Landlords 'should protect themselves against arrears'
by Sarah Ashcroft
Landlords need to ensure they are taking action to protect their finances in case a situation arises where a tenant is unable to pay their monthly rent.
An article published in This Is Money says the fact that many individuals are falling into debt due to the current economic climate could result in property owners not receiving the money they are entitled to.
The article notes that while the majority of landlords have insurance in place, some premiums do not protect against tenants that are unable to hand over the cash each month.
In many cases, cover will only reimburse lost earnings for periods when a home is uninhabitable due to another insured event such as a fire.
The warning comes after the latest Landlord Panel from the National Landlords Association (NLA) found nearly half of proprietors have experienced rental arrears in the past year.
Commenting on the findings, Chris Norris - head of policy at the NLA - said that while 98 per cent of property owners have insurance in place, they are usually only protected against simple matters such as buildings cover.
He added: "It is essential that landlords purchase the right insurance for their needs and understand the detail of the product before buying."
Earlier this month, the NLA welcomed chancellor George Osborne's decision to uprate the Local Housing Allowance according to market conditions in high cost areas.
During his Autumn Statement, Mr Osborne onfirmed that from 2014, the payments will be capped at one per cent, while 30 per cent of the savings made will be used in areas with lower housing costs.
However, the body expressed concern the changes do not possess valuable information regarding rent levels that would be needed to make necessary assessments.
Richard Lambert, chief executive of the NLA, said: "The Chancellor’s announcement today goes some way to recognising that housing costs differ widely throughout the UK, but it fails to reflect the increasing costs associated with the provision of high quality housing."
- Landlord and Tenancy News from Lawpack: Solicitor-approved Section 8 Notice template with expert guidance on how to evict a tenant for rent arrears
Published on: December 14, 2012
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