Once the go-to choice for canny investors, the shine has come off the buy-to-let market over recent years.
Intervention by the government, introducing changes to the tax breaks available to landlords and hiking up the stamp duty charge, has taken its toll. Lending criteria has been tightened up and additional red-tape measures including more onerous health and safety rules and licensing requirements have added to the administrative burden.
At the same time, uncertainty in the housing market – especially in the boom areas of London and the south east – has meant that investors can no longer be certain of earning a reasonable yield from their investments.
However, while it’s undoubtedly much tougher than it used to be, investing in property still appeals, as interest rates for savings remain low and economic uncertainty prevails as the shadow of Brexit continues to hang over the country.
As a significant proportion of the so-called ‘accidental’ landlords – those who by circumstance or accident end up with one or two properties – have exited the sector given the increased costs and red-tape, it’s arguable that buy-to-let has perhaps become ever more professionalised. Individuals and companies are adopting a more rigorous approach to buying the right properties in the right areas, and are taking a more long-term view of their investment rather than expecting quick capital growth.
With the additional work now involved in being a successful landlord, the team here at The Source are here to help reduce some of the administrative burden – at least when it comes to securing the right insurance to protect their investment.
We’ve enhanced our buy-to-let policy to provide a comprehensive proposition. In addition to cover for the building and contents, it includes home emergency cover for heating, electrical, gas and plumbing issues – a valuable element of the policy to ensure a quick response should an issue occur. It also includes rent guarantee which ensures the landlord’s income is secured if their tenant is unable to pay their monthly rent. Equally important, liability cover for employees such as cleaning staff or gardeners as well as for the property owner in case a third party is injured at the property is also included.
And recognising that sadly not all tenants respect the landlord’s property, our policy provides cover for malicious damage and theft by tenants. Another important feature of our cover is legal expenses – invaluable cover if the landlord has to take steps against a disruptive tenant such as eviction and repossession.
We know that arranging the insurance represents yet another step in the mortgage process so we’ve streamlined our platform to make the online journey easier and much quicker for brokers. Including the ability to quote for limited companies online without fuss.
And we back this up with a dedicated team of experts on hand to provide one-to-one support if additional advice is needed.
While it’s undoubtedly going through a period of change, the buy-to-let market is here to stay and landlords remain an important part of any intermediary’s business. We’re here to help you help them secure tailored insurance protection for their investment.
Brian Coulton is head of intermediary at the Source