Buy to let landlords seem to be have been hit left, right and centre in the past year or so.

Last year, the then Chancellor of the Exchequer phased in the removal of tax relief on interest paid for buy to let mortgages, the referendum vote on the 23^rd of June 2016 has thrown the housing market into chaos and left a cloud of uncertainty over the private rental sector and, to cap it all, within the next four years, landlords are going to have to make their let properties more energy efficient.

What is the “green tax”

The government claims that taxes in a number of sectors of the economy are designed to effect environmentally friendly or “green” improvements. The fall-out for landlords is summarised in a report by the Residential Landlords’ Association (RLA) on the 2^nd of August 2016.

In the case of let property the green tax takes the form of requiring any let property to reach at least Band E on the 7-point energy efficiency rating scale for residential accommodation.

It is estimated that this new requirement will affect some 330,000 properties – typically those built during Victorian or Edwardian times – already in the buy to let market. The cost of upgrading to the new energy efficiency standards may in some cases be considerable, with landlords themselves having to contribute up to £5,000 towards those costs.

From the year 2018, any new tenancy needs to meet the revised energy efficiency requirements, whilst by the year 2020, the new standards have to be met in all tenancies.

So what has changed?

Landlords, of course, have a general incentive for increasing the energy efficiency of their properties. Cheaper energy costs for tenants may be passed on in terms of lower rents and the improvements carried out by the landlord are likely to be welcomed and help to cultivate cooperative relationships between tenants and landlords, so helping to reduce tenancy turnover and retaining happier tenants.

Landlords previously had an extra financial incentive for making these improvements – say through the installation of more energy efficient heating and hot water boilers, filling cavity walls and putting in better insulation throughout the property. Help towards the costs of these improvements was provided in the form of interest free loans from the government-backed Green Deal Scheme.

The government has now withdrawn funding for that scheme, meaning that landlords need to foot the bill for energy efficiency improvements themselves – with no choice but to make those improvements within the next four years.

Likely consequences of the changes

With landlords having to recover as much as £5,000 for each property they let, it seems pretty clear that the only way to do so is through an increase in rents – which many sections of the population complain are already too high.

Tenants continue to enjoy the benefits of energy efficiency improvements – because the energy bills they pay will be lower – but the landlord needs some way to recover the amount spent on improving the property.

Here at Cover4LetProperty we are all too aware of the increasing pressures under which buy to let landlords are struggling to operate. Their businesses already face increases in operating costs through the withdrawal of tax relief on mortgage interest, threats to further increases in business overheads brought about by a generally uncertain economic environment and, now, the removal of one small crumb of comfort in the form of loans from the Green Deal Scheme.

Energy efficiency improvements are no longer an option for the caring and responsible landlord, but have become the focus of a compulsory green tax.

It is because of those many pressures on operating costs that, here at Cover4LetProperty we do our level best not only to secure the landlord cover which the owners of buy to let businesses need, but to find the cover which is genuinely price competitive and represents good value for money in meeting those needs and circumstances.

The future

A point of view expressed on the website Landlord Zone forecasts a fairly grim few years for landlords as the country as a whole negotiates the big uncertainties of Brexit, and the effects of what appear to have been a string of punitive measures and regulations imposed by government on private sector landlords.

These adverse effects are most likely to be felt in the southeast of England and in London in particular, where some 37% of the total housing stock is now in the hands of private sector landlords.

There may be hope that there is a wind of change for the buy to let market and concessions made – especially if the rate of new building continues to slow down and more and more landlords are discouraged from investing in buy to let property in the first place.

Some landlords are fully committed buy to let investors with a view to making their living from the business. Others might have found themselves to be landlords almost by accident, thanks to a single property they might have inherited or one awaiting a decision on its possible sale. Either way you look at it, however, any landlord is likely to give priority to protecting the property with the appropriate form of insurance.

In order to understand why it is likely to be such a priority, it may be helpful to review cover for landlords and suggest a few tips about what needs to be taken into consideration:

Get the correct cover

• probably the single most important thing to remember is that your standard home insurance policy is unlikely to offer the protection you need once the property is let to tenants;

• when assessing risks, insurers take a keen interest in the purpose to which the insured accommodation is put;

• standard home insurance is designed for the owner occupier, but landlord insurance is necessary once the property becomes a business asset to be let to tenants – the risks are simply different;

• landlord insurance is a specialist form of cover suggests the Landlord Expert – and there is a clear distinction between this and the type of home insurance typically arranged by the owner occupier;

• failure to make this clear to your insurer is likely to invalidate your cover and – if you are deliberately misleading an insurer about whether or not your property is let – you may be prosecuted for the offence of insurance fraud;

• in a guide to cover for landlords published by Landlord Zone, it is explained that insurance contracts are based on the principle of “utmost good faith”, requiring the insured to inform the insurer of all “material facts” – such as the property being let to tenants;

Elements of cover

Landlord insurance – or buy to let insurance as you might also see it described – of course varies in its precise details from one insurer to another.

There are, however, certain core elements to most such policies:

Building insurance

• the let property is almost certain to represent a hefty investment and one which you want to safeguard by protecting its structure and fabric through building insurance – against such potentially major threats as flooding, storm damage, fire, impacts, escape of water and vandalism;

Contents insurance

• by the same token, the landlord may have spent a considerable furnishing and equipping the let property and contents insurance is designed to offer protection against loss or damage to those items owned by the landlord;

• responsibility for insuring possessions and belongings owned by the tenants, of course, is their own responsibility;

• some buy to let insurance policies also extend to cover, or offer the option of cover, against malicious damage to the let property or its contents by tenants – such as policies arranged by Cover4LetProperty and others;

Loss of rental income

• whether it is a large or small-scale project, letting a property is a business proposition, dependent for its success on maintaining rental income from tenants;

• in the event of an insured incident leaving the premises unfit for occupation by your tenants therefore, some landlord insurance policies typically offer at least some element of compensation for the resulting loss of rental income;

Landlord liability insurance

• the moment you become a landlord, you also take on a general responsibility for ensuring that your tenants come to no physical harm or have their property damaged;

• this is known as your duty of care and extends not only to tenants, but also their visitors and any other member of the public;

• if any of these suffers an injury or has their property damaged through some breach of your duty of care, a substantial sum in compensation may be ordered;

• to indemnify you against such claims, buy to let insurance typically includes landlord or property owner’s indemnity of at least £1 million;

Landlords’ statutory responsibilities

• it is important to keep in mind, however, that landlord insurance provides no defence against your failure to comply with other, statutory responsibilities and obligations you have towards your tenants;

• these include health and safety concerns such as the need for annual gas safety inspections – by a qualified Gas Safe engineer – safe electrical systems and appliances, compliance with national and local fire safety regulations, and, most recently, requirements for the installation of smoke alarms and, where appropriate, carbon monoxide alarms;

• you also have a responsibility for ensuring that any deposit taken from a tenant as security against damage and breakages is held by a government approved third party under the Tenancy Deposit Protection

Although there remain a number of responsibilities and obligations which you continue to shoulder as a landlord, therefore, there are also many risks and perils against which specialist insurance cover is available.

Latest statistics

To judge by the number and value of mortgages that continue to be granted, the purchase of buy to let property continues to ride high.

Statistics published by the Council of Mortgage Lenders (CML), for example, show that in February 2015 there was growth in practically every indicator compared to the same month in 2014:

• a total of 15,900 buy to let mortgages were granted in February 2015 – an increase of 11% on 2014;

• the loans accounted for a total of £2.2 billion – an increase of 16%;

• looking just at the mortgage lending for the purchase of buy to let houses, February 2015 saw 7,400 advances – up 1% on the previous year;

• these loans represented a total of £900 million – an increase of 3%

• the number of buy to let remortgages in February 2015 reached a total of 8,400 – an increase of 23% on February 2014; and

• the value of these remortgages was £1.3 billion – up some 31% on the previous year.

Despite this healthy economic contribution to the national economy and the continuing buoyancy of the buy to let market, however, it seems that not everyone is happy

A story in the Telegraph recently, accused all the political parties – at that time in the run up to the election – of rounding on the buy to let property market and on landlords in general.

Post-election, it remains to be seen of course just how such political posturing might actually translate into new obstacles or difficulties in the private rented sector of the housing market.

“Revenge” evictions 

This is the name given to occasions when landlords are alleged to evict or seek to evict tenants in an angry and vindictive response to the tenant who has complained about the condition of the property they are renting.

As reported by Inside Housing on the 17^th of March 2015, the House of Lords passed into law – as part of the current Deregulation Bill – measures designed to prevent landlords making such evictions and for the courts to strike out any application for eviction if it follows a tenant’s complaint that the landlord appears to have responded to inadequately.

It is difficult to know how many tenants have been directly affected by such attempts at eviction – known as “Section 21 notices” – but the housing charity Shelter, which had led the campaign for the present change in the law, estimated that upwards of 200,000 tenants face the prospect of revenge eviction every year. Shelter has been running its campaign for change since March of 2014.

Selective Licensing

Since its introduction in the 2004 Housing Act, some private sector landlords have been obliged to apply to the local council for a licence to let their property.

The rationale for what gave council’s the right to introduce “selective licensing” was that in certain poorer, socially deprived areas, commanding lower rents, licensing schemes might help to improve the general condition of housing in those areas – and in the process also contribute to a reduction in antisocial behaviour.

Licensing schemes have become a favourite of many local authorities and as many as 40 of them have pressed the relevant legislation to the limit by imposing on landlords the need for licences not just in selected areas of the city but in whole boroughs and towns.

According to the website Landlord Zone, in a news story published in March 2015, licensing adds an annual charge of an average of £500 for landlords who are letting their properties in affected areas.

Better news for landlords now, however, is that central government – in the guise of the Department of Local Government and Communities (DLGC) – looks set to rein back councils who are adopting a “blanket” licensing system and instead ensure that licensing schemes are in future reserved for housing areas in particular need of special assistance.

Although the licensing of landlords in some areas has not gone away, therefore, there are promising signs that curbs will be in place to prevent blanket licensing schemes across whole areas of the community.

At Cover4LetProperty we pride ourselves on offering top quality products backed by a professional, friendly service. We always welcome calls from our customers – and prospective clients – and make ourselves available by a variety of contact methods.

Firstly, you can call us during office hours, Monday-Friday on Freephone 0800 970 71 72.

Alternatively, you may email us at cover4letproperty@alanblunden.co.uk and one of our team of specialists will call you back.

You can also write to us at: Cover4LetProperty, Alan Blunden & Company Limited, 80 Baxter Avenue, Southend on Sea, Essex, SS2 6HZ.

Or, finally, fax us on 01702 606 367.

Whether you want to enquire about a new or existing policy, or perhaps you want a quote – whatever you may need to know, we can help.

We also have lots of information and useful guides and articles on our site, too, so don’t forget to have a browse of those too!

As part of their ongoing commitment to providing useful information in plain English, specialist niche insurance broker Cover4LetProperty.co.uk have added a new infographic to their website highlighting information and data from the world of landlords.

For example:

• in 2011, the most common claim under a landlords insurance policy from Cover4LetProperty was for escape of water and for an average amount of £2,786;
• subsidence claims in the same period averaged out at £13,545 per claim (making this element of cover well worth having);
• an average landlord insures their property for £145,000 at a premium of £208 (which includes malicious damage and subsidence cover as standard – not all policies offer these).

Richard Burgess, Director at Cover4LetProperty, commented: When we put together our infographic, it really brought home just what good value our policies are. With the average annual premium being a little over £200 and the average claim amounts running well into thousands of pounds (depending on the type of claim it is), it further endorses how cheap getting peace of mind can be.

Visit www.cover4letproperty.co.uk to view the infographic, or call the Cover4LetProperty team free on 0800 970 7172 for landlords insurance information.

Contact: Richard Burgess, MCIM, Director at Cover4LetProperty, telephone: 0845 863 9558 or email: richardb@alanblunden.co.uk

About Cover4LetProperty

With roots going back to 1946, our clients can benefit from 65 years’ of experience in the landlord insurance marketplace. We are award-winning independent intermediaries and act on behalf of our clients in arranging their buy to let and unoccupied property insurances. Our service includes advising clients on their insurance needs, arranging insurance cover with insurers to meet those requirements and help with any ongoing changes that have to be made to their landlords insurance policies.

In 2011 we were proud to beat off some stiff competition for the award for Best Landlord Insurer in the prestigious The Money Awards.

Cover4LetProperty is a trading style of Alan Blunden & Company Limited.

Alan Blunden & Company Limited was originally founded as a Sole Proprietorship in 1946 and acted as a traditional high street broker.

In 2000, we incorporated and now trade as Cover4LetProperty for our Landlords Insurance and Unoccupied Property Insurance related products.

We offer these products directly to members of the public via our online quotation engine and via our UK based call centre.

We are independent intermediaries and act on behalf of our clients in arranging their Landlord related insurances. Our services include advising clients on their insurance needs, arranging insurance cover with insurers to meet those requirements and help with any ongoing changes that have to be made to your Landlord Insurance Policies.

Our registered office is 80 Baxter Avenue, Southend on Sea, Essex, SS2 6HZ. We are registered in England and Wales and our Company Registration Number is 3476249.

Cover4LetProperty – Alan Blunden & Company Limited Insurance Brokers are authorised and regulated by the Financial Conduct Authority Number 309694.

Why should I take out a policy with Cover4LetProperty

Cover4LetProperty specialises in Landlord Insurance and Unoccupied Property Insurance.

We have been specialising in this part of the property insurance industry for over 10 years and have placed more than 50,000 policies on cover for Landlords throughout the United Kingdom.

Our offices are based in Southend on Sea and we have a team of experts who are on hand to answer all your queries.

The same member of our Cover4LetProperty Team who discusses your new policy will also be the staff member who helps you throughout the period you are insured with us, which may include making adjustments to your policy and/or making a claim.

Our Cover4LetProperty Manager, Michael Stammers and Director, Richard Burgess are always on hand and you only need to contact the office in order to speak with one of them should you have any complaints or compliments regarding our service.

How do I receive a quotation for my Landlords Insurance Policy or Unoccupied Property Insurance Policy?

Here at Cover4LetProperty you can obtain a quotation for your Landlords Insurance Policy or your Unoccupied Property Insurance Policy by completing the online quotation form or by contacting us free of charge on 0800 970 71 72.

Our website allows you to obtain a quotation immediately online and then go onto purchase your Landords Insurance Policy or Unoccupied Property Insurance Policy and pay using the HSBC E-payments Secure Payments method.

Full details of our Landlords Insurance and Unoccupied Property Insurance Policies, including Insurance Company, is always provided at quotation stage along with all of the appropriate terms and conditions related to your Insurance Policy.

We feel it is very important to point out that we offer quotations from a multiple panel of insurers and we will display all of the premiums which are available, not just the most the competitively priced.

Our expert team are always on hand to offer you personal advice and we would encourage you to pick up the phone and contact us so that we can discuss your personal requirements, to ensure that you are obtaining the right insurance for your needs.

Our Cover4LetProperty team are experts in this field of insurance.

Treating our Customers Fairly

Cover4LetProperty is absolutely committed to treating our customers fairly regardless of whether they are commercial or residential customers.

We are always ensuring and striving to make a difference and offer value to our customers.

We will never offer you an add-on which you do not require and all of our fees are always disclosed to you at time of your quotation.

Cover4LetProperty has a ’Treating Customers Fairly Mission Statement’ which we strive to live by and would like to share with you:

’We will ensure that our service (Sales, Admin & Claims) is transparent and that we are offering a suitable products/service to our customer that will be communicated in plain, clear English ensuring the clarity of the offer of our services.

We will strive to always deliver what we promise.

We will fix it if it goes wrong.

We will not take advantage.’