Category Archives: Landlord Insurance

Can you afford to use price comparison sites?

Image shows the lavishness of comparison websites' spending on advertising which you pay for.

An irritating opera singer, men in hotpants, James Corden and some meerkats

Can you AFFORD to use Price Comparison websites?

Landlords and Letting offers all kinds of landlord insurance at great value prices. One way to help keep these insurance products very competitive is to NOT appear on so-called price comparison websites. And of course it must be said that not all insurance providers do appear on these sites.

Almost all price comparison sites, whether they are comparing insurance, meals out or anything else, have to charge the companies that appear there a lot of money. This is simply because the sites themselves spend a large fortune advertising themselves in the most lavish of ways.

And who do you think ends up paying for this advertising? Yes, you guessed it!

Comparing The Meerkat and the Market

Take the ludicrous and massively over-the-top Compare The Meerkat campaign. Some overly creative and no doubt overly paid whizz in a Soho or Covent Garden ad agency obviously saw that ‘Compare The Market’ was very similar to ‘Compare The Meerkat’. So they must have thought ‘Let’s have a campaign based on meerkats and let’s call them Aleksandr and Sergei and they can have a Russian accent’ (Why?!)

The latest incredibly lavish productions show Aleksandr and Sergei encouraging people to go to the movies. You don’t want to go to the movies, you want the best buy! They even have a special website for you to view their gorgeous creations! If you have seen the ads, can you even begin to imagine how much this self-indulgent nonsense costs? It’s a price comparison site – not the latest Disney blockbuster!

Men in hot pants and and just one irritating opera singer

Then there are the ads showing an irritating opera singer flying through the air, or eating a cornetto or whatever and Confused.com has the ubiquitous James Corden driving across America. I think we’ve all had enough of him haven’t we? And of course there are those awful excrutiating Moneysupermarket ads with inexplicably camp men walking about in hot pants or dancing with an equally camp Skeletor. All of these cost a fortune to make and indeed the TV time alone must be incredibly expensive.

You are probably the one paying for this nonsense!

And it all has to be paid for. And you will probably be the one paying for it because you can only be shown those companies who pay the price comparison sites to be listed and those companies have to cover this cost somehow. I cannot categorically state here that you will pay more by using the sites mentioned and I know that to some extent the economies of scale will play a part, but you can be sure that you are very unlikely to GET THE BEST DEAL by only shopping on price comparison websites. Simples!

 

Landlords and Letting – Affordable Landlord Insurances
NOT on price comparison sites.

Letting Agents – landlords should avoid them!

Landlords – how to save around £5500 letting your property

Letting agents charging outrageous fees to landlords

There has been a lot of discussion recently about how letting agents regularly rip off tenants – and they do. The government is belatedly introducing legislation to restrict their fees to tenants. But they also rip off landlords and whilst it’s difficult for tenants to avoid them, it’s much easier for landlords, as long as their property is local.

Given letting agents outrageous fees to landlords, it’s incredible they have the nerve to invent all the other charges they make to tenants – that’s why most tenants and landlords alike dislike them.

Letting Agents’ charges to landlords

Agents love to talk in terms of percentages because it enables them to disguise the iniquitous levels of charging they engage in. So let’s take a property that the rent is £1500 per calendar month. I have taken as an example the quoted fees of a well know high street agent, which do include landlord rent guarantee insurance.*

I am assuming the case of tenants who remain in the property for a total of two years…

These agents charge 7.5% plus VAT for Sole Letting Rights – this means that WHOEVER lets the property this agent gets their cash.

The real costs of using a letting agent

  1. Letting fee for let only will be £1500 x 12 x 7.5% = £1350.00 plus VAT for the FIRST year, paid in advance.
  2. Let’s say you are stupid enough to use their ‘Full Management Service’. This involves collecting the rent – it just goes into their account before eventually going into yours. They deal with everyday calls from the tenants and make 6 monthly inspections etc. Add an EXTRA 6% plus VAT. So that’s £1500 x 12 x 6% = £1080.00 per annum extra plus VAT.
  3. Providing you with an Inventory – between £140 – £200. So, let’s say £170 on average.
  4. If the same tenants simply decide to stay on in the premises which involves the agent in doing VIRTUALLY NOTHING they will charge the landlord another 7.5% plus VAT – Yes ANOTHER fee, amounting to £1350.00 plus VAT

Let’s add up all the bold figures because they are indeed bold. That’s £1350.00 x 2 + £1080 x 2 + £170.00 = £5030 plus VAT where applicable.

So, you let a flat or house for £1500 pcm and end up paying the letting agent £5030.00 plus VAT, which is £6036.00! 

Even if you only elect for the let only service, over two years it would cost you £2700.00 plus VAT which is a massive £3240.00. And all this is paid up front at the beginning of each year.

Letting agents fleecing the tenants as well

So the letting agents get all this money from the landlord then they proceed to rip off the tenants for even more money!

They have various ingenious made up charges, such as ‘Administration Fees’, ‘Checking In Fees’, ‘Checking Out Fees’.

Then there’s the scandalous ‘Holding Fees’ to retain a property while referencing is carried out. It is reasonable to withhold them in the event that the tenants change their minds. But they also withhold these fees in the event that the references come back as unsatisfactory. These fees can be as much as £700 – £800. They probably hope they’ll come back as unsatisfactory.

Some letting agents charge tenants for ‘drawing up the Assured Shorthold Tenancy’ document’. This takes about 15 minutes to revise a template on their system.

And then there is referencing. Charging for this is justified, but for tenants in full-time employment with proof of previous address etc it COSTS around £10.00 per tenants. Many agents charge around £60 – £70 per tenant.

If you’re a landlord and you can, just let it yourself

As a landlord you can list your property on the main portals like Rightmove, Zoopla, Primelocation etc, using companies that will charge you around £60.00. You then ensure that you THOROUGHLY reference any prospective tenants rather than saying to yourself ‘Oh they seem such a nice couple’.

Don’t forget Landlord Rent Guarantee Insurance

Then you buy Landlord Rent Guarantee and Legal Expenses Insurance* – we do it for about £105.00 per property per year.  This insurance pays your rent in the event that the tenants stop paying for any reason and the legal team then go to work to evict the tenants as soon as possible. Strict tenant referencing is a requirement of this insurance. Let’s assume you charge the tenants for referencing, which is reasonable then your total outlay over two years will be about £170.00.

So it’s your choice. Pay a letting agent £3240.00 or £6036.00 including VAT or spend £170.00 letting it yourself. Some agents will charge even more than the amounts quoted above and some will negotiate for less but as the Americans say, I think it’s a no-brainer.

 

LandlordsandLetting – Affordable landlord insurances

10 years of anti-landlord legislation from Tony Blair to Theresa May

10 years of anti-landlord legislation. Why?

What a difference a decade makes!

At the time of writing (2017) over 100 new pieces of landlord legislation have been introduced since 2007 to make life more difficult for the small private residential landlord, whilst favouring major corporate ones like insurance companies. Why have there been 10 years of anti-landlord legislation?

It used to be The Bankers (and rightly) but increasingly since 2007, private residential landlords have been the target for a relentless onslaught of legislation by central and local government. I think that no other group in society has been attacked so relentlessly and unjustly and there is a reason for this.

Tories join in the landlord bashing

Labour politicians have always hated private landlords and have passed legislation to control rents and other aspects of letting ever since the 1960s. It’s in their DNA. But in recent years, the so-called Conservative Party has enthusiastically joined in the game. They have proclaimed that evil greedy private landlords are preventing ‘young first-time buyers’ from getting on the proverbial property ladder by snapping up available property.

But I suspect that these crocodile tears for dispossessed first-time buyers are really there to hide their true aim. And that is to corporatise the private rented sector. For years, City institutions have looked on enviously at the returns private landlords were achieving and have been upset that such investors have shied away from their rip-off pension funds. Add to this the derisory interest rates of recent years and you can see why so many people have felt that investing in buy-to-let was their only viable option.

Now, whilst I totally support legislation that genuinely tackles rogue landlords, the problem is that much of the new legislation and regulations actually hit the decent law-abiding landlord. Rogue landlords don’t give a damn about HMO rules and registration etc. And if they want to get a tenant out they don’t bother with Repossession Orders etc they just go round there and intimidate them until they leave.

List of 10 Years of Anti-Landlord Legislation

Here is a list (not in chronological order) of only the most prominent anti-landlord legislation of the past 10 years.

  • In 2007 the government introduced the law requiring landlords to deal with security deposits in a prescribed manner. Generally I believe this was good thing but it does add to the bureaucracy involved in starting a tenancy. And if you don’t comply it can lead to the landlord having to compensate the tenant with up to three times the deposit amount and also forfeit the right to issue a Section 21 Notice.
  • Recently the government made it a legal responsibility for all landlords to issue tenants with their How To Rent booklet.
  • Landlords also now have to check on a prospective tenant’s RIGHT to rent. The landlord is supposed to act as an unpaid immigration official and check that the tenant has the right to live in the UK. Saves on immigration officers though I suppose.
  • Since October 2015 all landlords have a statutory obligation from day one to supply and install working smoke an carbon monoxide alarms on every floor that may be used wholly or partly for accommodation. They have to demonstrate how to use them and then get the tenant to sign to say that they have been shown how to use them!
  • Any property of 3 or more floors and/or housing five or more people not living as one household is classed as an HMO (House of Multiple Occupation). And every HMO (unless you’re a rogue landlord of course) requires guess what? A Licence from the local authority.
  • And talking of licences and ways local authorities can prey on landlords, many local authorities now require EVERY let property to be licensed and of course that costs more money. They don’t actually DO anything except take the money off the landlord and eventually email him or her a certificate – a nice little earner indeed.
  • By Law, all tenants have to be supplied with an Energy Performance Certificate (EPC). Who the hell reads those things anyway?
  • From April 1st 2016 Boy George introduced some draconian disincentives to landlords before he was finally sent packing by Mother Theresa. It is very complex but the first tax change was a gradual lessening of the allowable mortgage interest expenses on buy-to-let mortgages. This will eventually drive many landlords away from buy-to-let completely – depending on how heavily leveraged they are.
  • Osborne also introduce legislation that means that anyone buying a buy-to-let property has to pay 3% more Stamp Duty Land Tax (SDLT) than if they were buying for owner occupation. However, if you – or should I say, a large company, buys six properties or more simultaneously then the SDLT is significantly LESS than even an owner occupier would pay. It’s classed as a ‘commercial purchase’ for tax purposes. Guess who that benefits?
  • He also made changes to WHEN a landlord has to pay capital gains tax on a property he or she sells. Originally you had until the next tax year but now I think it has to be paid within three months of completion. You will need to check on the precise period as I am not sure.

Complexity of Anti-Landlord Legislation

You see, the main reason that these 10 years of anti-landlord legislation favours corporate landlords is the fact that it is so labrythine! It’s so complex that even small professional landlords find it hard to navigate. However, if you are The Prudential or similar then you just employ a specialist landlord and tenant lawyer full-time – easy!

So how long before landlords decide enough’s enough?

The only reason that so many small private landlords are continuing is that there nowhere else for them to invest. Stocks and shares are doing well at the moment but they are risky. Pension schemes are notorious for ripping-off people and who is going to invest their money in a so-called safe bank and get 1% interest if they’re lucky?

I predict though that if interest rates do eventually move upward by even a relatively small amount it will cause a massive earthquake in the UK property market because there are many older reluctant landlords who would much rather get at least a modest return on their savings than endure these increasing attacks from government.

More than ever Landlord Rent Guarantee Insurance matters

Given the mounting anti-landlord legislation it makes more sense than ever to have Landlord Rent Guarantee and Legal Expenses Insurance. It costs just over £100 for 12 months cover per property from LandlordsandLetting – this covers up to five named tenants in that property.

 

LandlordsandLetting

Affordable landlord insurances

Is there a future for traditional estate agency?

view of traditional estate agents for sale and to let boards

I was prompted to write this after receiving something in my email inbox about how traditional estate agencies are suffering in the current Brexit market.

Estate Agencies on the High Street

Once upon a time, if you were looking to sell, buy or rent a property you would either check out the ads in the local paper and/or wander down the local high street and have a chat with people in the local estate agencies. People do still do this, but a huge and increasing number now simply go online, usually heading straight for the main portals like Rightmove, Primelocation and Zoopla, or maybe the agents’ own websites.

Nowadays, there are agents set up to exploit this new world, such as Purplebricks.com who just charge vendors a fairly low fixed fee to market their property. Of course this does save vendors a huge amount but only if the property actually sells, because of course, traditional agents’ fees are dependent on the sale actually completing.

Agents’ high commission

But it is true that with astronomical property prices (in some parts of the UK) the traditional agent’s 1.25% fee actually can translate into a huge amount of cash. It’s not uncommon in London and the South East for quite ordinary properties to sell for £700,000 or more. At only 1.25 % this means that vendors are having to give the agent £8750.00 PLUS 20% VAT. And for agents who are charging 1.5% it amounts to a staggering £10.500 plus VAT!

The High Street Estate Agency – who still needs it?

However, estate agents will rightly point to the huge expense of maintaining a high street presence and having to spend money on expensive newspaper advertising. But are either of these really necessary anymore? How many people actually bother to visit a high street agent with all the problems of city centre parking etc? And do purchasers really pay much attention to the local paper even? Not only are printed ads often out of date but sadly, local papers, like so much other printed media are in serious decline.

Perhaps the future lies in much more ‘stripped-down’ a la carte estate agencies, where they do not maintain high street offices but work out of ordinary offices not in city centres. Furthermore they would not advertise unless the client wishes to pay for it and rely almost entirely on web interaction. This would mean that fees could be much less and still allow the agents to make decent profits.

Landlords and letting property

As for lettings agencies, I think much the same applies. In fact, as a landlord unless you live far away from your rental investment, it really does not make sense to use an agent at all. You can now use companies who will let you access the main property portals for a very small fee. However, if you do not use a letting agent , obtaining Landlord Rental Guarantee and Legal Expenses Insurance together with thorough referencing is even more important – but still much cheaper than using an agent.

I am sure that, except for selling, renting and buying the most prestigious and up-market properties, the future is in this much more ‘stripped-down’ letting or sales agency.

 

Landlords and Letting – Affordable Landlord Insurance

Can you afford NOT to have landlord rent guarantee insurance?

NightmareTenantsSlumLandlords

Image Copyright Channel 5 – link no longer working

As buy-to-let has increased massively across the UK, partly due to the lamentable return on other kinds of investments, so too have the horror stories of nightmare tenants. First they suddenly stop paying the rent and when the hapless landlord finally evicts them, he or she is faced with possibly several thousands of pounds repair bills.

As a landlord, even if you’ve been lucky enough to avoid these vile people you probably know of others who have fallen prey to nightmare tenants. Just take a look at ‘Nightmare Tenants, Slum Landlords’ on Channel 5 and you’ll see dreadful cases of how a small minority of tenants can make life an absolute hell for small-time landlords.

Landlord Rent Guarantee & Legal Expenses Insurance

Admittedly there are also rogue landlords out there who equally make life hell for their tenants but that’s not what this article is about. This article is in fact about the importance of taking out Landlord Rent Guarantee and Legal Expenses Insurance – rogue landlords don’t need this insurance as they use other rather more direct methods!

In fact, the problem IS rogue landlords because I believe that it’s because of them that the law is absolutely on the side of tenants when it comes to eviction.

Firstly you need to have approved grounds for evicting the tenants, usually non-payment of rent or anti-social behaviour in your property. Then, if they won’t go voluntarily, you need to serve a Section 21 Notice.

And a Section 21 will only be regarded as valid by a court so long as the landlord has properly protected the security deposit and complied with various other procedures that now cover the commencement of any tenancy.

A Section 21 cannot be served during the first four months of tenancy. Once a Section 21 is served the tenants must be given two months notice to quit. If they fail to leave then you need to seek a Possession Order – this can easily add another month and then if the tenants ignore the Order you’ll have to spend more money and time getting bailiffs to physically evict the tenants. And in this case you should always upgrade the Order to the High Court so as to make use of proper bailiffs.

It could easily cost you around £6000.00

So, all in all it could take at least four months to evict bad tenants and often longer! In all that time you will be losing rent and ranking up legal costs. On an average property this could easily amount to well over £6000.00!  And then you will probably have extra refurbishment and cleaning costs to deal with the mess that’s left.

We are agents for Landlord Rent Guarantee & Legal Expenses Insurance, but even if we weren’t, I’d still say that at only £99.95 per property for 12 months’ cover it’s incredible value.

To maintain this low cost, tenant referencing is a condition of this insurance and it’s important to follow the correct procedures relating to taking and protecting the security deposit. If you need more information about this insurance and/or referencing just email us at info@landlordsandletting.co.uk

However, even if the tenants seem nice, strict referencing should ALWAYS be carried out whether you are taking out rent guarantee insurance or not.

What does it cover?

The premium covers your rent up to a maximum of £3000.00 pcm, with a maximum payout of £25000.00 per claim and covers up to five named tenants in the same property. After the first month your rent will be paid per month and our legal team will get to work to evict the tenants as soon as possible and, if appropriate and possible, recover costs to cover damage not covered by the security deposit. You also have the option to have your rent paid without the one month ‘grace’ period – this costs a little more at £129.95 for 12 months.

So, can you really afford NOT to have this insurance?

 

Landlords and Letting  – Affordable landlord insurances

 

 

Block insurance – why you may be being overcharged

blockofflats

Block Insurance is essentially the overall buildings cover for blocks of flats. It covers risks to the basic structure. Essentially it is bought by the managing agents, the freeholder or whoever has overall responsibility for the block’s structure. And often leaseholders are paying over the odds for it and sometimes they can do something about it.

Can YOU choose who provides your block insurance?

Virtually all flats, whether in purpose-built blocks or conversions, are held in leasehold. The leaseholder has the property for the term of the lease (99 – 999 years) after which it reverts to the freeholder. In between these two parties there is usually a managing agent. Usually it is the managing agent who selects the block insurance for the property.

Sadly, if you have no control over the management of your block it is often the case that the freeholder/managing agent actually know they are paying too much for the block insurance. I’ll leave it up to your imagination why this might be.

Take back control (to coin a phrase!)

However, if you DO have ultimate control over the managing agents then this article may be of interest to you. It’s worth checking that you and the other leaseholders are not paying more than you need to for the block buildings insurance. Certainly if you have a share of the freehold then you should speak to the directors of your residents’ company and check that you and all the other residents are not ‘paying over the odds’ for your insurance.

We offer very competitive rates on block insurances and all the policies are underwritten by major insurers.

Why not get a quote today. Either email info@landlordsandletting.co.uk or call 0800 783 1626, quoting ‘Landlords and Letting’.

Landlords and Letting – affordable landlord insurances

 

 

Why landlord rent guarantee and legal expenses insurance matters

It’s great once you’ve found what appear to be good tenants and you can finally breath a sigh of relief that at last you’ll be getting rent in to cover your own expenses. And if you let the property yourself you will be saving a lot of money by not employing a letting agent.

The problem for landlords letting property themselves, though, is that they can sometimes be a bit too trusting. That young couple who turned up at the flat seemed so nice and they both appeared to be friendly and have good jobs…don’t they? The thing is that rogue tenants are more likely to go for property that’s being let direct by the landlord rather than going via letting agencies. This is because agents are VERY strict and always rigidly reference tenants and they tend not to be as easy going as the landlords themselves.

And of course, that nice couple may actually be nice but they might lose their jobs…or split up.

So, if you’re letting your valuable property yourself it really is advisable to get some form of rent protection insurance. Not only will this insurance kick in and pay your rent if the tenants default but it will also arrange and cover the cost of expert legal help to evict the tenants. The other aspect is that practically all Landlord Rent Guarantee policies require that the tenants are scrupulously referenced and their identity firmly verified. This aspect alone tends to scare of dodgy tenants.

It usually costs only around £100 a year for up to several tenants and given that you’re likely to be saving many £100s by not using a letting agent, it really does make good sense to take it out!

LandlordsandLetting offers Landlord Rent Guarantee and Legal Expenses Insurance from as little as £53.00 for six months’ cover or £99.00 for 12 months.