Buy to Let Insurance
Make sure you are insured against arrears #buytolet
Apr 5th
With rents on the rise and demand for rental property increasing, it seems like a golden age to be a buy to let landlord. There is one cloud on the horizon though that all landlords should consider.
Figures relating to arrears and evictions are also on the rise. The number of tenants with with more than two months arrears increased by a massive 11,400 in the last 12 months and evictions rose by 11% in the same period. So if the risk of default is increasing, what are your options?
Quite simply, the best thing to do is insure against that risk. Most comprehensive buy to let insurance policies will allow you to insure against loss of earnings and legal costs if your tenants default and are unable to pay. This low-cost addition to your monthly outgoing will protect your revenue if a tenant defaults and cover your legal costs if the situation deteriorates.
Accidental landlords on the rise #buytolet
Mar 13th
The number of accidental landlords is on the rise according to some new research that was published this week. Figures from the the National Landlords Association (NLA) show that, as rents rise and vendors struggle to sell property, more people than ever before have been forced into renting out their homes. In addition, new statistics from the Co-operative Bank show that 20% of its recent buy-to-let business has come from reluctant or accidental landlords.
While temporarily renting out a property is a sensible short term solution for vendors who find themselves stuck in their homes and unable to move, ‘accidental’ landlords have the same legal responsibilities as regular landlords and are being warned to take them seriously. David Salusbury, chairman of the NLA points out that many of these new landlords ‘do not even accept that they are landlords’, which can mean serious issues and complications when it comes to mortgage finance and insurance.
Besides making the situation clear to their mortgage provider, all accidental landlords are advised to look closely at the insurance implications of renting out their homes. Standard home insurance policies don’t provide cover for the additional risk of tenants so accidental landlords often find themselves with large repair bills when things go wrong.
So, if you’re considering letting out your home for whatever reason, make sure you are covered and give us a cal first.
Buy to let market is surging
Jan 30th
It seems that, despite the generally depressed state of the UK residential market, more and more lenders are rushing to join the buy to let party. New research suggests that the choice of financial services that are on offer to landlords are now getting close their 2007 peak.
It’s great news for landlords who are already enjoying impressive yields on their investments. The lack of available finance in the residential mortgage market has helped to push demand for rental property to an all-time high, which has lead to increased yields and significant annual rent increases.
As a result of this, lenders are piling back into the buy to let market and cutting their rates aggressively as competition increases. According to Rightmove this means that there are more than three times as many buy to let finance options available today as there were in 2009 and there is a good mix of options to choose from with various lending criteria, interest rates and loan to value options available.
If you’re thinking of dipping your toes into the buy to le market, you will need to get the right insurance before you let out your home so why not call us today for some friendly, helpful advice.
Rent increases slow as defaults increase
Nov 21st
After several months of record breaking rises, it looks like the upward trend of rent costs is beginning to slow. New data published this week suggests that the average rent in the UK is now £720 a month. That’s a rise on the figure for October but only a small, 0.2% rise. This is the smallest increase since February 2011.
As ever there is a very mixed regional picture. Rises in the south east and east of England were significantly higher at around 1.5%, while in some regions such as the north east, prices actually fell by around 1.5%. As usual London leads the regions in terms of cost, with an average monthly rent that now stands at £1,030. That’s almost 6% higher than a year ago.
There are also some warning signs with regard to affordability as defaults rates climbed significantly in October, up to 10.1% compared to 8.6% at the end of September.
Buy to Let Market is 15 Years Old #buytolet
Sep 26th
It seems like a long time ago but it’s only been 15 years since ARLA (Association of Residential Letting Agents) joined forces with the CML (Council of Mortgage Lenders) to launch the buy to let sector of the UK housing market.
In those fifteen years, the buy to let sector has caused some massive changes in the UK housing and personal finance markets. We’ve seen the rise of the amateur buy to let landlord as more and more ordinary people took advantage of cheap buy to let funding. We’ve seen the creation of a whole new insurance and dozens of affiliated services designed to serve growing number of landlords and of letting agents.
Since the launch of buy to let in 1995 the maket has grown massively, from a net value of £5.4 billion in 1999 to an incredible £155 billion in 2011. There’s no doubt that the boom will continue, as rents rise and demand for rental property increases there’s no better time to be a buy to let landlord.
Rent is on the rise but so are arrears #buytolet
Sep 19th
There is mixed news for our buy to let customers this week.
Rents in England and Wales registered their largest monthly increase for a year, up by 1.2% to an average of £713 per month for August. This means that the average monthly rent has now surpassed the previous record of £705 which was set in July 2011.
The biggest increases where in London and the South West where they rose by around 1.5%. The average London rent stands now at £1,025 per month. Don’t forget that a comprehensive buy to let insurance should protect you from the worst if your tentant stops paying. Call us now to learn more.
It’s not all good news for landlords though as arrears also climbed, up for the first time since April of this year. As of the end of August 10.7% of all rent was recorded as late or unpaid.
State of the #buytolet market
Jul 14th
With the first half of 2011 behind us, time to catch up on the key buy to let indicators for the year so far. Data from the Council of Mortgage Lenders (CML) paints a slightly mixed, but improving picture:
- Total value of outstanding buy to let loans rose from £151.5 bn at the end of 2010 to £152 bn at the end of the first quarter of 2011
- The average loan to value ratio of a buy to let loan stands at 75%
- 27,000 new buy to let loans were taken out in the first quarter of 2011, up from 22,000 loans in the first quarter of 2010
- Average rents have increased to £692 pcm
So it’s a slowly improving picture, the average LTV makes clear that buy to let is now a mature market for the long term investor.
#buytolet market stalling?
May 19th
Recent figures from the CML (Council of Mortgage Lenders) suggest that the outlook for out buy to let insurance customers might not be as rosy as we thought.
After a rush of surveys claiming that rents were rocketing and that demand was strong, the latest report shows the buy to let market stalling during the first quarter of 2011, the end to three consecutive quarters of growth. Here are the reports headline findings:
- £2.9 billion adavanced to landlords this quarter, 3.5% down on the the previous quarter
- A rise in buy to let repossessions from 1,400 to 1,700
- An increase in the number of buy to let mortgages in arrears
So, what to make of this? All the figures we have seen in the last six months have emphasised the strength of the buy to let sector – demand and rent are still perfoming well.
The problem appears to be the scarcity of competitive funding. Buy to let investors tend to have a lower equity stake in their property than owner occupiers making re-funding more challenging as banks tighten their lending criteria.
Our advice for buy to let landlords is to seek the most competitive landlord insurance they can find, and follow our tips to ensure that they rent out their properties quickly and at the maximum possible rent.
Best places in UK to be a landlord
May 5th
For the benefit of our buy to let insurance holders and courtesy of the Daily Telegraph we present this unnecessarily complicated run down of the UK’s most in demand rental towns.
No surpises for guessing that London comes out tops with a ratio of people searching to available rooms of 8.9.
As the Telegraph’s own list is a challenge to navigate, here’s the run down…
1. London 8.9
2. Luton 8.8
3. Cambridge 7.9
4. Milton Keynes 7.4
5. Portsmouth 6.6
6. Oxford 6.3
7. Watford 6.2
8. Swindon 6
9. York 5.9
10. Brighton 5.7
So – if you have an urge to invest and some buy to let cash burning a hole in your pocket – here’s where to head…
More good news for #buytolet landlords – void period is falling
Apr 18th
More good news for our buy to let insurance customers.
We mentioned last week that rents were on the rise (4% up on average) and that demand for rental property was growing, well there’s even more good news on the way. Recent research carried out by a rival insurance company suggests that void periods (the time when a rental property is empty) is also falling. It’s down now to an average of 2.8 weeks, the lowest it has been since early 2009.
The drivers behind this fall are the same economic issues that have driven up demand and rental prices; uncertainty in the job market, the lack of affordable finance and doubts over the stability of house prices. It’s a situation that’s working in the favour of landlords as they are able to add a premium to the price of their properties in the knowledge that they will rent out quickly.
As if this wasn’t enough good news, the financial options available to landlords are increasing – figures from Mortgages for Business show that there are more than twice as many mortgage products in the buy to let sector than there were this time last year!!