There are things we make a conscious effort to engage in, and then there are others we just seem to fall into doing almost by sheer chance. In the private rented sector of the housing market, it is this difference which might separate the professional landlord from the so-called accidental landlord.

So, putting aside for the moment the individual who consciously acquires property as part of a long-term business strategy to make a livelihood, how does a different type of property owner become such an accidental landlord?

It might be helpful to look at a few examples, and offer a few tips on what might lie in store if you become a landlord “accidentally”.

How does someone become an accidental landlord?

Here are some common ways someone might become an accidental landlord:

1. Inheritance – a person may inherit a property, often from a relative, and decide to rent it out instead of selling it. This could be due to market conditions, sentimental reasons, or the desire to generate an income from the property;
2. Relocation for work – if you need to move to a different part of the country (or abroad) for work, you might choose to rent out your home rather than sell it, especially if you plan to return;
3. Relationship changes – a change in personal circumstances, such as a divorce or separation, might lead to one partner moving out and renting the property. Alternatively, a couple might choose to rent out one of their properties if they move in together;
4. Property market condition – if the property market is slow or prices are lower than expected, you might decide to rent the property temporarily until the market improves, rather than selling it at a loss;
5. Difficulty selling a property – you are struggling to sell your property so you might rent it out to cover mortgage payments or avoid leaving the property empty for an extended period;
6. Financial necessity – sometimes, financial difficulties might prompt a homeowner to rent out their property to generate additional income, especially if they cannot afford the mortgage payments – such as renting out an unused bedroom in your own home (see below).

What is the Rent a Room Scheme?

The government has put its weight behind greater use of spare room in private homes by introducing the Rent a Room Scheme – essentially, this grants a tax-free allowance of £7,500 a year (as at 2024) on what you earn from rents.

If this is your route to becoming an accidental landlord, you might want to give extra consideration to the insurance that safeguards your home:

• in the first instance, this means letting your standard home building and contents insurer know what you are planning to do;
• depending on your insurer, the response might be acceptance, an increase in the premiums you pay, or a flat refusal to continue insurance cover – especially with respect to cover for your contents;
• in the interests of caution and prudence – and for the avoidance of any doubt – you might therefore want to consider the more general benefits of comprehensive landlord insurance.

A landlord’s obligations

If you do become an accidental landlord, then you need to make sure that you:

• understand the tax implications – rental income is taxable, and accidental landlords must report this income to HMRC. They can also deduct certain expenses, such as repairs, letting agent fees, and mortgage interest, from their taxable income;
• have the correct type of property insurance – standard home insurance policies typically do not cover rental properties. Accidental landlords should obtain landlord insurance to cover risks associated with renting out the property;
• inform your mortgage provider – if the property has a residential mortgage, the lender must be informed of the rental arrangement. Some lenders may require switching to a buy-to-let mortgage;
• adhere to the legislation relating to being a landlord. As a landlord, even if accidental, you must comply with UK laws and regulations, such as ensuring the property meets safety standards, protecting tenants’ deposits in a government-approved scheme, and providing an Energy Performance Certificate (EPC). Please refer to our Landlord Legislation Guide here for more information;
• are aware of, and comply with, health and safety issues – you can read our Landlords Guide to Health & Safety.

There may be any number of reasons why your circumstances change, and you find yourself making the most of a valuable housing resource – or part of that resource – in order to make a little more income. In this way, and as the owner of that valuable piece of property you may consider it to have been an especially happy accident to have become a landlord.

Finally, for more information, you may find our guide – The Accidental Landlord Guide – useful.

You made sure to arrange the building and contents insurance for your home, let or other commercial premises you own. So the property’s perfectly safe. Or is it?

When you last renewed your property insurance did you consider the possibility of it standing empty and unoccupied for a while – intentionally or otherwise?

Did you give any thought to unoccupied property insurance or unoccupied commercial insurance?

Why may a property be empty?

There are many reasons why your home or commercial premises may become temporarily unoccupied:

Residential property

• you might have the builders in and need to vacate while they do their work;

• you might be fortunate enough to take an extended holiday – to visit overseas friends or relatives or to take that long-planned world cruise;

• you might need to work away from home for several months – and taking the family with you leaves your home empty and unoccupied;

• you might have an interest in a property that is currently subject to probate and must await the completion of that legal process before a decision to occupy or sell;

Commercial property

• similar considerations apply to any commercial property you might own;

• closure or vacancy might be necessary during any major expansion or remodelling;

• certain emergencies might lead to the closure of your business premises – the successive lockdowns during the Covid pandemic are a case in point;

• financial difficulties might have forced you to temporarily stop trading and close the premises pending an upturn or a decision on your future property ownership.

Why is empty property insurance needed?

So, what happens to your regular home or commercial property insurance during these periods when the premises are empty and unoccupied?

After a relatively brief period – of between 45 and 60 consecutive days (it varies on the insurer) – your existing property insurance will be reduced or even become void.

This is because practically every insurer will significantly reduce or even remove the cover previously in place when the property was occupied or in use. With any cover lifted, of course, your property becomes a special risk of loss or damage.

Why do insurers restrict or remove cover for an empty or unoccupied property?

Many of the reasons are described in our Complete Guide to being a Commercial Property Landlord – and they all boil down to the increased risk faced by any property (commercial or residential) that is empty and unoccupied.

The Complete Guide explains that any empty and unoccupied building tends to act as a magnet for all kinds of unwelcome attention. This from the likes of squatters, fly-tippers, burglars, other intruders, and even arsonists.

Further risks arise because an unoccupied home or commercial property is vulnerable to loss and damage caused by otherwise relatively minor maintenance issues – such as a dripping tap or electrical fault – that can turn into a full-scale emergency when no one is there to spot the danger in time.

Because of these risks from crime or maintenance issues, insurers restrict the cover they offer or treat as lapsed altogether. That leaves your property unprotected when protection is most needed.

To restore the necessary protection, specialist, standalone unoccupied property insurance is required for your home or commercial premises.

Not all risks may be covered

As we explain in our Guide to Unoccupied Property, empty property insurance may include full cover for up to many more days than that stated in your standard policy. Short-term flexible cover is also typically available from some providers.

Nevertheless, it is essential to check exactly what is covered in any unoccupied property insurance policy because all will differ to some degree. Some policies, for example, may not cover the risk of arson or the theft of contents of the building.

What does unoccupied property insurance cover?

Unoccupied property insurance broadly restores the full range of cover you usually enjoy with your home or commercial premises insurance policy – including the risks of loss or damage to the structure and fabric of the building and its contents.

The level of cover available may vary, so you can choose whether to have just the most basic of cover or enjoy full peace of mind with comprehensive cover.

Therefore, the risks covered may typically include fire, storm damage, escape of water, flooding, and so on.

Exclusions

As with many other types of general insurance, unoccupied property insurance also incorporates exclusions – and it is important to understand exactly what these are.

The detail will vary from one insurance policy to another and may also be reflected in the level of unoccupied property insurance you choose.

Summary

Avoid any false sense of security that your home or commercial premises remain adequately protected and covered by your regular insurance policy. The risks change significantly once the building and its contents have been left empty and unoccupied for longer than a month or so. Because of that change in the risks, insurers typically restrict cover or treat it as lapsed altogether.

The response – and one that will restore the necessary protection to your temporarily unoccupied home or commercial premises – is, depending on your property type, unoccupied property insurance or unoccupied commercial insurance.

It’s still early days for the new Labour government. But it has made clear that priorities will be given to housing – and affordable housing in particular.

So it’s worth taking a look at current property news headlines for a glimpse of the background facing government policies.

Report: £14.6bn economic contribution of the London private rented sector

When the government looks at the private rented sector it will be informed by a recent study by consultants PwC about the value of that market in London alone, according to the National Residential Landlords Association (NRLA) recently.

The key features of the report – entitled The Economic Contribution of the Private Rented Sector – include the following:

• small and medium-sized landlords – those owning 15 or fewer rental properties – contribute £14.6 billion to the capital’s economy or 2.6% of its total regional Gross Value Added (GVA);

• what is more, the report reveals, the private rented sector in London has created – either directly or indirectly – an estimated 128,000 jobs (in various areas of activity);

• the findings reinforce the importance of the part played by the private rented sector not only for employment but also the encouragement of investment in various regions;

• looking at England and Wales as a whole, the report reveals that the private rented sector contributes an estimated total of £45 billion to the UK’s Gross Value Added (GVA);

• across England and Wales, the private rented sector supports an estimated 390,000 jobs;

• the principal industries to benefit from the economic contribution of the private rented sector include public administration, building maintenance, and construction.

UK housing market hotting up – house prices on track for 2% increase in 2024

Evidence from the regular market analyses conducted by the online listings website Zoopla suggests that the UK housing market is heating up. Its latest report on the 30 of July reveals:

• an anticipated average increase in house prices of 2% by the end of this year;

• an increase in the supply of housing – given by the volume of agreed sales – of 16% compared with 12 months ago;

• that buyers are on average paying 96.8% of the seller’s asking price – circa £16,600 below the asking price – making these the highest bids in the past 18 months;

• government policies are expected to have “no material impact” on the housing market – but a cut in interest rates by the Bank of England could instil greater confidence and activity in the market;

• during the previous 12 months, house prices in the north of England have tended to rise while those in the south have fallen.

Top 10 cheapest and most expensive seaside locations

Has the arrival of summer encouraged you to hunt for a home near the seaside? The online listings website Rightmove on the 1^st of August listed the cheapest and the most expensive locations you are likely to find:

Cheapest

• average asking price £114,365 – Saltcoats, Ayrshire;

• £122,520 – Easington, County Durham;

• £124,593 – Peterlee, County Durham;

• £132,660 – Ashington, Northumberland;

• £133,197 – Bootle, Merseyside;

• £135,951 – Grimsby, Lincolnshire;

• £139,547, Girvan, Ayrshire;

• £140,437 – Maryport, Cumbria;

• £141,765 – Workington, Cumbria; and

• £146,674 – Hartlepool, County Durham;

Most expensive

• average asking price £1,582,331 – Sandbanks, Dorset;

• £1,242,181 – Canford Cliffs, Dorset;

• £751,442 – Milford-on-sea, Hampshire;

• £678,058 – Padstow, Cornwall;

• £603,312 – Lymington, Hampshire;

• £562,609 – Barton-on-sea, Hampshire;

• £542,005 – Budleigh Salterton, Devon;

• £521,932 – Lyme Regis, Dorset;

• £501,099 – Sidmouth, Devon; and

• £495,009 – Sandgate, Kent.

First-time buyers spend 40% of pay on mortgages

Citing research by the Nationwide Building Society, the BBC recently revealed that the average first-time buyer currently spends almost 40% of their regular earnings on mortgage repayments.

Nationwide recognises that this is substantially higher than the 30% of earnings that has been the longer-term measure of the ratio of mortgage repayments to earnings. The current rate underlines just how difficult first-time buyers are likely to find their first step on the housing ladder.

Although earnings have risen somewhat, house prices gained 2.1% in the previous 12 months – the fastest increase since December 2022.

When does property you own become vacant? Individual owners might have a wide range of opinions, depending largely upon the particular reason for the premises being temporarily unoccupied (which we discuss a bit further below).

Insurers, on the other hand, are likely to have a rather more particular view and a closer definition of a property falling empty and vacant. Whereas many are entirely content to extend comprehensive cover during those times when a building is normally occupied from one day to the next, they are likely to restrict cover, or remove it altogether, once the property has been unoccupied for longer than a number of consecutive days – typically a month or so.

There is no universal definition of this period of vacancy, which may vary quite markedly from one insurer to another.

As a rule of thumb, however, you might be facing the prospect of your residential or commercial property being inadequately insured, if at all, when it has been vacant for a month or more.

If a property is expected to be unoccupied for more than a certain number of consecutive days (as defined under your property insurance policy), you should contact your insurance provider.

The insurer may require a special type of cover known as “unoccupied property insurance” or “empty property insurance,” which is specifically designed to cover the additional risks associated with properties that are not regularly inhabited.

Find out more and get a quote for homeowner unoccupied property insurance

Or get a quote for unoccupied commercial property.

This type of insurance can provide broader protection against potential damages and legal liabilities, but it often comes with specific requirements such as regular inspections of the property, maintaining heating to prevent pipes from freezing, or securing all doors and windows effectively.

It’s important for property owners to review their insurance policies and understand the requirements and coverage limitations associated with an unoccupied property to ensure they remain fully protected under their insurance terms.

Instances where a residential property may become unoccupied

A residential property may become unoccupied for several reasons, each varying in duration and context. Here are some common scenarios:

1. Property renovation or construction

When a property undergoes significant renovations or construction work that makes it uninhabitable for a period, it is considered unoccupied. Residents may need to move out temporarily until the work is completed, particularly if the renovations affect essential services like plumbing, heating, or electricity.

2. Between tenancy periods

Rental properties often become unoccupied between tenancies. After one tenant moves out, there can be a period of vacancy while the property is cleaned, repaired, or awaiting new tenants.

3. Owner relocation or extended travel

Homeowners may relocate for work or personal reasons, such as long-term travel or an extended stay overseas. During such periods, the property remains unoccupied until the owner returns.

4. Probate

Following the death of a property owner, the property may remain unoccupied during the probate process while legal matters are settled, and the property is transferred to heirs or sold.

5. Property sale

A property may also be vacant if it is on the market to be sold. Depending on market conditions and the property’s appeal, it could remain unoccupied for an extended period before a new buyer is found.

6. Health-related absences

Homeowners might find themselves in a situation where health issues, such as a lengthy hospital stay or a move to a care facility, leave their property unoccupied.

7. Awaiting development decisions

A property might be earmarked for development or demolition, pending necessary permissions and arrangements, during which time it stands unoccupied.

In each of these circumstances, it is essential for the property owner to consider the need for appropriate insurance coverage to manage risks associated with leaving a property unoccupied for an extended period. Additionally, taking preventive measures to secure and maintain the property can help mitigate potential issues.

Instances where a commercial property may become unoccupied

In the UK, commercial properties can become unoccupied due to a variety of reasons, often impacting the type of maintenance and security measures needed, as well as influencing insurance considerations. Here are some common scenarios:

1. Tenant turnover

Much like residential properties, commercial spaces often become unoccupied between tenants. After a business moves out, there may be a period of vacancy before a new tenant is found, especially if the property requires refurbishment or customisation to suit the needs of the next occupant.

2. Economic downturns

Economic challenges can lead businesses to downsize, merge, or cease operations altogether. In such cases, commercial properties, whether office spaces, retail locations, or warehouses, can be left vacant as companies adjust their operations in response to economic conditions.

3. End of lease periods

Commercial properties may also become unoccupied at the end of a lease period, particularly if renewals are not negotiated in time or if tenants decide to relocate to more favourable locales or upgrade to larger spaces.

4. Property renovations and upgrades

Properties undergoing significant renovations or upgrades that require the temporary cessation of business activities can lead to vacancies. These periods of unoccupancy are necessary for safe, extensive renovations that cannot be conducted during normal operations.

5. Market oversupply

In areas with an oversupply of commercial space, properties may remain vacant for extended periods. This can happen when new developments are completed in anticipation of demand that does not materialise as expected.

6. Seasonal usage

Some commercial properties are used seasonally, such as holiday markets, agricultural processing plants, or certain recreational venues. These properties may stand vacant for parts of the year when they are not in use.

7. Regulatory and planning delays

Delays in obtaining necessary permits or regulatory approvals for business operations can also lead to commercial properties being temporarily unoccupied. This can occur when businesses are transitioning to new markets or when new developments are pending approval from local authorities.

8. Ownership changes

During transitions of ownership, commercial properties may experience periods of vacancy as new owners assess their options, plan property improvements, or seek new tenants.

Each of these scenarios presents unique challenges in terms of property management, security, and insurance. Owners of unoccupied commercial properties need to take proactive steps to manage risks, such as maintaining the property to prevent deterioration and implementing security measures to protect against vandalism or theft.

Additionally, securing the most appropriate type of empty property insurance to cover periods of vacancy is crucial, as standard commercial property insurance might not provide adequate cover during these times.

Why are insurers so wary of empty property?

There is one overriding reason for many insurers’ reluctance to cover an unoccupied property: the considerably increased risk which such premises face:

• instances of fire in vacant commercial and industrial property can be the result of arson;

• a fire may also start accidentally, of course, as the result of combustible material catching fire and – going unnoticed – rapidly spreads;

• even routine maintenance problems may develop into major disasters if there is no one on hand to raise the alarm and take the appropriate action; and

• on top of all these risks and perils is the tendency for any obviously unoccupied property to attract all manner of unwelcome attention from vandals, squatters, thieves and other intruders.

How you can help

Vacant property insurance is designed to help protect your empty premises, but there are a number of measures you might also take to help prevent loss or damage.

With respect to the already mentioned risk of arson, it is important you carry out a fire risk assessment of the premises concerned. By the same rationale, you might want to consider a wider risk assessment of all threats and perils to the unoccupied property.

More specific precautions and safeguards for your residential or commercial might include some or all of the following – whether or not they are required as a condition of vacant property insurance:

• ensuring that the building is well maintained and kept in a good state of repair before it is vacated;

• arranging logged inspections on a regular basis (if necessary, by contracting a specialist property management service). These regular inspections may also be a condition of your unoccupied property insurance;

• lagging or otherwise protecting water pipes which may be vulnerable to freezing during cold weather – and bursting in the thaw;

• considering shutting down all utilities – or at least informing the utility companies that the premises are going to be vacant for the duration;

• requesting the help of neighbours in letting you know of anything suspicious or unusual going on;

• creating every impression that a residential property is in fact occupied – perhaps by asking the same neighbour to park their car in your driveway from time to time, turning on interior lighting with the help of timer switches, and making sure that any deliveries are promptly taken inside and kept out of sight;

• indeed, if you anticipate that the property is going to be empty for some time, you might want to consider sealing up the letterbox completely;

• ensuring that any garden is well kept and free of fallen debris and rubbish;

• keep valuable items well out of sight – preferably removing them altogether from the property for safe keeping – but stop short of emptying the property of all furniture and possessions entirely, since this only serves to underline the fact that no one is living there;

• as a matter of common sense, of course, you need to make sure that all outside doors and windows are securely locked and that any burglar alarm is properly set – if you are unable to afford the installation of such a system, even a “false box” might help to deter opportunistic intruders.

An empty property might act as a magnet for all manner of undesirable attention as well as posing a number of additional risks and perils. For that reason, purpose designed vacant property insurance is intended as a temporary, standalone and comprehensive alternative to your lapsed regular insurance cover.

If a property vacancy is in the offing, you might want to contact the specialists here at Cover4LetProperty to arrange purpose designed vacant property insurance.

We have also produced some useful resources: read our Guide to unoccupied property and check out our video entitled: Do I need a specialist unoccupied property insurance policy?

If your let property is without a tenant, or you are a homeowner who is living or working away from home for a period of time, or even if you have inherited a property that you are not quite sure what to do with, you all have one thing in common – the need for unoccupied property insurance.

Once a property has been left empty typically for a period of 30-45 consecutive days, then your existing buildings insurance may typically offer only restricted cover – or it may lapse altogether. This is where unoccupied property insurance steps up – to provide the protection your property needs.

Check out our short video: Do I need specialist unoccupied property insurance?

What does empty property insurance cover?

We offer different cover levels from the basic cover right up to comprehensive unoccupied property insurance cover.

There are policies available to all that specifically cater to empty buildings and these start with the very basic limited cover of Fire, Lightning, Earthquake, Explosion and Aircraft perils. For additional costs these policies can be increased to offer extra benefits (except Accidental Damage).

Property owners liability cover

Property owners’ liability cover is an element of property insurance policy designed to protect property owners from legal liability for any injuries or damage that third parties might suffer while on their property. For example:

1. Bodily injury claims: This insurance covers the costs associated with claims made by individuals who may be injured while on the property. For example, if a visitor slips on an icy path leading to your rental property and sustains injuries, they might file a claim against you. In the event of a successful claim, property owners’ liability insurance would help cover legal fees and any compensation that may be awarded, less the policy excess.
2. Property damage claims: If your property causes damage to a third party’s property, this insurance can cover the costs. For example, if a part of your building falls and damages a parked car, or if a pipe bursts and causes water damage to a neighbour’s premises, this insurance would help cover the costs of repairs and any legal claims made against you.
3. Legal costs: Property owners’ liability insurance also typically covers the legal costs of defending against a claim. This includes solicitor fees, court costs, and any other expenses related to legal proceedings, up to the pre-agreed limit detailed on your policy.
4. Compensation awards: If a claim against you is successful, this insurance helps pay the compensation awarded to the claimant, up to the limit of your policy.

Having property owners’ liability insurance is important because accidents can happen, and property owners can be held legally responsible for injuries or damages that occur on their premises. This insurance provides financial protection against potentially substantial legal costs and compensation claims, which could otherwise seriously impact the property owner’s financial stability.

What are risks and restrictions?

If you spot a water leak at home, you call a plumber straight away and costs are reduced. If you spot a leak and do nothing for 10 days, the costs naturally go up and this is the reason vacant properties cost more to cover as people are rarely in them to check everything is okay.

This is also why restrictions are applied or, as we call them, Policy Endorsements are added. Inspecting the property regularly reduces the cost of claims, makes it easier to know if squatters have arrived and also shows the property is not abandoned.

Draining the water or leaving the heating on stops pipes freezing and splitting, also reducing claim costs as well as stopping damp from forming and spreading throughout the property.

All of these put together reduce the likelihood of a claim but also show the property is being cared for. This may help speed up the process of getting it occupied again.

If you have read this article because you have an empty property (or know someone who has) and want to make sure you have the most appropriate cover; it is simple and easy to find out. Pick up the telephone and call the Cover4 Team – we will be delighted to help.

Further Reading: Guide to Unoccupied Property

Managing unoccupied properties, whether commercial or residential, requires careful attention to security, maintenance, and insurance needs to protect the investment and comply with insurance policy requirements. So, if you have to leave your residential or commercial property empty for more than a month or so, here are a few unoccupied property insurance tips.

When might you need empty property insurance?

There are any number of reasons why a property you own has to be left unoccupied, including:

Residential

• you are having to work away from home – in this country or abroad – for a month or more;
• a property in which you have an interest is subject to probate and awaits a conclusion pending its final sale;
• you are moving house and taken up residence in your new home, awaiting the sale of the previous property;
• you have called in the builders to make extensive renovations or build an extension that leaves the property temporarily uninhabitable.

You will need unoccupied property insurance.

Landlords/commercial

• you are the landlord of property for which one tenancy has just concluded and you are awaiting new tenants taking up residence;
• your premises has to temporarily close down (such as what happened to some businesses during the pandemic).

You will need unoccupied commercial property insurance.

Why do you need unoccupied property insurance?

Whatever your reason for leaving the property empty for a while, you might be tempted into thinking that the regular home insurance, landlord insurance or business property insurance which currently protects the premises simply continues as before.

Closer examination of that insurance policy, however, is almost certain to reveal that cover lapses– or at least becomes severely restricted. For example, with a residential property, typically, once it has been left empty for 30 to 45 consecutive days or so (the particular interval being determined by different insurers’ specific policies), the cover will become severely restricted.

If you are vacating your property for longer than a month or so and want to investigate further the need for unoccupied property insurance, you might want to get in touch with us here at Cover4LetProperty, where we are able to arrange tailor-made cover to suit your needs.

Why does that standard form of insurance lapse?

Whilst the biggest single tip is the suggestion that you arrange purpose designed unoccupied property insurance, it might also be helpful to understand why that is necessary.

The answer is quite simply because of the changed risks and perils faced by your property  – whether residential or commercial -once it is left unoccupied:

• with no one at home, or responsible for the day-to-day management of the premises, a relatively minor fault or failure may develop into a full-blown crisis unless it receives immediate attention and repair;
• a small water leak, unchecked, can cause a lot of damage, for example;
• the risk of fire – sparked by a faulty electrical connection or gas supply for instance – is considerably higher in unoccupied premises, where there is no one to raise the alarm; and
• unoccupied property typically attracts all manner of unwanted attention – encouraging theft, vandalism, squatters and other intruders.

Recognising the significance of these additional risks, insurers reduce or allow standard cover to lapse, so that unoccupied property insurance is necessary to restore the safeguards the premises require.

Tips on the care of your empty property

Appropriate insurance represents only half of the picture – the other half is very much down to your own, essentially common-sense precautions. Reasonable steps to mitigate the risk of loss or damage, after all, is something typically expected by any insurer.

What form might some of these precautions take?

Secure the Property

• Locks and security systems: Ensure that all doors and windows are securely locked with high-quality locks. Consider installing security systems that include alarms and CCTV cameras, which can deter intruders and provide evidence if a break-in occurs.
• Regular checks: Arrange for regular visits to the property to check for any security breaches or maintenance issues. This not only helps in early detection of problems but is typically a condition of your insurance policy.
• Boarding up: For properties that will be vacant for a long period, consider boarding up windows and doors to prevent unauthorised access.

Maintain the Property

• General upkeep: Regular maintenance such as mowing the lawn, clearing gutters, and removing any debris can prevent the property from looking abandoned and reduce the risk of vandalism.
• Plumbing and heating: To avoid issues such as burst pipes in colder months, it’s advisable to keep the heating on at a low setting or completely drain the water system. Regularly check plumbing for leaks or blockages.
• Electrical systems: Ensure all electrical systems are safe and in good working order. Consider turning off electricity if it is not necessary, but maintain enough power for security systems and lighting.

Insurance requirements

• Notify your insurer: Inform your insurance provider that the property will be unoccupied.
• Compliance with policy conditions: Ensure you comply with all conditions of your insurance policy. Failure to do so could result in a refusal to pay out for any claims.

Legal and Safety Compliance

• Fire safety: Test all smoke alarms and replace batteries regularly. Remove all flammable materials from the property to reduce the risk of fire.
• Building regulations: Keep the property compliant with all local building codes and regulations. This includes securing the structure and maintaining all exits and entryways.

Consider hiring a property manager 

If managing the property yourself is too time-consuming or complex, consider hiring a professional property management company. They can handle everything from security to maintenance and ensure that the property remains in good condition.

Plan for the future

• Regular assessments: Regularly assess the condition of the property and plan for any necessary renovations or updates. This can be crucial for commercial properties to remain attractive to future tenants or buyers.
• Market the property: If the property is to be sold or rented, keep it presentable and consider staging it to increase its marketability.

Environmental controls 

• Humidity and ventilation: Manage humidity levels and ensure proper ventilation to prevent mould and dampness, which can cause significant damage over time.

By following these tips, owners of both commercial and residential unoccupied properties can ensure their buildings are secure, maintained, and compliant with legal and insurance requirements. This proactive approach not only helps protect the property but also maintains its value over time.

Do you need help or have questions?

Finally, if you have any questions relating to your unoccupied commercial or residential property, please feel free to contact us on 01702 606 301. We will be very happy to help.

Whether or not a new government gives your buy to let business a boost, there’s no doubt that landlords who keep abreast of the latest UK property news are more likely to prosper.

With that in mind, let’s take a look at some of the recent headlines.

Nationwide House Price Index for June

A picture of underlying stability is reflected in the latest house price index for June, says the Nationwide Building Society in its latest report:

• average prices across the country inched up by a meagre 0.2% in June;

• this had the effect of raising the annual house price index by just 1.3% from May to June of this year;

• with an increase of those proportions, average UK property prices remain approximately 3% below the records reached in the summer of 2022;

• market activity has also been relatively sluggish with the volume of transactions falling by some 15% compared with five years ago;

• there was a drop of almost 25% in the number of transactions supported by a mortgage, yet cash transactions recorded volumes over those reached before the Covid pandemic

• although the growth rate in average earnings is beginning to catch up with the increase in house prices, earners still struggle to afford mortgages that remain at rates significantly higher than they were just three years ago.

What income do you need to buy a home in 2024

Most people know that you’ll need a fair amount of money to buy a house. But the question of just how much that is likely to be was addressed in a blog on the listings website Zoopla on the 20^th of June:

• if you’re the average first-time buyer, let’s say, you’d need an income of £60,000 – that’s currently equal to twice what the average person earns in a year;

• if you already own your home but want to buy a bigger one, you’ll need an average of £72,600;

• these findings reveal that first-time buyers now have to find an extra £2,400 compared with last year and homeowners in search of a bigger house will need an extra £3,400;

• in terms of affordability, those on lower incomes might want to house hunt in the north of England or Scotland.

UK property rents on the rise again

Average rents across the UK are up yet again, according to a story in the Financial Times on the 3^rd of July:

• outside of the capital, average rents have now reached £1,316 – some 7% higher than 12 months ago;

• this is significantly higher than the prevailing average of 2% a year before the pandemic;

• nevertheless, an increase of 7% is still well below the record 12% increases of more recent years;

• rents in London paint a different picture since demand has fallen (a drop of 15%) and supply of rental accommodation has increased (by an estimated 16%);

• even in London, though, affordability remains a challenge, with an average of 41% of salary spent on rent – which is an average £2,652 each month;

• some of the biggest rent increases outside of the capital include NE England (11%), the West Midlands (10%), and Scotland (9%).

How much more do you pay for a home in a National Park?

It might be every homeowner’s dream, but how much would it actually cost to buy a house in one of the National Marks? The Daily Mail on the 8^th of June suggested an answer.

Quoting estate agents Savills, the newspaper revealed that homebuyers are prepared to pay an average premium of a staggering £422,225 to live in one of the National Parks. That represents an additional 51% on top of the current average house price in the surrounding districts.

The most sought-after locations appear to be:

• homes near Chichester Harbour in West Sussex where houses cost an average of £983,389 – or an additional 442,957 on other prices in the county;

• the Gower Peninsula in South Wales – where you’d need to pay a premium of at least 121%; and

• along the shores of Loch Lomond in Scotland – where buyers are willing to pay more than 114% more than in surrounding areas.

National Parks and other landscapes designated for their beauty already cover some 22% of the UK and further areas are likely to be added in due course.

Action on Empty Homes group recently reported that there are some 700,000 empty homes just in England alone.

This is at a time when the overall shortage of housing – especially for those looking for affordable housing – is getting worse rather than better.

So, what is being done to bring empty homes back into the use for which they were intended – and help to address the chronic shortage of housing?

The government

At national level, the government body responsible for housing, land, and regeneration – including the regeneration of empty housing – is the Department for Levelling Up, Housing and Communities. Its executive branches are currently Homes England and the Regulator of Social Housing.

From 1^st April 2024, the rules on long term empty properties in England changed. Double council tax on long term empty properties came in to force, supporting local people in areas where high numbers of empty homes are preventing them from finding affordable housing.

The sharpened rules will apply when a property has been empty for 12 months, rather than the current two years. A government press release earlier in 2024 said: “Councils will be given new powers to introduce the tax premium on second homes in their area from next year, bringing in millions more for public services or keeping overall council tax bills down”.

Empty homes grants

Empty homes grants are financial incentives provided by local authorities or housing associations to encourage the renovation and reoccupation of vacant properties. These grants aim to tackle the issue of long-term empty homes, which can contribute to housing shortages and urban blight. By offering these grants, local councils seek to bring these properties back into use, thereby increasing the housing supply and improving neighbourhoods.

Empty homes grants are funds typically allocated to property owners, developers, or housing associations to assist with the cost of renovating and bringing empty properties back into habitable condition. These grants can cover a range of expenses, including structural repairs, interior refurbishments, and other necessary improvements.

Purpose of empty homes grants

• Reduce housing shortages: With increasing demand for housing, these grants help to utilise existing structures rather than building new ones.
• Improve neighbourhoods: Renovating empty homes can enhance the appearance of neighbourhoods, reduce crime rates, and increase property values.
• Support sustainable development: Reusing existing buildings is often more sustainable than constructing new ones, reducing the environmental impact.

How do empty homes grants work?

Local councils or housing associations typically manage these grants. The process usually involves:

1. Application: Property owners or developers apply for the grant through their local council. This application may require detailed renovation plans and cost estimates.
2. Assessment: The council assesses the property and the proposed renovation work to ensure it meets specific criteria.
3. Approval: If approved, the grant is awarded, and the renovation work can commence.
4. Completion: Upon completion, the property must typically be occupied or made available for rent.

Eligibility criteria

Eligibility for empty homes grants can vary by local authority but generally includes:

• The property must have been empty for a minimum period, often six months to two years.
• The applicant must own the property or have legal authority to carry out the renovations.
• The renovation plans must meet specific standards and be approved by the local council.

Examples of empty homes grants

1. Wales: Grants of up to £25,000 are available to renovate empty properties to make them safe to live in and improve their energy efficiency.
2. Barnet City Council: Empty Property Grants of up to £25,500 are currently available to help owners bring long term empty properties back into residential use through either renovation or conversion. A grant is also available to assist with the development of new properties.
3. Leeds City Council: Leeds City Council’s Empty Homes Doctor service includes advice and financial assistance to bring empty homes back into use, including potential grant funding.

These above examples help to illustrate:

• the active steps being taken by various councils around the country to identify the number of empty homes in their area;
• the type of incentives that are available by way of locally funded grants and loans;
• the very local – and sometimes quite small-scale but no less valuable – nature of such schemes; and
• the widespread recognition by local authorities that empty housing represents a wasted resource at a time when practically every part of the country faces a housing shortage.

The upshot is that if you are interested in buying an empty property to refurbish, modernise to live in, let to tenants, or sell on there is likely to be help from a local council nearby. It is important, though, to do your research and establish just where and in which districts any such scheme might apply and to make enquiries about which of your refurbishment and regeneration projects might qualify for a grant or loan.

Disclaimer: The information provided in this blog is correct at the time of writing (pre-budget 3rd July 2024) and is based on our current understanding of the law. Please always seek professional help and advice.

Anyone with a garden is almost certain to have heard of the menace of Japanese knotweed. An increasingly large number of unfortunates will have learned all about the problem first hand as the pernicious weed finds its way into their garden.

Even worse – as the Guardian newspaper reported earlier this year – the unseasonably warm start to this year has encouraged the growth and invasive spread of Japanese knotweed throughout England and Wales.

What is Japanese knotweed and why is it such a problem?

The Royal Horticultural Society (RHS) identifies Japanese knotweed by its botanical name Fallopia japonica. It’s a weed that spreads very rapidly, growing to a height of 7ft (2.1m) or so as it stifles all other plants in your garden – or, indeed, on any other patch of ground.

This invasive weed is already a major problem for any landowner – residential or commercial – because it is so very resilient and spreads so quickly. From a fragment of root that can be as small as your fingernail, the knotweed sinks its roots far below the surface of the ground in a network of creeping stems or rhizomes. These can grow as deep as 10ft (3m) and as far as 23ft (7m) in every direction.

Environmental impact

Once established, Japanese knotweed can have a disastrous ecological impact. In its competition with native plants, the invasive weed threatens the natural ecosystem.

Its rapid spread displaces all other plants, altering the composition of the soil in which it grows and affecting the life of essential invertebrates. As a recent article in LandlordToday highlights, Japanese Knotweed is truly a formidable invader.

The legal position

Japanese knotweed is invasive and persistent. It causes extensive damage and is very difficult to remove. To help prevent its spread, the Environment Agency classifies its stems, roots, and contaminated soil as controlled waste and it is described as such in the Environmental Protection Act 1990.

You are not legally required to remove the weed from your land, but the Environment Agency leaves landowners in no doubt that it must not be allowed to spread to other properties. The Agency warns that you can be prosecuted if you allow Japanese knotweed to spread into the wild.

Tips for managing Japanese knotweed

The Environment Agency stresses how difficult it is to eradicate Japanese knotweed once it has taken hold.

Even repeated spraying with approved herbicides, for instance, it can take at least three years to get it under control while the rhizomes from which it grows can lie dormant in the soil for many more years. Not only must you dispose of the dead plants as “controlled waste” you must also abide by the law on the disposal of the chemicals you have used.

An alternative to chemical treatment is to bury the knotweed you have cut down. If you choose this option, though, you must inform the Environment Agency at least one month before you carry out the work. You must also stick to certain guidelines – for example, the work must take place on the same site on which the weed had been growing and must be buried at least 5m deep (or at least 2m if the site is covered with a geotextile membrane).

If you are a householder who wants to dispose of Japanese knotweed by burning it, you need to ask your local council whether such a fire is permitted. Beware, though that parts of the plant – namely the rhizomes and crowns of the weed – can survive burning. In that case, you will need to bury them.

A final option is to hire a specialist contractor to do the work for you. The Environment Agency recommends that you choose a firm from the professional register maintained by BASIS (the charitable organisation for specialists working in the pesticide, fertiliser, and related sectors).

*Image Wikicommons

There might be any number of reasons for your deciding to renovate a property:

• it is one that you have bought in an abandoned or derelict state, with the express purpose of renovating it and bringing it up to modern standards for you and your family to live in or to let out to tenants;

• you might want to renovate the property you already own to improve the living accommodation or to increase its market value prior to onward sale;

• if you are a buy to let landlord, a renovated property may command a higher rent and, so, increase the yield on your investment; or

• you might have inherited a property and decide to renovate to realise an improved market price on its sale or to enhance its potential as let accommodation.

The renovation of an empty property – either one you already own or one which you intend to buy for that purpose – may serve two purposes:

• it contributes to the overall standard and quality of the country’s housing stock – an important consideration given the current pressures on the supply of decent housing; and

• it increases the value of your investment in the property – whether you intend to live there as an owner-occupier or subsequently letting it to tenants.

Indeed, some local authorities are generally so keen to see empty properties returned to the housing stock at an improved standard that they may offer grants, loans, and plenty of advice to encourage property owners to those ends.

It is important to note that councils may impose conditions on the subsequent resale of such a property or conditions about it being let to tenants.

Renovating a property

Whether it is your own home or a buy to let property, any renovation project is a serious matter, not least because of the expense and disruption. How often have you heard the complaint that it cost twice as much as you bargained for by the time the building works are complete?

And if it is a let property you are looking to renovate, it is not just the cost of the building works themselves, but also the rental income that is lost whilst tenants cannot be living there.

Budget

Even the most carefully planned renovation projects have a way of getting out of hand when it comes to unscheduled and increasing costs – it is important to formulate a budget which you are able to adhere to.

A good way of keeping a handle on your budget is to keep firmly in mind just why you are embarking on the project in the first place – do you want more room, for example, are you looking to update and improve tired, worn or simply out of date facilities in the kitchen or bathroom, or is the project essentially one to address areas of the property in need of repair.

Budgetary control is also important when contracting builders and other tradesmen – make sure to secure a written agreement that details the costs of their work and the time in which it is going to be completed.

Ensure this also includes holding back a certain percentage of the payment to the builder for six months after completion of the works – to ensure that faults, errors or “snags” are put right at the builder’s expense and not your own.

Planning permission and building regulations

When you engage in anything likely to be so extensive, time-consuming, and expensive as renovating an empty property, careful planning of every aspect of the work is clearly important.

High on your list of priorities may be the need to establish whether the renovations require planning permission and, if they do, that you make an early application for the necessary planning permission. Since your application may take some time to process, the sooner you are able to submit it, the sooner might the work actually start.

Starting the work without planning permission or failing to comply with the relevant building regulations may ultimately prove very expensive – if you are subsequently required to tear down and rebuild any part of the works.

Insurance for properties undergoing works

Another critical element of preparation is insurance for the property during its renovation:

• inform your current home insurer or landlord insurance provider of your plans;
• if these involve relatively minor renovation and redecoration works, the fact that you have informed the insurer may simply be enough;
• on the other hand, your insurer may want to impose additional conditions or charge an additional premium for cover for the duration of the works;
• alternatively – and especially if the property may not be occupied during the building works – your insurer may impose conditions you consider unacceptable or even remove cover altogether;
• in that event, of course, you are almost certain to consider purpose-designed renovation insurance.

If you have bought a property to let or to eventually use as your own home with the specific objective of renovating it first, you may find it difficult even to secure renovation insurance.

Therefore, you might want to turn straight away to a specialist provider capable of providing this type of cover from inception – from the time you buy the property even though you have not lived in it yet or let it to your first tenants.

Why do I need specialist renovation insurance?

In response to that question, let’s take a look at your current home or landlord insurance.

Whether you own your own home or are the landlord of buy to let property, any insurer needs to know the use to which the insured property is put and any structural changes, modifications or extension that are built.

As the British Insurance Brokers’ Association BIBA) explains, these are “material facts”, which need to be declared to your insurer and your failure to do so may invalidate your home or landlord insurance.

For any project involving more than a lick of paint and perhaps changing a few doors, your standard home or landlord insurance will typically not suffice.

This is because the extra risks associated with renovating a property (perhaps it will be left empty while undergoing works; it will not be secure; you will have expensive machinery on site; accidents may be more likely to happen etc.) will not be covered under your insurance.

Renovation insurance exists to provide the additional protection needed when your property is undergoing works.

Specialist renovation insurance becomes necessary, therefore, because your existing home or landlord insurance is unlikely to provide the cover the property continues to need during renovation works.

Arranging the appropriate renovation insurance also helps you comply with one of the conditions almost certain to be attached to any mortgage you have on the property. This is the requirement to maintain adequate building insurance at all times – an almost universal condition, which is noted in guidance offered by Citizens’ Advice.

If your regular property insurance becomes restricted or lapses because of the building works in progress, therefore, renovation insurance continues to ensure that you are complying with the mortgage conditions.

If you are the landlord of let property, your hand may have been forced into commissioning some degree of renovation in order to meet local licensing requirements which may have been introduced in your area – especially if the property is a House in Multiple Occupation (HMO). The housing charity Shelter has published a guide to the different types of HMO licence and their conditions.

What does renovation insurance do?

Renovation insurance is standalone cover but designed to provide temporary protection while building works are in progress. Once the latter are completed, you revert to your normal home or landlord insurance – reviewing the total building sum insured to reflect the increased value of your renovated property.

Because it is temporary cover, therefore, a distinctive feature of renovation insurance may be the ability to purchase it for periods of less than the full 12 months normally required for other forms of general insurance. If the works are scheduled to last just three or six months, renovation insurance may be tailored to cover just this period – yet also remains sufficiently flexible to be extended if unexpected delays or hold-ups occur.

A detailed guide to renovating and what renovation insurance you may need is found in the library of different property guides we have published here at Cover4LetProperty.

What does renovation insurance cover?

Although different policies may vary quite widely in the details, the following are some of the principal elements typically covered:

Building insurance

• you need to restore the protection of the existing building against the usual major risks, which are likely to be that much greater whilst the works are in progress – whether because of the added risk of flood damage, for example, if the existing building is no longer wind and watertight or because of any structural damage caused during the work in progress;
• in addition to the existing structure, some renovation insurance policies may also provide protection against loss, damage, or the need for reinstatement of the new works;

Contents insurance

• the contents of your existing home or let property are also under greater threat during any renovation works – especially since the premises are likely to be unoccupied and for there to be no one onsite for significant periods of time, especially at night;
• renovation insurance may restore the protection you need for the property’s contents;

Public liability insurance

• building works on your property may pose a risk of injury or property damage to passers-by, visitors to the site, neighbours, and other members of the public;
• if one of these third parties suffers a loss or injury, you may be sued as the property owner – and claims may be substantial;
• public liability insurance provides indemnity against such claims – typically for at least £2 million;
• bear in mind that your contractor’s own liability insurance typically doesn’t cover any claims against you – although the contractors working on your renovation works are likely to have arranged insurance cover for their own public liability, this does not extend to any incident for which you as the property owner may be held liable;
• In addition to public liability cover and safeguarding the existing structure of your property, there are other risks associated with the renovation works in progress – onsite, for example, you may have valuable materials, supplies, plant, machinery, and tools which are at risk of being stolen or vandalised.

To find out more about renovation insurance, why you may need it, and to see the answers to FAQS, please visit our renovation insurance page here.

Unoccupied property cover

One further important aspect of renovation insurance is its role in providing cover when your property is unoccupied for longer than a month or so – something that is almost certain to occur if extensive building works are being carried out and you need to vacate the home or temporarily vacate it of any tenants.

Even though there may be people working on the property throughout the day, there are significant periods of time when the property is empty – and these are times when it is likely to be at its most vulnerable.

When no one is living there, the need for minor repairs may go unnoticed and rapidly develop into major emergencies, whilst an empty building is especially vulnerable to squatters, vandals, arsonists and other intruders.

As a result of the heightened risks, most home and landlord insurance policies severely restrict the scope of cover, or regard it as lapsed entirely, once the property has typically been empty for longer than 45 to 60 consecutive days (the exact period varying from one insurer to another). Once again, renovation insurance plugs this gap by incorporating a valuable element of unoccupied property insurance.

Typical exclusions?

The exclusions incorporated into any insurance policy are every bit as important as those risks and perils that are covered.

Although each policy will vary in the details, renovation insurance typically excludes damage caused by the contractor (which should be covered under the contractor’s own insurance).

Usually, where structural works are taking place, no cover is in force for any part of the building that is either being constructed or worked upon (the works in progress, to which we have also referred to above).

How long does renovation insurance last?

Whenever the builders are in, you are likely to have a carefully planned schedule of works that include a completion date. Delays in even the best-laid plans occur and building works are notoriously prone to unexpected delays.

To make sure that adequate protection remains in place however long the delay in completion, therefore, renovation insurance is typically flexible enough to allow extensions to the period of cover provided.

Since many such building projects are likely to be completed well within the full year, moreover, as we mentioned before, renovation insurance is also designed to offer the necessary short-term cover, which may be bought for periods of just three or six months, for instance, rather than the full 12 months customarily required for most other types of general insurance.

Next steps

The specialist, niche cover provided by renovation insurance may provide the solution for ensuring that works in progress, the supplies, materials, and tools likely to be onsite, and the potentially substantial claims arising from your public liability are all suitably protected.

In short, if you are planning any renovation project for your home or let property, you might want to give careful thought to the need for renovation insurance. So, if you are about to embark on an exciting new renovation project for your property, just give us a call or get an online quote for renovation insurance today.

Further reading: Guide to renovating