Insurance News Landlord Insurance Essential For Buy To Let Homeowners
19 July 2010 / by Rachael Stiles
Homeowners who are waiting for the housing market to improve, and becoming unlikely landlords in the meantime, should make sure they have sufficient landlord insurance, says moneysupermarket.com.
With house prices still wavering, and ongoing uncertainty in the housing and mortgage market, some homeowners are opting to let their property out instead of putting it on the market.
But the comparison website is urging these homeowners to ensure they have adequate landlord’s insurance, to cover again loss of rental income and other risks, because standard home insurance is no longer valid once the property is used to generate income.
While first time buyer mortgage finance remains tight, would-be buyers are on the lookout for rental property, but buy to let mortgages are starting to become more competitive, so there has been an influx of would-be sellers becoming landlords.
With a third of landlords having tenants in arrears last year, moneysupermarket warns new landlords not to make the rookie mistake of having insufficient insurance for landlords , which at less than £100 a year, does not have to cost the earth.
Commenting, Julie Owens, head of home insurance at moneysupermarket.com, said: “Whether you’re looking at buy-to-let property for investment, extra income, or because you cannot sell your house, it is essential to have sufficient insurance to cover any financial losses connected with letting out a property.”
Ms Owens advises all landlords to consider the different levels of cover available, which can include Rent Guarantee cover for legal expenses, which can become expensive if relations go awry between the landlord and the tenant.
“I advise insuring yourself against these circumstances before they arise,” she said, as “it is always better to be prepared and there are a number of suitable insurance policies for landlords on the market.”
Because there are varying levels of cover available, it is “essential to do your research” and compare landlords insurance to find the policy “that is the best fit for your circumstances”, Ms Owens added.
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