In the years following the financial crisis that struck the UK property market in 2007 and 2008, it has become more difficult for people looking to move up the ladder to find a buyer for their own home.
In the years following the financial crisis that struck the UK property market in 2007 and 2008, it has become more difficult for people looking to move up the ladder to find a buyer for their own home.
Poor mortgage availability and a short fall in desire from buyers lacking confidence in property prices are just a couple of the reasons cited by the 61 per cent who told Lloyds TSB they were finding it difficult to take the next step.
This inability to sell and frustration with not being able to move has led to an increasing number of people letting their home out to fund the purchase of their next home. Mortgage provider John Charcoal reports a 40 per cent increase in this practice in the first three months of 2013 alone.
However, if you decide this is the move for you, its not as simple as just moving out and signing a contract to allow someone else to rent your home from you. There are any number of legal issues to consider, while you will also want to make sure you are covered – insurance is one of the key issues to look at.
As an accidental landlord, you may not be aware of the differences that exist between standard home policies and specialist products, but it is vital to learn about them.
For example, when you move to a new house, it is likely that there will be a void period on your previous abode, whether this is while you are finding tenants or simply making changes to the home that will more suit a house in this market.
When homes are laying unoccupied, it stands to reason that they are more vulnerable to being broken into by criminals. A standard home insurance policy will not cover you for this, and you could be left massively out of pocket covering losses, so getting unoccupied property insurance is one of the first steps in the conversion of a residential abode for the lettings sector.
This cover protects you against nasty outcomes during the periods you are waiting to find a tenant, the time before they move in and any renovation work that you carry out yourself.
Of course, this is not the only issue that you need to make your new venture watertight. Landlords insurance itself differs from that owner occupiers will need. It covers you against the likes of accidental damages, the loss of rental income and legal liabilities if homes are misused by tenants.
Some will also protect you against more substantial losses – if you come up against a tenant who stops paying rent for any reason, for example, your policy can ensure that your earnings are not suddenly stopping. This is vital as an accidental landlord, as many people will be using rental income to cover a mortgage.
Other issues exist within the legal responsibilities of becoming a landlord as well as insurance, and it will be important that you know all of these.
For example, did you know that fire safety is a lot more stringent when you are letting to a third party? You need to make sure fire alarms are fitted and checked along with boilers, while ensuring that all upholstered furniture is fire resistant is unavoidable as a landlord.
If you are looking to enter the rental market as a landlord, make sure you are covered with unoccupied property insurance through Click4Quote.
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