Huge numbers of people are feeling the financial squeeze in 2023, and that includes landlords. Although annual average rents rose by just over 12% in the year to October 2022, that was driven by new lets. When it comes to rent rises for existing tenants, Zoopla puts that figure at 3.8%. Meanwhile, the Consumer Prices Index (inflation) rose by 11.1% over the same period and was still up at 10.5% for the 12 months to December 2022.
That means for landlords that haven’t been able to raise rents in line with inflation, some may feel income versus expenditure is currently tight, especially with costs for maintenance and repairs rising. And with mortgage interest rates on the rise, those landlords who are coming off relatively low fixed rates could see their biggest monthly cost go up this year too.
So, landlords will understandably be looking to protect their rental profits by reducing costs. If that’s you and you haven’t made a claim on your landlord insurance policy over recent years, you may be thinking of reducing your cover to keep your monthly premium down. However, there are two very good reasons to retain your existing cover.
Firstly, the climate is undoubtedly going through a change, and we’ve been seeing more extreme weather over recent years. That means there’s more likelihood of properties being seriously damaged by the elements. The buildings insurance takes care of the fabric of the property, but a comprehensive landlord insurance policy will also cover damage to your contents, including furnishings. A Bode insurance policy will also cover the cost of reasonable alternative accommodation for tenants while repairs are carried out, which can protect you against lost rent (subject to policy terms and conditions).
Secondly, when renting, tenants may not appreciate the importance of reporting damage to the fabric or fittings until it’s become a serious and potentially costly issue to fix. While you may be able to retain deposit funds to help cover the cost of repairs, it’s possible you could be left out of pocket if a lot of work is required, unless you have the right insurance cover.
To discuss a landlord policy that protects you and your property in 2023, just call the team on 01903 890 044, email firstname.lastname@example.org or you can easily get a quote online via our website.
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