of cover that you may not need, like landlords’ contents insurance, may be included or some other feature, like cover for subsidence damage, may be missing.

You need to compare let property insurance to identify those policies which include elements of cover as standard and those where you may need to pay for the inclusion of optional extras.

Some of the areas where you may find policies differ might include whether or not:

• malicious damage by your tenants may be covered as standard (and up to what limits):
• there are any provisions for compensating you for loss of rental income if your tenants have to vacate your property while you carry out repairs to insured risk damage;
• damage caused by a tradesman locating and fixing an emergency maintenance problem is covered – this may be referred to as trace and access cover;
• there are restrictions on the types of tenants you may be able to let to – some policies may decline to cover students for example.

You might want to bear in mind that if your property is standing empty, then any existing cheap let property insurance that it has may cease to be adequate cover should the period extend beyond 30-45 consecutive days (the period varies depending on your insurer, so if you are unsure, check your policy document).

In these circumstances and other circumstances, you may need to purchase unoccupied property insurance to maintain the continuity of your cover. We will of course be very happy to discuss which is the most appropriate and cost-effective landlord’s insurance for you, so don’t be shy, please get in touch!

Why choose landlord insurance from Cover4LetProperty?

By way of a little background before you get in touch, you might want to know this about Cover4LetProperty.

We offer online quotations from a range of leading let property insurance companies with whom we have arranged exclusive schemes that are only available to Cover4LetProperty customers.

In addition, we have ensured that our policies are all-encompassing and do not encumber you with expensive add-ons which you do not require.

For example, all our occupied let property insurance policies offer malicious damage cover for damage caused by your tenant – you would be surprised how many let property specialists do not include that level of cover.

Our landlord insurance quotations are displayed clearly and highlight to you the major benefits or exclusions for the quoted let property insurance company. You can view the policy summary and key facts documents and easily see the policy excess which is being offered.

Alternatively, you can always call us for a quote or if you have any questions on 01702 606301 – we’d be delighted to help!

For all the uncertainty and instability in other sectors, the property market and prospects for buy to let landlords remain as buoyant as ever.

Bearing this out, here is our latest round-up of some of the latest property and landlord news stories.

Which cities are best for young renters?

Just ten years ago, 73% of households owned their own home, now it is just 63% – the percentage is even lower among the younger generation, revealed a recent study – meaning more households must rent. But where?

The research rated the top 10 cities for renters in terms of average earnings, rates of employment, house prices, and average rents for a one-bedroom flat – to provide some surprising results. Glasgow, for example, topped the list because, though earnings are only average, property prices are cheap and so rents are low. In second-placed London, on the other hand, both wages and property prices are high, so, for landlords, rental yields are also high.

Bristol and Gloucester take the middle spots and Middlesbrough comes in at number 10.

New energy laws not affordable for one in three landlords

New Minimum Energy Efficiency Standards (MEES) came into force for landlords with effect from the beginning of this month and a third of them cannot afford the work needed to bring their let properties up to scratch, said the Telegraph newspaper on the 1^st of April.

The new rules mean that any property let for the first time must achieve at least an E energy rating – so ratings F and G disqualify landlords from letting the accommodation, on pain of a fine of up to £5,000.

The Residential Landlords’ Association (RLA) has calculated that the average cost of the alterations that need to be made by affected landlords is £5,800.

Where the actual costs exceed £3,500, landlords may apply for exemption from the new rules, so it may be that councils should expect a flood of such applications.

BTL mortgage costs remain stable

While the face of the mortgage market may be changing, the cost of buy to let mortgages has remained more or less constant and stable over the past 3 months, according to a press release from the Mortgage Brain.

While the cost of a 70% loan to value (LTV) five-year fixed buy to let mortgage and a 70% LTV tracker mortgage fell by 1% and 2% respectively, 70% LTV three-year fixed-rate mortgages rose by 2% – changes that point to overall stability in the market.The analysis also revealed the price differential between buy to let and regular residential mortgages. This ranges from as much as 25% to as little as 8% higher for a buy to let mortgage, depending on the TV, the length of any fixed-rate, and whether it is a tracker mortgage.

Commuters will move home in order to be closer to work

Commuters are likely to move home to reduce their journey times into work, suggests a study cited by the Property Wire on the 4^th of April.

By shortening their commute and moving closer to their place of work, 70% of people surveyed believed that moving home would lead to an improved work life balance.

This contrasts with 8% of people who are already living in rural settings and the report noted some marked regional differences. Though 47% of those working in London would consider moving home, for example, only 40% of Birmingham’s workers would do so, 37% in Oxford, and 33% of those who work in Newcastle or York.

City-dwellers least likely to think about moving closer to work, on the other hand, were found to be those living in Southampton, Aberdeen or Belfast.

It’s rarely a quiet period for new developments and issues likely to affect buy to let landlords. If you want to stay abreast of some of the latest news affecting your business and keep one step ahead of your rival landlords, just read on …

The new Homes (Fitness for Human Habitation) Act 2018 – what classes a property as unfit?

The new Homes (Fitness for Human Habitation) Act 2018 came into force on the 20^th of March. What impact might the legislation have on you and what does it take to make your let property unfit?

Your tenants now have the right to sue you in local courts if you do not adequately maintain your property.

An article in Landlord Today on the 19^th of March published the lengthy list of potential issues – including everything from the use of asbestos and MMF, lead, damp and mould, electrical hazards, water supply, Carbon Monoxide hazards, hygiene and food preparation, drainage, noise, and overcrowding.

If tenants’ take their landlords to court, then the courts will also decide whether any of the problems resulting in the accommodation being unfit for habitation have been caused by the habits and behaviours of the tenants themselves.

Legal battle over landlord not serving a gas safety certificate until after the tenancy started

The Court of Appeal will decide whether a delay in serving a gas safety certificate to tenants until after they had already moved into their rented property is sufficient to invalidate the landlord’s Section 21 notice of eviction.

Although a landlord was initially granted the Section 21 notice by the courts, the decision was appealed by the tenant, and the landlord’s right to repossession was reversed.

The dispute between landlord and tenant will now be heard in the Court of Appeal, reported Property Industry Eye on the 19^th of March.

Landlords banned from blocking benefit claimants in rental adverts

Online estate agent Zoopla, which also runs the website Primelocation, from the beginning of next month will block all listings on its sites which specifically rule out tenancies by applicants in receipt of welfare benefits.

Adverts which state “no DSS” – or words to that effect – are to be removed from listings and from the search parameters on the websites, said the Sun newspaper on the 15^th of March.

Of the total of some 4.5 million tenants in private rented accommodation, an estimated 889,000 – almost 20% – are in receipt of housing benefit.

Keeping your tenants safe

On the 18^th of March, the Residential Landlords Association (RLA) echoed a timely warning from the Home Office about the danger of fire – especially in premises rented by younger tenants.

Renewing its Fire Kills campaign, the Home Office is encouraging landlords to teach their tenants basic fire safety advice – such as never leaving unattended pans on the cooker, overloading electrical sockets, or putting heaters too close to clothes being dried.

Statistics gathered by the Home Office show that most fires in the home start in or near the cooker, typically through a chip pan or the grill catching fire, or by items such as tea towels or drying up cloths left too close to it.

Landlords have a legal obligation to install a fire alarm on every floor of their let property and to test that each device is working properly at the beginning of every tenancy.

For those landlords wanting to stay abreast of the latest developments in the private rental sector, running a business means staying in full possession of the facts shaping the buy to let environment.

So, here are some snippets of news about those latest developments.

FTB’s make up the biggest part of the UK property market over 2 decades

For the first time in 23 years, first time buyers have become the biggest players in the UK property market, according to Property Wire on the 25^th of February.

First time buyers were responsible for 372,000 purchases in 2018, accounting for more than 50% of all transactions involving a mortgage, an increase of 38% in the past ten years – and the last time the proportion of first time buyers was so high was in 1995.

The cost of the average first home has also risen by 39% – to £212,473 in 2018, up from £153,030 yen years ago.

The typical first time buyer’s deposit has also increased by 57% – to £33,252 in 2018, from £21,133 in 2008.

Tenants cause £6,000 worth of damage

Not all landlords are fortunate enough to find tenants who treat their property with the respect it deserves.

A landlord in Newport, South Wales, took repossession of his property only to be faced with an estimated bill of £6,000 to clean up what the letting agents described as “absolute filth”, reported the Mirror newspaper on the 22^nd of February.

Rubbish was strewn about the house, kitchen units were broken, cigarette ash everywhere – including the mattresses – bedding had been stuffed in the bath and the smell of the place was overwhelming. The back garden resembled a junkyard.

The house has had to be boarded up before it can be thoroughly cleaned and let to new tenants. The landlord believed that the previous tenant caused the damage maliciously after being ordered to quit the property by a court repossession order – there is no chance of his contributing to the cost of cleaning and repairs.

Landlords have the choice of 2,150 buy-to-let mortgages

If you are a landlord or prospective landlord and looking for a buy to let mortgage, Letting Agent Today had good news for you on the 26^th of February when it revealed that there are currently a staggering 2,162 different buy-to-let mortgage products available on the market.

Landlords have not had such a wide choice of buy to let mortgages since at least October 2007.

Although competition in the marketplace is probably responsible for the increased range of products, interest rates for two-year fixed-rate buy to let mortgages have increased steadily by 0.2% – to an average of 3.12% – since September 2018. Five year fixed rate products have increased by an average 0.15% over the same period.

Rents increasing for the first time since September 2018

After a period during which rent levels had held reasonably steady, many tenants are now facing rent increases, warned Landlord Today on the 26^th of February.

Amongst a survey of letting agents, it was found that 26% of landlords were seeking rent increases, compared to just 18% of them in December, in a first round of rent increases since September last year.

The increases come despite a growth in the supply of rental housing stock, but this has also been accompanied by an increase in the number of tenants looking for accommodation.

In the midst of a housing crisis and with alarming numbers of rough sleepers perishing in winter weather, it is startling to discover that there are more than 600,000 unoccupied homes in the UK, revealed House Beautiful magazine.

Roughly two-thirds of these – some 200,000 dwellings – have been empty for more than six months and to help combat the waste of such a potentially valuable resource, local authority loans and grants are available to those who already own such a property or are thinking of buying one to do up and sell on or let to tenants.

Just how such a move could let you play your part in reviving the unused housing stock – and make you a tidy profit into the bargain – is illustrated by a story that appeared in the Daily Mail newspaper.

£500,000 from a once empty property

The story recounts the experience of a couple in Kent who had inherited an empty property from an elderly relative who had moved into long-term residential care.

By taking advantage of an interest-free loan of £25,000 from their local council and contributing some of their own savings to refurbish the dilapidated home, they were eventually able to sell it on for some £500,000 – so returning the property to the modernised pool of available housing and earning themselves a handsome profit into the bargain.

From the proceeds of the sale, the couple were able to pay back the £25,000 loan they had received – loans become repayable after three years or when the property is sold, whichever is the earlier.

Local authority loans and grants

Many local authorities operate similar schemes to encourage the return of empty housing, refurbished to a decent standard, to the available stock of homes.

Some schemes may be more generous than others or have different criteria for eligibility.

In the London Borough of Brent, for example, grants are available for refurbishing empty properties, general refurbishment grants, conversion grants (for converting large empty houses into smaller dwelling units), and commercial grants (for converting unused commercial properties into housing).

In this instance, though, conditions attached to the grants mean that:

• the property must be currently empty;
• refurbishment must conform to planning permissions and building control regulations;
• when refurbishment is completed, the property must be offered for letting by the local authority for a period of at least five years; so
• the property has to comply with the council’s terms and conditions of letting.

In the northeast of England, Newcastle City Council also offers grants of between £2,000 and £10,000 to owners who refurbish housing that has stood empty for more than six months.

In Newcastle’s case, the only condition on completion of the refurbishment is that you, or your family, occupy the dwelling or it is let to private sector tenants for at least the next three years.

New Homes Bonuses

At the national level, the government also provides incentives for local authorities to create new homes from previously empty houses – by increasing financial allocations to councils based on the increased revenue they may then take from increased Council Tax.

These New Homes Bonuses are paid to councils with respect to new-build homes, conversions and the refurbishment of previously empty houses.