February, 2010
Outlook for Buy to Let
It was not so long ago that the buy to let property market was being written off. Fear of falling property values, rent arrears and mortgage famine were taking their toll on investor confidence. Now, an article on the citywire website (29th January) is painting a far more encouraging picture. The author is property blogger Linton Chiswick who points to some encouraging signs.
Firstly – two new specialist mortgage offerings for buy to let property investors; perhaps a sign that the credit shortage in this sector may just be easing.
Secondly – a report that rent arrears actually ended up lower in 2009 than the year before.
Thirdly – Capital Homes have published a survey of the market showing that 81% of respondents saw a healthy future for buy to let investors. 71% said that their mortgage repayments, management fees and maintenance charges were being covered by rental income. So much depends on capital values. If they are rising it is easy to feel optimistic!
What are conditions like in your area?
If you have buy to let property then you should be looking to protect your investment with buy to let insurance. Without protecting your property you could leave yourself open to a significant financial loss, such as a fire or explosion happening at the premises can cost thousands of pounds to repair, which is where buying buy to let insurance would help protect you from this possible situation. Call click4quote today for an instant quote over the phone on 08450 89 90 91 or 01206 771 755
Landlords of let property at risk from crooks
The National Landlords Association says that criminal gangs are using let property to carry on a range of criminal activities ranging from cannabis farms to brothels. The gangs try to find properties to rent in quiet areas where they hope no one will notice what is going on. This can cause enormous problems for the landlord. If the criminals cause damage the property insurance might not cover the bill and there will usually be a long delay before the property is in a state to be let out again.
This story emphasises the importance of knowing who you are dealing with when letting out a property. References are essential and it is important to make sure the property is being inspected regularly.
One landlord found that he had to pay £20,000 to repair his property after it had been used as a cannabis farm. This could be a cautionary tale for people thinking about becoming “buy to let” landlords. Being a property owner can have its rewards, but only if you exercise caution in every aspect of your business venture.
It is important to gain references for your tenants and to regularly carry out internal checks on your property. It is reported quite often that tenants request longer periods between inspections, usually 6 months coming up with random reasons for this request. It is this period of know freedom when properties can be ripped apart and cannabis ‘factories’ installed. Criminals can make thousands of pounds a month with 6 months being quite long enough to cover all their costs and make huge profits from your property - then leaving you with a large repair bill.
Not all landlord insurance covers illegal activity which is why it is so important to check your property regularly. Let property insurance is designed to cover unforseen accidents such as fire, explosions and flood and is not a replacement for remaining prudent about your property.
Cold snap costs insurers £35 million
One property insurance company reckons that since the beginning of December, UK policyholders have made nearly 16,000 claims relating to water damage totalling something like £35 million. The cold weather has obviously caused inconvenience and even misery for many property owners. In some parts of the country temperatures dropped to an amazing -22C overnight and it is little wonder that pipes froze and then burst.
According to this research the average insurance claim for burst pipes is £2,218. This might not seem too much but it conceals the nuisance and stress caused if your property floods.
It makes sense to know how to turn off the water at the stopcock or meter. Also ensure that the pipes are adequately lagged. If you are leaving the property unattended for a few days make sure that sensible precautions are taken to keep it warm and safe. If the property is unoccupied for a longer period check your insurance cover to make sure you follow the insurer’s requirements.
If you have a property click4quote can offer quotations for landlord insurance, homeowner insurance, uk holiday home insurance and let property insurance. Go online or call us on 08450 89 90 91 or 01206 771755
New protection for tenants from sale and rent back landlords
A new breed of landlord has appeared in the last few years. They will buy your home from you but you can stay in it as a tenant. If you are struggling to pay a mortgage it is tempting to see this arrangement as the answer to all your problems because your mortgage debt disappears but you stay in the house of your choice.
As with all financial transactions there are pitfalls and good advice is essential. Will you receive a fair price and how long will you be allowed to stay under the new lease? The purchaser is unlikely to offer as much as the house might be worth on the open market and the lease might not give very much security.
The Financial Services Authority is issuing some new rules to protect people thinking of selling and renting back. The new rules apply from June 2010 and include:
A 14 day cooling off period
The new landlord must offer at least a five-year lease
The arrangement must be affordable and appropriate for the consumer.
See the FSA website for more information : www.fsa.gov.uk
Incidentally, the landlord and tenant will need to ensure that they have appropriate insurance cover in place. Does anyone have experience of this type of arrangement?
Click4quote offer landlord insurance online. Our landlord insurance can protect the property when rented unlike most standard homeowner insurance which excludes this situation meaning the cover is invalid.
EHIC cards provide limited protection when travelling
It is good a good idea to carry an EHIC card if you are travelling in Europe but remember that it will not cover treatment at private clinics. The card offers UK residents access to state health care as though they were residents of the country they are visiting. This means that you might have to pay a contribution towards the treatment if that is the system operated in the country you are visiting. The card covers all countries in the European Economic Area and Switzerland.
The NHS website advises people to carry the card but warns against regarding it as an alternative to travel insurance.
You might not find a hospital or clinic that accepts the card and it will not cover specialist services such as repatriation. As well as covering private medical care a good travel insurance policy protects you against many other risks such as your liability if you injure someone and the loss of your personal possessions.
If you have any experience of using an EHIC card, or have any travel insurance problems let us know.
Take care skiing on the slopes this winter
The Telegraph (January 23rd) reports that ski travel insurers are taking a tough line on skiers who injure themselves because of excessive drinking. A survey by a leading travel insurance provider suggests that more than 500,000 Britons will be skiing this winter season with almost twice the UK drink-drive limit of alcohol in their blood. The alcohol consumed the night before may still be in the bloodstream, possibly topped up at lunchtime. Another piece of research, this time by an insurance website suggests that 25% of skiers are adversely affected on the slopes by people who have drunk too much.
Some insurance policies contain an exclusion clause specifically aimed at drink related accidents. Even if your ski travel insurance policy does not specifically refer to alcohol there will probably be a clause saying that the insurer will not pay if the accident was caused by the policyholder failing to take reasonable care for his or her own safety. Excessive drinking would be an example of this.
Always check that your winter sports travel insurance policy covers all the activities you are likely to try. You may have to contact your insurer for quotations for the more hazardous activities like ski-racing for example. Let us know if you have any ski insurance problems or issues to raise.