Buy To Let Landlords Warned To Make Sure They´re Insured

Buy to Let Landlord Insurance The housing market is still in an uncertain state (prices rising and falling almost at random at the moment) and many homeowners are now considering renting their property out rather than selling it. However, homeowners are being warned to ensure that they take out adequate landlord's insurance, as standard home insurance policies become null and void once you start to make money from your property.

Higher Demand For Rental Properties

As it stands, demand for rental properties is higher than it has been for over a year and, as a result, the amount of landlords looking to buy extra properties is increasing (the number of buy to let mortgages on the market has increased from around 200 to 240 in a year). These facts, combined with the return of the buy to let mortgage as a viable investment, have meant that more and more people are becoming landlords for the first time - but not all of them are doing everything properly. Whether you're moving into renting for investment or as a way to move home, it's essential all the paperwork is complete and all contracts are correct.

Insure Against Arrears

Last year, 37% of landlords had at least one property housing tenant who was in arrears - something that decent landlord insurance protects against. However, this cover doesn't break the bank - standard landlord insurance is available for less than £100 (£93) a year, which covers loss of rent amongst other things. In fact, for less than £140 (£134), you can cover yourself against legal charges as well, so long as they arise from things like repossession of property, debt recovery and a tenant defaulting - a quick home insurance comparison will reveal the best prices for you.

Only 50% Take Cases To Court

Landlords with tenants in arrears face a long and protracted process, with only 50% taking their cases to the court. Only around 35% of rental properties are secured on existing buy to let mortgage finance and for many landlords losing even a month's rent can cause all manner of untold problems - and as such, having adequate insurance that covers such events is ever more important. Julie Owen of moneysupermarket.com said: "Whether you're looking at buy to let property for investment, extra income, or because you cannot sell your house, it is essential to have sufficient insurance to cover any financial losses connected with letting out a property. I advise anyone contemplating becoming a landlord to seek advice and get all of the relevant information before taking this venture on."

Posted in Letting and Managing