April, 2010
Gas safety fears
Experienced landlords are usually well aware of the need for annual gas safety checks. Despite this there are still cases where let properties are equipped with malfunctioning or even dangerous gas equipment. One theory is that the recent phenomenon of “accidental landlords” has brought an influx of inexperienced property investors to the market. They may be people who have moved abroad for a while and let the house to help pay the mortgage. Or perhaps a couple move in together and one property is let out. It is understandable that landlords like these might not be aware of the legal burdens attached to a letting business but a glance at the figures shows how gas safety simply cannot be ignored. The HSE website shows that 310 people were injured and 18 died in the UK in 2008/9 from gas related incidents.
It is a landlord’s legal responsibility to have a Gas Safe registered engineer carry out an inspection annually. The gas safety certificate must be given to the tenant within 28 days or before moving in. The landlord should also make sure that the tenant knows how to turn off the gas in the event of a suspected leak. The Gas Safe Register replaced the CORGI scheme on 1st April 2009 in Great Britain and the Isle of Man and on 1st April 2010 in Northern Ireland and Guernsey.
Landlords legal expenses can be added to your landlord insurance policy. A small additional cost from £19.00 per property landlords’ benefit from a 24 hour legal helpline and up to £50,000 legal cover if they are prosecuted under gas, furniture or electrical equipment regulations or if a neighbour commits a trespass or nuisance at their rented property.
landlord insurance in available from click4quote.com, either call 01206 771755 or go online.
Lettings Market Booming?
The Telegraph (17th April) devoted the front page of its property section to a long article on the lettings market. Apparently it is booming with agents reporting plenty of would be tenants and not enough properties. A London agent said she has 60% fewer properties on her books than a year ago and the same number of tenants. The bullish attitude has spread to other parts of the country with the article quoting agents in Devon, the Cotswolds, Nottingham and Scotland. They are all saying the same; rising demand and rising rents.
The agents Savills and the website Globrix have worked out average yields for typical properties in different part of the country. In other words how much rent you would earn as a percentage of the value of the property. They suggest that the best yields at the moment are from one bedroom flats where you can earn as much as 6% and the worst are four bedroom houses at 3.8%. Scotland seems to be the best area for yields and the South West the worst.
What no one knows is what will happen to rents and property prices in the future. The statistics always look backwards and prospective landlords need to be comfortable that the deal they are putting together to finance a buy to let purchase will make sense even if the market turns down.
If you own or are thinking of investing in a buy to let property remember that you should also purchase let property insurance. Buy to let insurance will cover you for certain occurances whilst your property is let and gives you piece of mind over your investment.
Insurance problems – travel policies
Most people realise that it makes sense to shop around for travel insurance. The deal offered by your travel agent or tour operator may not be the cheapest and the cover may not be quite right for your holiday or business trip. There is no point in paying for cover you will not need and equally you must make sure that any activities you are planning will be included. Insurers have different definitions of “hazardous activities” so make sure you are covered for what you intend to do.
Age restrictions are imposed on some policies and older people tend to have to pay more. If you or a member of your party suffers from a medical condition you may have problems arranging your policy. You will probably have to go through a medical screening process to find out if you can be covered and if so how much it will cost. This is often overlooked by people whose travel insurance is included in another policy. Travel cover automatically included in household insurance for example might not be valid if you fail to notify the insurer of pre-existing medical conditions. It is easy to overlook this because when your household policy arrives the last thing you will be thinking about is your holiday travel. If you are taking out a stand-alone travel insurance policy on the other hand you will be prompted about medical conditions and other issues that might need to be disclosed.
If you are taking expensive equipment with you, make sure the sums insured are sufficient and familiarise yourself with the insurer’s security requirements. For example valuables may not be covered if left in your car overnight.
It may be tedious but there is no substitute for checking your policy carefully!
Rent Arrears and local authority tenants
Until a couple of years ago landlords with local authority tenants could have the rent paid direct to them rather than the tenant. In 2008 the system was changed with the introduction of the Local Housing Allowance (LHA). Now, the rent is paid to the tenant who is supposed to pass it on to the landlord. Inevitably some tenants spend it on other things and the rent is not paid. According to the National Landlords’ Association, LHA landlords are owed rent arrears averaging £4,400 each.
One company specialising in evicting tenants says it has seen a 20% increase in instructions from landlords to evict local authority tenants since the new system was introduced. It seems that in some cases the tenant was already in debt before the tenancy started; making it even more likely that there would be a rent default.
If landlords are deterred from entering this sector it will be harder to find homes for vulnerable people. A parliamentary committee recently reported that the Local Housing Allowance system is “falling short of its original intention and is in urgent need of review.”
Do you have any experience of the LHA scheme? If so please let us know.
Click4quote sell landlord insurance for property rented to tenants reciving benefits. You may get a quote and even buy online for this type of landlord insurance so get a quote today and see how much you can save.
More new rules for landlords
If you wish to let out a property to three people you may now have to have planning permission. The new rule (from April 6th) applies to landlords wishing to rent to three or more people from two or more family units. Previously, landlords needed a licence (but not planning permission) to let to five or more people from two family units living over three or more floors.
Planning permission can take weeks to obtain and involves a fee together with the time and expense of preparing the application. The reason for the new rule is apparently that the government is concerned about complaints from people in university towns about nuisances created by students living in houses in multiple occupation.
It seems almost certain that this will reduce the availability of private rented accommodation. The National Union of Students have written to the Government expressing their concerns and the Residential Landlords’ Association has handed in a petition at Downing Street. This will be of little comfort if you are caught by the rule; the best advice is to check whether it affects your property and if so apply for permission as soon as you can. Some landlords are concerned this may also have a knock on effect to let property insurance if the appropiate planning permissions are not held.
If you are rent out any property you must have appropriate landlord insurance and you for some insurers you must notify them of the type of tenancy involved, otherwise any claims may not be covered.