Why Every Medway Landlord Should Have Rent Guarantee Insurance

I saw an email recently with some latest research which stated that 39% of tenants said their biggest worry was paying the rent which was interesting to hear about what tenants are most worried about. This led us to think about how we can try and look after our tenants yet at the same time protect our landlords.

A recent Propertymark research states that since February 2023, the number of tenants experiencing rental arrears has doubled, and that growing costs are forcing an increasing number of households into a crisis related to their cost of living. Incomes are being strained to a degree we haven't seen in a long time due to factors like growing food and fuel prices, higher Council Tax, and certain National Insurance contributions.

In fact, according to a recent Which? study, 2.4 million British households are thought to have missed important payments in July of this year. More than 9% of respondents expected their financial situation would worsen over the next 12 months, and 37% of respondents said they would miss their rent or mortgage payment. That may not come as a surprise given that in July 2023, inflation reached 6.8%, much beyond the Bank of England's 2% objective.

Rent costs are reported to have grown by 8.6% as landlords are compelled to raise rent in order to preserve their own income. Landlords are not immune from the pressure on household finances. Especially with mortgage rates shooting up over the last 12 months.  However, if renters are unable to pay the increase, this is not much help. Additionally, because housing expenses take up a higher portion of their monthly income and they have fewer resources to fall back on, renters are often less stable financially. Ultimately, some tenants will probably find it difficult to make their monthly payments.

We examine here the ways in which landlords can safeguard their rental income in the event of a tenant failure.

How can landlords safeguard their rental income?

Rent arrears can have disastrous consequences for all parties concerned. Even tenants who have never experienced a default before may find themselves in an awkward and embarrassing scenario at any time. Many landlords can't afford the shortfall since they depend on their income to pay for their mortgages, living expenses, payroll, and business overheads.  It can also result in additional paperwork and administrative effort needed to retrieve the property, by either the landlord or letting agency.

While landlords will certainly try to be accommodating, if a tenant doesn't make two payments on time, they may have to face the unpleasant task of evicting them. This is where Rent guarantee insurance can be useful in this situation.

Policies cover for legal fees incurred by the landlord throughout the process of evicting a tenant and reclaiming control of the property, as well as lost income in the event that renters fail to pay their rent. This covers the cost of serving eviction notices in addition to expert advice and services from professionals. Landlords who depend on their rental properties for income do not only benefit from this, but letting agents and landlords also save a great deal of time in ensuring that notifications are sent out correctly.

Details of rent guarantee insurance

Rent guarantee insurance may turn out to be a crucial part of safeguarding an investment in property in today's climate.  especially considering that it now costs thousands of pounds for landlords to reclaim their own property.  In contrast, rent guarantee insurance is reasonably priced for peace of mind, with our polices are priced at just £250 which equates to 68p a day.

The rent guarantee insurance we offer covers 24/7 legal advisory assistance. Rent guarantees aren't just for brand-new or renewed agreements; they can also be added to current landlord insurance policies.

Our insurance, in partnership with Alan Boswell, is among the most adaptable available, providing policyholders with comprehensive coverage at affordable costs. Benefits of the policy, which were created with landlords and letting agents in mind, include:

Our cover is independent of the referencing we provide but the tenant will need to be eligible for cover which most of our tenants are.

• A specialised internal claims team for consistent and individualised service
• Up to the point of vacant possession, 15 months' worth of rent payments are reimbursed, and for up to three more months following eviction, 75% of rental income is retained
• No excess
• Accepted mid-tenancy policies - although there is a no claim period which is for the first 3 months and the tenant shouldn't be in any arrears.
• No exclusions for COVID-19.

The polices are available for properties which are fully managed and for landlords who like to manage the property themselves. We have a few landlords who as a result of having to go down the costly route of rent arrears and eviction swear by rent guarantee insurance. The last thing we want you to do is feel like you should have taken this out if the tenant falls into arrears.

As mentioned cover works out to be 68p a day it really does make sense to get extra protection for your property investment. If you would like to get covered please get in touch with us and we will get you covered.