I was astounded to learn that the UK’s private rented housing stock is dominated by landlords who own just a single property each.
According to some research by Countrywide over 93% of landlords in the UK have just a single property and together they account for over four fifths of all privately rented stock across England, Scotland and Wales. Less than one percent of landlords have portfolios of more than five properties.
The fact that the majority of landlords own a single property sheds new light on the importance of protecting their investment. I suspect that for many, their rental property could represent their future income in lieu of relying on a pension. This places greater duty of care on the shoulders of intermediaries with landlord clients, particularly those with a sole rental property.
You can help support landlord clients in a number of ways.
The first may seem a step away from your normal day to day business but it can also open the door to potentially sourcing new landlord business. All landlords need to undertake some form of tenant referencing – and the more accurate it is, the better, as landlords want quality tenants. There is no foolproof way of ensuring a tenant won’t fall into arrears, so a system that factors in the prospective tenant’s propensity to default as well as checking a large number of databases does allow a far more detailed and accurate reference. The system we offer intermediaries for example interrogates more than 25 different data sources in less than 30 seconds and the technology incorporates real time claims experience, helping to identify a tenant’s propensity to default by deriving a credit score.
Of course there is no cast iron guarantee that a tenant’s circumstances won’t change so landlords should protect what is obviously a significant investment. This is another area where you can help as a good, well constructed rent guarantee policy can be available from as little as 0.5% of the annual rent.
The rental market is a highly competitive and periods of unoccupancy may occur. If your client is letting to students, then it’s likely the property won’t be occupied for between three and four months during the summer holidays. If they don’t have the right buildings and contents cover in place, they could find themselves exposed.
Here is where you can really help, by teaming up with someone like SourceLet, taking them through what the various options available do and don’t cover. A bog standard policy may be all they think they want, but if it doesn’t offer them the cover they really need then it’s not worth the paper it’s written on and they will have wasted money instead of spending the right amount for the right cover.
As the rental market continues to enjoy an unprecedented boom and with more single-property landlords likely to enter the market, there is significant opportunity for intermediaries to not only seize but also prove their worth.
Martin Gwynne is proposition manager for SourceLet