UK residential letting is ‘a growth industry’

Posted on January 25, 2012 by admin

Making a UK property investment could prove a lucrative move, providing you know how to choose and manage the premises correctly.

That is according to Tom Entwistle, editor and founder at online community and information portal LandlordZONE.co.uk, who sees the buy-to-let sector in the UK as continuing to see growth over the coming years.

"Residential letting is a growth industry in the UK and is likely to be so for many years to come," he said.

However, would-be landlords will need to do their research and think carefully about how to manage their buy-to-let properties if they are to profit from the lettings market.

"There is the opportunity at the moment for good income returns for those able to buy the right properties in the right locations for the right prices, providing they know how to manage them well," said the expert.

With so much to consider before buying and renting out a property, first-time landlords may benefit from the help of professional residential lettings agents and landlord support service businesses like Homecheck UK.

"Letting is a growing market and new landlords are entering the field all the time, so they need all the help they can get – letting out a property yourself is a huge learning curve," commented Mr Entwistle.

Meanwhile, he argued that the government should do more to help the lettings industry by removing the burden of new regulation.

The government should "enforce the laws that already exist instead of dreaming up more and more regulations", he argued, adding: "Good landlords (by far the majority) follow the rules."

His comments come the same time as the release of new figures from the Resolution Foundation which reveal that there has been a surge in the number of young people turning to rented accommodation rather than buying a house of their own in recent years.

The proportion of low and middle income earners aged under 35 and renting has more than tripled from 14 per cent in the late 1980s to 47 per cent now, the foundation said.

2012 to be ‘the year of risk’ says AXA

Posted on January 20, 2012 by admin

Taking out landlord property insurance for your buy to let rental property could be more important for buy-to-let owners this year than any other, with AXA dubbing 2012 'the year of risk'.

According to the insurer, a combination of factors means there is a higher risk of property and contents damage over the next 12 months than during the average year.

Factors contributing to risk include the high number of events taking place in 2012 which are likely to lead to gatherings of family and friends, such as the Olympics, Diamond Jubilee and Euro 2012.

AXA's claims data shows that whenever large groups get together in the home the risk of loss or damage increases by up to 78 per cent, while the many people leaving a property vacant to attend such events increases the chance of theft.

Another factor that could lead to a greater number of insurance claims is the UK's current economic difficulties.

Economic pressures contributed to theft and attempted theft claims increasing by 12 per cent in 2011 and the situation shows no sign of improving in the immediate future, said AXA.

Finally, the weather could play an important role in upping insurance claims again this year, with AXA estimating that more than 50 per cent of people have still not taken precautions to protect their property from the effects of another severe cold snap like those seen in the previous two winters.

Furthermore, the drought conditions of recent months could lead to a substantial rise in subsidence in 2012, the company warned.

"We sincerely hope that our predictions turn out to be wrong but we would urge people everywhere across the UK to think about what they can do to avoid the stress and potential financial loss of a burglary or accident around the home," commented Christine Matthews, head of household claims at AXA.

Homecheck UK don't sell insurance, but if you contact your local Homecheck property inventory clerk to discuss your rental property landlord insurance needs, they will be happy to introduce you to a local broker or natioanl recommended insurance company.

Let’s Be Careful Out There – The dangers of underinsuring your buy to let property

Posted on January 12, 2012 by admin

Underinsurance is a rising problem in the buy to let industry. This occurs when a landlord provides an inaccurate rebuild cost of their property for insurance purposes. Not only does this threaten to affect the settlement of any potential claims, but there is also contractual conditions under the lease that require full reinstatement of the building.

Property owners should carry out professional building valuations at least every three years. This guarantees an accurate rebuild cost and enables the insurer/loss adjuster to concentrate on settling any claims that may arise rather than having to investigate possible underinsurance issues and causing unnecessary delays.

It is increasing likely that mortgage lenders will request a property is insured for a minimum amount. In severe underinsurance cases, failure to meet this contractual obligation could even lead to foreclosure on any loans secured against the property.

Homecheck UK can not advise on your rebuild cost. The best way to calculate this is to use a professional surveyor, however you can also use the association of British Insurers rebuild cost calculator. This can be found at http://abi.bcis.co.uk/

On a similar note, at Homecheck UK, our rental property inventory clerks often get called in to record damages from a natural event or from a tenant at check out. Occasionally it transpires that the buy to let landlord hasn't changed their insurance to a comprehensive landlord's insurance, which leaves them in a very precarious position.

Firstly you will invalidate your insurance and will not get the rebuild or reinstatement value of your investment rental property. Remember the floods in 2007 and last winter's big freeze?

Also, you won't have rent cover – this is where your tenant can no longer live at your rental property because the fire / flood etc has made it uninhabitable. How are you going to pay your buy to let mortgage whilst the property remains in that condition?

Then there is the issue of liability – We've seen very heavy winds over the recent festive break, along with damaged fence panels, cracked chimneys and roof tiles falling off. In a few cases those roof tiles have hit and damaged the tenant's car. This is quite common and always ends up with the tenant's car insurance company claiming off the house insurance.

Then it transpires that the owner is a landlord and doesn't have liability cover, or worse; only has a domestic homeowner’s policy which won't cover this type of event. Just imagine the worst scenario with the tile hitting your tenant instead of their car.

We wouldn't wish that on anyone, but you do need to take steps to protect yourself with a comprehensive landlord's insurance policy. Don't forget to check that liability extends to your contents as well.

Remember the Beko fridges catching fire last year and burning down properties – terrible. Now imagine that it was a landlord's buy to let rental property with inadequate or incorrect insurance. I'll leave the consequences to your imagination.

Finally, you did read the small print on your buy to let agreement didn't you. The bit where it says you will insure the property adequately for the full rebuild cost.

If you don't have a landlord's policy and are relying on a homeowners policy you are in breach of this term and could have your buy to let rental property repossessed.

Homecheck UK don't sell insurance, we do recommend that you contact your insurance company or broker to make sure your policy is adequate and correct.

Alternatively, contact us, we are also landlord's and would be happy to refer you to local brokers or national companies.

In the meantime, as the sergeant in Hill Street Blues used to say, 'Let's be careful out there'.

(Showing my age now)

Condensation and mould could be a problem for landlords over winter

Posted on January 6, 2012 by admin

Landlords may want to take steps to prevent mould from developing as part of the property management services they offer clients.

According to landlord Kim Thorogood, who is also a specialist adviser at a ventilation company, the risk of mould forming in rented properties increases over the winter.

Writing in a blog post for the National Landlords Association, she explained that mould is usually caused by a build up of condensation.

Condensation is often occurs due to a lack of ventilation, which prevents moisture from escaping, and with tenants less likely to open windows during cold weather the problem often increases during the winter.

"The argument over whose responsibility it is to ventilate the property is a tricky one," said Ms Thorogood.

"Landlords often believe that the problem would just go away if tenants open their windows, but one of the reasons why one in five properties now suffer from condensation is because in our drive for energy efficiency, we have 'sealed up' our homes to avoid losing valuable heat."

She advised landlords to inspect their properties regularly for mould or high levels of condensation.

Signs to look out for include damp areas appearing on walls, wallpaper starting to peel and a constant musty damp smell in the property.

Landlords can ask tenants to contribute by advising them to try to keep the inside temperature reasonably constant for as much of the time as possible and not to disable any extraction units.

It might also be worth landlords investing in new ventilation systems, said Ms Thorogood.

"Installing extract fans in the bathrooms and a ventilation unit in the loft area will also solve most condensation problems. By gently introducing fresh, filtered air in to the home at a continuous low rate, the relative humidity levels are reduced," she commented.

If you are concerned about ventilation and condensation problems, contact Homecheck UK for more information .

‘It pays to have high quality insurance’ as severe weather hits UK

Posted on January 5, 2012 by admin

It may be a good idea for buy-to-let property owners to check they have adequate buildings insurance for landlords in place following this week's bout of severe weather.

Yesterday (January 3rd) saw gale-force winds cause damage to property up and down the country while heavy rains led to flooding in some parts of the UK.

The Met Office still as severe weather warnings in place for many regions, particularly in Scotland, Wales and northern England.

Peter Harrison, insurance expert at moneysupermarket.com, said the situation demonstrates the need for property owners to take steps to protect themselves from the effects of severe weather.

"2012 is already making its mark with severe weather and flood warnings being issued across the UK," he said.

"Many people stand to be affected by heavy storms and gales and I urge anyone who has been, or stands to be, affected by this severe weather to act now."

In particular, it is important to have adequate insurance in place.Landlords may find they need to have both buildings and contents insurance to make sure they are fully covered, and may be wise to compare different contents insurance quotes to make sure they are getting the level of cover needed.

"It pays to make sure that the quality of your insurance is high and you won't be left out of pocket if you had to make a claim," said Mr Harrison.

"If you are unfortunate enough to be flooded, you may need to claim on both your contents and buildings policies. Fixtures such as fireplaces and electric lights, which you may have thought would be covered under a buildings policy, will usually be classified as contents."

He added that those at risk from the flooding should take expensive portable items upstairs or somewhere else dry to keep them safe, stock up on sand bags and check outside drains are clear and are not blocked.