Void period cover 'is a worthwhile purchase'
by Sarah Ashcroft
Landlords should look to protect themselves against any void periods.
This is according to Mark Strong, director at independent research consultancy BDRC Continental, who stated that people have no problem taking out insurance for a number of areas for their lives, such as their cars and mobile phones.
Speaking to Mortgage Solutions, he noted that property owners have to adopt the same attitude when it comes to covering against the threat of void periods and rent arrears
. Landlords will insist that tenancy agreements
are signed before turning over the keys, but this is not the limit of their responsibilities.
Data from the BDRC Landlords Panel found that in the third quarter of 2012, 37 per cent of landlords experienced voids, which represented an increase on the previous three-month period. On top of this, 47 per cent of voids lasted for 40 days or more.
This means a significant number of property owners were not getting any income from their homes during this time period and so Mr Strong thinks there is a gap in the market when it comes to mortgage protection.
However, research by BDRC Continental has discovered only five per cent of landlords hold void period cover, which means that a lot of people are failing to take any measures to protect themselves.
"So what does our data show? It shows a large number of landlords are experiencing financial loss and not protecting themselves against it. Why? That's one for the industry to ponder," Mr Strong remarked.
Moving forward, landlords have to make sure that they are organised if they want to manage tenancies in an effective manner. Carrying out mid-contract checks and ensuring a thorough property inventory
is drawn up are among the measures that can be taken.
And if tenants are struggling to pay their rent, then putting a repayment plan in place may be better than simply ignoring the problem in the hope that it will fix itself.
- Landlord and Tenancy News from Lawpack: Solicitor-approved property inventory template with expert guidance on completing the legal form
Published on: January 30, 2013
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