According to research from LV landlord insurance, a surge in ‘part-time’ landlords across Britain is happening as people attempt to boost their income by letting properties privately and without the use of a letting agent. Over 7% of adults in Britain rent out a property to help supplement their income and receive on average £935 per month. This equates to almost £41bn a year across the country.
As you would expect, landlords in London and the South East collect the highest rents at £1,478 and £940 respectively, followed by the South West (£878) and East Anglia (£776). Moving to a new home and then renting out their old one is the driving force behind the trend as 55% of 'accidental' landlords renting out properties that they never intended to, often because they wanted a bigger property (15%), they had to move for work (10%) or they wanted a garden (8%). 6% of landlords say they ended up renting out a property because they moved in with a partner and did not want to sell or couldn’t sell their own.
Whatever the reason may be, all landlords must comply with current regulations on rented homes. The law states all landlords must ensure that gas and electrical equipment is installed and checked annually by a registered engineer. Tenant deposits must be held in a deposit protection scheme and some local authorities insist that landlords in their area obtain a licence. A managing agent will usually take responsibility to ensure that all legislation is complied with for a fee, as well as check tenants and manage the rent collection. Almost half of today’s amateur landlords manage their rental property on their own and do not have such protection. Of those self managing their properties, 27% have not had a gas safety check in the past twelve months and risk being prosecuted and fined up to £20k.
As well as exposing themselves to fines from the local authority, landlords could find themselves heavily out of pocket if one of their tenants decides to make a claim against them. For example, a landlord could be sued by someone who falls and is injured because a pathway has not been maintained. Landlords can also be liable for damage to adjacent properties, such as an overflowing gutter causing water damage to a neighbouring house. Analysis of the data shows that the number of liability claims being made against property owners has been steadily increasing in recent years, which can be attributed in part to Britain’s growing compensation culture.
The insurance needs of a rented property are very different to those of an owner-occupied home and standard home buildings insurance will not usually cover homes that are tenanted. Almost a third (32%) of landlords say their rental property has been damaged at some point and has had to be repaired, which has cost them £1,200 on average. Of those who have had their property damaged, the main cause has been damage by tenants (44%), followed by flooding (17%) and storm damage (8%). 19% of those who rent out houses – equivalent to over 400,000 landlords – do not have appropriate insurance in place and might not be covered should the worst happen.
Renting out a property can be a great way to cover your costs if you are unable to sell or want to hold on to a home and make some extra money from it, but it is not without risk. In order to mitigate those risks, we would always advise that you speak to a reputable agent who will help to guide you and show you how to protect yourself against many risks you may not have even considered, and this is where we can help, so call us on 01344 209088 or visit our offices in Bracknell for further details.
