Increasing number of landlords failing to renew Rent Guarantee Insurance
Following on from January’s insurance policy analytics, we are saddened to report that more and more landlords are choosing to take on additional incalculable financial risks instead of renewing tax deductible Rent Guarantee Insurance policies. This choice is driving landlords profits through the floor as more tenants fail to meet their AST conditions.
January’s statistics revealed that up to 20% of landlords were failing to renew their RGI policies in the last quarter. The main reason behind this was because the landlord had carried out thorough tenant referencing checks beforehand, the tenant had consistently paid throughout the tenancy and so they saw no need to renew their policy.
Although since then at Rent Safe UK we are convincing more and more landlords to take out Rent Guarantee with he added benefit of their first reference free, the trend, unfortunately, continues as more fail to understand the importance of renewing their policies year on year with the trend going up to over 50%.
DID YOU KNOW:
- • Growth in unsecured debt such as loans, credit cards and overdrafts is at nearly £10,000 per household.
- • The most up-to-date NLA statistics (2016) show that 35% of landlords experienced rent arrears and 29% had their properties damaged by tenants.
We all know that anything can happen in this turbulent economy post-Brexit. So landlords who heavily rely on mortgage payments to stay afloat would be wise to take out and continually renew a comprehensive policy. After all, when a tenant falls into arrears their rent payments will usually come to an immediate halt for several months – especially if the landlord has to go to court to evict the tenant.
Paul Routledge, CEO of Rent Safe UK, said:
Having been a landlord for 25 years, as I reference my tenants properly and have good tenants in my properties (you may think I’m mad) but because none of them burnt the property down this year I’ve decided that I won’t be renewing my building insurance next year… Although my cars worth £50,000 I’ve also decided to take 3rd party insurance next year as I didn’t have a crash this year; it’s a risk, but think of the extra money I’ll save. Furthermore, I haven’t had a heart attack this year so I’ll be cancelling my medical insurance too…
I am (of course) joking, but this is the attitude of many a landlord out there and it makes no sense at all! Why would any landlord take the risk of incurring thousands of pounds worth of rent arrears and/or property damages instead of investing in (and renewing) a £110 tax deductible Rent Guarantee & Malicious Damage policy that provides upto £50k worth of cover?!
Only this week the Rent Safe UK team have heard from a distressed landlord looking to make a claim, only to discover that they forgot to renew the policy 4 month ago ! Although they have uploaded the tenant onto the Tenant Referencing UK database, they now have to deal with £4,000 worth of malicious property damage alone. It’s such a shame, as this dire situation could have easily been avoided. [ CLICK HERE ] to read this landlords story.
You wouldn’t fail to renew your buildings, health or even pet insurance – well the same goes for Rent Guarantee Insurance, considering the average cost of loss of rent and an eviction can be as much (and more than) £10,000.
Protect your asset year on year and safeguard your yields with practical RGI products from RentSafeUK.