landlord insurance uk - buy to let advice

Landlord Insurance UK

landlord insurance uk Introduction - The last few years have seen a large increase in property prices in the United Kingdom partly fuelled by the buy to let phenomenon, many people have now landlord for the first time. Uncertainty in the equity and pensions markets have led many individuals the start looking at property as a good means of obtaining capital growth with the added benefit of a small rental yield each year. Of course becoming a landlord and buying property is not something that should be entered in to, without a good deal of research and there are a number of good publications on the market that can help the new landlord gain an understanding of this exiting part of the property market. The first and golden rule of becoming a landlord is to establish your goals, and treat your activities as if you were running business (which in effect you are). Whilst it’s fair to say that almost all property in the UK has increased in value in the last few years, not all is that easy to rent....

Initial Planning - before making a purchase, it is a good idea to calculate the following:-

Research the local property rental markets in the area you are looking to buy, what is the strength of the market and how much is a realistic monthly rent for the area.
What will your purchase costs be ( solicitors fees etc)?
If you are going to use the services of a local property letting agent, what will their charges be?
What rate of mortgage can you acquire and how much deposit must you put down?
What type of insurance are you going to purchase ( as a minimum, any lender will require you to take out a building insurance policy)?
How much will you require to find to bring the property up to rental standard?
How much should you put away each month for non insurance repairs( remember that not all repairs will be covered by a building insurance policy, insurance is designed to cover you against sudden and unforeseen events, it is not a maintenance contract?

Buy to let landlord insurance uk for as Landlord is a must, it will provide you with asset protection in case you property burns down (it will also be a requirement of your mortgage) and if you purchase certain other covers, it can help give you peace of mind as well. There are a number of types of contract that you can purchase and of course what you decide to buy depends on your own personal circumstances, to help you decide, these are the most common types of landlord property insurance available on the UK market today.

Building Insurance - This is a must, if you are applying for a mortgage; you will find that the lender will not release the funds to you until a suitable policy is in force. With buy to let they will usually let you arrange your own cover so as you can shop around for the best deals, but they will want their interest noted under the contract wording. (This is easy to do and it usually just involves writing the lenders name on the schedule of insurance and sending a copy to them in the post. The landlord insurance uk policy you arrange for the building must cover a list of perils as specified in the council of mortgage lenders hand book. It will also have to be suitable for a property that is being rented out and as such the liability section of the policy must give you adequate protection in respect of this. This type of policy is readily available now from many sources and often the premiums are not too much higher than you would expect to pay for your own home insurance. A number of factors affect the rating such as the sum insured, location of the property and the type of tenant that you have let the property to.

Contents Insurance - Most landlords do not leave a great deal of contents in their property, in many cases it is only a few thousand pounds. What ever is left has to comply with the furnishing regulations and because of the fact contents can receive a higher degree of wear and tear in a rental property and needs to be replaced on a fairly regular basis, it is often not insured. It is a cheap form of insurance and most insurers are willing to provide cover even for only very small sums insured. One of the advantages of taking landlords contents insurance is that you should receive the liability insurance cover that attached to the supply of the contents to the tenant.

Rent Guarantee Insurance - Whilst not a form of landlord property insurance, this type of contract is available to cover situations where the tenant does not pay the rent. The premium is usually calculated as a percentage of the sum insured and cover has to commence at the start of the tenancy agreement ( so you cannot take out a policy when you suddenly discover that you have a problem tenant. There is a usually an excess (the first portion of the loss that you have to pay) and this is almost always one months rent. To qualify for this cover, you will be required to take a reference on the tenant and there are quite a few agencies that will perform this service for you.

Emergency Assistance - This type of policy will cover domestic emergencies at the insured property. Very handy if you are a landlord that does not live in the UK or do not want to be disturbed when there is problem at the property. The definition of what exactly is covered seems to differ from insurer to insurer so you really will have to examine the policy wording very carefully but you should expect such things as failure of the primary heating system to be covered etc. There is usually a sum insured up to which items are covered and you do not normally have to cover an excess. One of the other advantage of this policy is that one call to the insurance companies helpline and they will very quickly be contacting local tradespersons to help sort things out, as the problem will be insured, you should receive a quicker call out. Further if you live quite a way from the property, you may find it difficult to source local tradespersons plus if you have a full time job, could you really stop what you are doing to coordinate an emergency at the property ( ask any one who has been ringing around to find a plumber during the winter months, it can take hours.

Legal Expenses Insurance - Although a very undersold optional extra, this type of insurance is very valuable and often does not cost a great deal of premium. A variety of covers are available depending on where you buy the cover from You can expect to receive cover for breech of tenancy agreements and defence against prosecution cover for your self. Usually a 24 hour help line is included so if you have any queries relating to your ownership of property as a landlord, you can ring and speak to someone, this service is normally available 24 hours a day.