If you’re a landlord and rent out a property then you may be aware of the recent changes and restrictions that are being introduced this year. Changes including the letting fee ban and new taxation rules are planned to commence which could see adjustments to received income.
Over the next four years, the government will phase out higher rate tax relief on mortgage interest for buy-to-let. This means it will cut back to a maximum 20% in a move set to hit profits among highly leveraged property owners. The ban of the letting fee could also see big changes being made to both tenants, landlords and the property market. The result of these regulations means that it has never been a more important time to ensure that the appropriate insurance policies are in place for your property and your tenants.
This extract taken from a recent article from the Negotiator magazine explains more in detail of Lime’s approach of the importance of having the right insurance policy with a trusted letting agent.
Lime, a letting agent in Hull, goes even further and offers a service where it takes out policies in its own name so on the rare event a claim does arise, it is able to handle the process itself, taking all the hassle out of the process for landlords.
“By arranging the policy through Lime the landlord will get a heavy reduction in the cost of the product and as the policy refers to Lime we can handle the full process on their behalf should a claim need to be made,” says the agent’s Managing Director Sam Humphreys.
“We would make a claim to the insurance company who would not only cover all of the unpaid rent, but also all legal costs should the tenant need to be evicted. The policy will continue to cover rental payments until vacant possession is achieved, thus maximising the returns on the landlord’s investment. We work with the allocated solicitors in order to achieve this, meaning the landlord can remain hands-off and still receive their monthly rent as normal.”
Since beginning to offer such policies to landlords five years ago, Humphreys says it has proven hugely popular, with an estimated 60-65 per cent of landlords on its books now signing up. The high up-take is a win-win for both parties, he says.
“Not only does it make our conversations to landlords easier when informing them of non-payment, but as we are in a commission-based industry, should the tenant fail to pay their rent, Lime also suffers a loss of income. With the rent guarantee policies this isn’t the case as we can still deduct our management fee from the claimed rent.”
To read the full article click here.