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The emerging landlord - Insuring for success

Friday 20 April 2018

By Tom Cooper

There’s no doubt that it’s been a time of unprecedented change in the housing market and the private rented sector. 

If you were to believe everything you read in the media, you would be forgiven for thinking that it was all doom and gloom, negative equity, and people planning their exit strategies.

Headlines have focused on the onslaught upon landlords – the Section 24 tax increases, Capital Gains Tax, Universal Credit arrears, more licensing rules, increased stamp duty, tougher lending criteria, Right to Rent legislation, the social housing crisis, tenant deposit caps, Brexit uncertainty – the list goes on and on. 

But curiously, the landlords we spoke to were not painting quite the same dark picture…
 

Meeting the challenges

Many landlords were clearly adapting to the new environment, spotting new opportunities, and adapting their investment strategies accordingly.

Change of any sort is to some extent a risk factor, and as insurers we’re in the business of risk.

We wanted to find out how landlords were meeting the challenges they face, and protecting themselves for the long term – and how we as insurers could help to support and enable different strategies by mitigating risk and adapting our products. 

So we undertook original research looking at the emerging landlord

What we’ve discovered is that the private rented sector is increasingly polarised – by geography, experience, and above all, the size and composition of landlords’ portfolios of investment. 

Attitudes split most dramatically between those who own more than one property and those who do not.  One man bands, accidental and part-time landlords are being hit the hardest, and feel most negative about their future. This is a large part of the market, and it’s perhaps unsurprising their view has therefore skewed broader perceptions – and media coverage – of prevailing market conditions. 

Professional landlords on the up

Meanwhile, the bigger the portfolio, the more positive the outlook. And it is the landlords positioned at the larger end of the market – or aspiring to get there – who are least fazed by changes, and best poised to take advantage of increasing demand, bargain stock being sold off, and stable house prices. 

Indeed, estate agent Savills estimates mainstream rents in the UK will rise by 19% in the next five years, and house prices by 13%. For those weathering the storm, sitting tight or investing for the long term, things are far from bleak. 

But this is certainly the age of the professional landlord. Keeping abreast of legislative changes and market forces is essential, as is researching and sourcing investment opportunities. 

Insuring for success

As Simple Landlords we would, of course, also say that protecting yourself and your investments is now more important for growing landlords than ever. 

While every penny of profit counts, we strongly believe that high quality insurance, at the right level for your personal risk can help free landlords to diversify their strategies and think differently about how, when and where they invest. We’re the safety net that lets YOU take the next leap. 

Yet we’ve found that not all landlords are taking advantage of specialist landlords insurance – with one in four using home insurance policies instead, which don’t cover all your letting risks. Meanwhile, not everyone is looking at quality markers, adapting policies for different properties and tenants, or taking advantage of portfolio discounts or savings from switching providers.  

We want to support this emerging community of aspiring and professional landlords to grow their portfolios and profits with our back-up. 

The emerging landlord report has therefore become both an insight into those landlords, and a guide to how they can use insurance to their ongoing advantage. 

It launches today at the Property Investor Show in London, and I hope you find it an interesting read.

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We want to add value to landlords with interesting news and views! Our Hub includes information and opinions on the housing market from a variety of expert sources – please just be aware it doesn’t always reflect Simple’s opinion, or the products and services we provide.