Insurance more important than ever as regulation 'worries landlords'
Property professionals
29th January 2010
Landlords are warned that the growing burden of regulation in the private rented sector means that it is more important than ever to have effective insurance policies in place. According to Giles Insurance Brokers Ltd, it is vital in such circumstances that property professionals are well protected against unconscious breaches of legislation or other unexpected occurrences.
The company's comments follow a recent study by Paragon Mortgages, which suggested that red tape is the issue of most concern to landlords, worrying six out of ten respondents to a poll. John Heron, managing director of the firm, suggested that those in the sector "have to comply with a myriad of regulations" and are affected by an estimated 50 acts of parliament and a further 70 sets of rules. His comments come as the Treasury conducts a consultation into whether or not the Financial Services Authority's remit should extend to regulating the rental property sector.
Specialist insurance may also be of assistance with the third most widely held concern among landlords - tenancy disputes, many of which can prove costly to landlords. This is of particular interest as the Department for Communities and Local Government's Survey of English Housing forecasts a possible rise in demand for rented accommodation over the coming years.
Tom Entwistle, editor of LandlordZONE, recently suggested that planning decisions carefully and buying sensibly can ensure that professionals in the market secure their future, as "property is still one of the best options when you look at where to invest your money for the future". His remarks come after a study by Upad.co.uk found that almost two-thirds (64 per cent) of UK landlords felt more positive about the prospects of the buy-to-let market this January, up from 58 per cent the previous month.
Additionally, Paragon Mortages discovered that ten per cent of landlords have plans to expand their portfolios during the first three months of 2010, with the majority (65 per cent) looking to buy a terraced property. However, many found that it was more difficult to secure a remortgage to do so than it has previously been, indicating that finance in the sector still remains tight.
With signs that buy-to-let markets are starting to rally, landlords are advised by Giles Insurance to check their insurance carefully to ensure that their expansion plans are not affected by any incidents that may occur.
Commenting on prospects for the market in 2010, Howard Pearson, retail managing director of Giles Insurance, explained: "Following a particularly challenging year in 2009, many landlords have managed to weather the worst of the storm and recent figures point to better conditions during 2010.
"However, rental property owners are still facing a slew of regulations and responsibilities that can be daunting and it is vital that they have adequate insurance cover in place to protect the future of the investments as demand increases and lenders start to make finance more available to landlords looking to expand their portfolios."
Giles Insurance can source policies and products for those in the rental property market which include, but are not limited to, loss of rent, damage by tenants, 24/7 home emergency cover, buildings and contents insurance and legal expenses products.
