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Storm damage and burst pipes cause the most damage in UK buy to let properties
Storm damage, burst pipes and damage from break-ins were the top reasons that buy to let property investors make insurance claims, new research has found. The most common claim was for storm damage, which cost an average of £1,500 to repair, followed by damage to ceilings, walls and carpets caused by burst pipe with an average £4,500 repair bill. The analysis of data from 100,000 policies by Simple Landlords Insurance also found that the third most common reason for making a claim was property damage caused by burglars with an average claim of £2,300. The most expensive claim in the top 10 is £25,000 to repair the damage caused by an electrical fire and the report also explains how insurance premiums can vary significantly according to property type, location, and tenant type. Andrew Weston from Simple Landlords Insurance said the research is useful for landlords as it helps them to find out the practical measures they can take to avoid the hassle and time of making an insurance claim, all of which will benefit them further by keeping premiums low. ‘Saving money will become even more important for landlords in coming years as tax increases announced by the Chancellor are phased in, which for many investors could make the difference between profit and loss,’ he pointed out. ‘Buying insurance is often one of the last things buy to let investors consider. Having a clear understanding of the key factors that can influence a premium will save landlords money in the long run,’ he added. The report warns landlords about damages that are not covered by insurance policies. The most common reason that a landlord did not have cover was that they hadn’t purchased accidental damage cover in their policy. The report also explains that while you never know where a storm will hit, certain features can make properties particularly vulnerable to harsh weather conditions. Properties with conservatories attached and dormer windows are especially likely to be damaged by high winds and excessive rain during a storm. An example is a property in Edinburgh which needed more than £11,000 worth of repairs, including Perspex roof covering to the buildings’ exterior and solid oak flooring to its interior after two panels from its conservatory roof were ripped off during high winds in January 2015. In Keighley, West Yorkshire, another landlord sustained damage worth just under £5,000 when their conservatory roof was replaced after every single roof pane was punctured by hailstones during a storm in July 2015. A landlord in the West Midlands was contacted by his student tenants following a break in. The burglars smashed through the back door and tried to enter all the bedrooms upstairs. All the doors were locked but the thieves damaged the doors and frames with the damage amounting to almost £5,000. Continue reading
Property market activity soars in England and Wales in March due to stamp duty change
Property sales in England and Wales have seen their strongest March for nine years with transactions up 30%, some 80,000 home sales, the latest index data shows. House price growth also accelerated, up 6.9% year on year and 0.6% month on month, taking the average price to £291,650, the figures from the Your Move house price index also shows. It means that a typical home is now worth £18,745 more than a year ago. When London and the South East are left out of the calculation prices were up 5.1%, suggesting that the market is still strong outside these two growth areas. Indeed, the London market saw the fastest growth of any region as house prices rose 8.2% or £44,548 year on year. Bath and North East Somerset saw the largest March pick-up in property prices, climbing 5.3% or £18,603 month on month According to Adrian Gill, director of Reeds Rains and Your Move estate agents, the impending stamp duty rise for additional properties that was introduced at the start of April helped March record the strongest homes sales for the month since 2007. ‘The surge was widespread across England and Wales. This goes beyond any normal seasonality, with second home and buy to let investors rushing to beat a bigger tax bill,’ he explained. Overall some 73% of local authorities in England and Wales experienced a monthly upswing in home values, the highest proportion of areas seeing positive property price rises since July 2014. ‘This will be welcome news for homeowners, who now have a fantastic opportunity in the current sellers’ market. The pervasive shortage of homes on the market is still driving up values, as buyers have to compete for each available property. If they are going to make it easier to get a foot on the property ladder, the Government will have to double down on its help to first time buyers, or let up on landlords,’ said Gill. He also pointed out that after a bit of a downturn over the winter months, the London property market is growing again with prices up 8.2% higher than a year ago. ‘The lift in London’s house prices seems steep. But we’re actually in a much calmer position than previous years, with the current rise still well below London’s record 20.6% year on year growth, established in July 2014,’ Gill said. He also pointed out that the growth in London property values means it is once again pulling away from the rest of the country, with London and the South East now dragging up national house price growth by 1.8%, double the rate seen at the end of 2015. ‘As a result, we’ve returned to a two speed housing market, as growth in the rest of the country is easily outpaced by London and the South East. But it’s not all about London, as house prices are still advancing in the Northern cities, with the average… Continue reading
Buy to let borrowing surges in UK, probably due to stamp duty change
Home owners in the UK borrowed £8.7 billion for house purchases in February, up 4% month on month and 21% year on year, according to the data from the Council of Mortgage Lenders. They took out 48,000 loans a rise of 4% compared with January and up 12% on February 2015, the data also shows. First time buyers borrowed £3.4 billion, up 3% on January and 21% on February last year, a total of 22,000 loans, some 3% more month on month and 11% more than a year ago. Home movers borrowed £5.3 billion, up 4% on January and up 20% compared to a year ago. This totalled 26,000 loans, up 4% month on month and up 14% on February 2015. Remortgage activity totalled £4.8 billion, down 17% on January but up 37% compared to a year ago. This came to 28,400 loans, down 15% month on month but up 24% compared to a year ago. Landlords borrowed £3.7 billion in February, unchanged month on month but up 61% year on year. This came to 23,700 loans in total, up 1% compared to January and up 47% compared to February 2015. Paul Smee, director general of the CML, pointed out that there has been substantial increases in house purchase and remortgage activity year on year already in 2016 but warned that this reflects the sluggish market in early 2015, perhaps driven by election uncertainties. ‘Buy to let has also seen substantial year on year increases, with particularly strong growth in remortgaging, a pattern which we have seen in the buy to let sector the past six months,’ he said. ‘Activity has been boosted by landlords seeking to complete purchases before tax changes in April. We do not expect activity to show such strong year on year growth later in the year,’ he added. According to Steve Bolton, founder of Platinum Property Partners, it is significant that three in five buy to let loans are now for remortgage, with the number and value of these loans rising significantly year on year. ‘Landlords are clearly taking advantage of the low rates available on the market, especially as they will soon lose the ability to claim their mortgage interest payments as an allowable business expense,’ he said. He suggested that the 7% monthly increase in the number of buy to let purchase loans is perhaps an early indication of some landlords pushing to complete ahead of the changes to Stamp Duty implemented this month. ‘We expect to see an even greater rush of activity reported for March as landlords seek to complete on purchases,’ he explained. He pointed out that buy to let activity could plummet in the future as the cost of running a buy to let business continues to grow due to recent Government legislation. ‘The introduction of Section 24 of the Finance (No. 2) Act 2015 is a real threat as many landlords in the sector could find themselves… Continue reading
