Currently viewing the tag: "rent guarantee insurance"

Migrants Expected To Make UK Housing Shortage Worse

A fresh wave of UK immigration is expected when quotas on work permits for migrants from Romania and Bulgaria are dropped under EU freedom-of-movement rules.

Government ministers face an increasing amount of pressure to disclose their official estimate of how many immigrants will pour into Britain next year from Eastern Europe, after remarks were made by Communities and Local Government Secretary Eric Pickles on The BBC’s Sunday Politics Show.

Mr Pickles conceded on TV that a wave of immigrants from Romania and Bulgaria will cause problems in the UK housing supply and admitted that Government officials had already made a forecast of the numbers expected to arrive when border controls are relaxed with the two nations in January 2014 but refused to reveal figures.

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Landlords Need To Be More Realistic With Rents

UK PRS Rent Becoming Unaffordable

UK PRS Rent Becoming Unaffordable

With the unprecedented tenant demand for private rented sector (PRS) property easing due to the approach to the festive period, it appears some landlords have set rental asking prices that are beyond the affordability of many tenants.

A London-based property company are advising landlords to be more  realistic when setting levels of rent and report that tenant affordability and an oversupply of properties are contributing to an ongoing correction in PRS rental prices in the capital.

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Landlords Suffering Financially Due To Unexpected Costs

A recent survey by a national lettings agency has highlighted financial losses incurred by landlords due to failing to plan for unexpected costs.

Landlords Lose Out Due To Unexpected Costs

Landlords Lose Out Due To Unexpected Costs

Landlords pay an average of £1500 (GBP) per year out of their rental income on covering tenant rent arrears, maintenance and repair bills and void periods; a figure that equates to over £2 Billion (GBP) per year nationally, according to the survey by Northwood.

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Tenant Eviction - How Landlords should do it

Tenant Eviction – How Landlords should do it

Landlords Need To Know How To Handle Tenant Rent Arrears

As many UK landlords already know, there are always some issues that can arise during the course of a tenancy. These can vary from essential repairs to rent arrears and with the UK still slowly recovering from a double dip recession, money is tight all around.

With this in mind Legal 4 Landlords offer landlords some sound advice on dealing with tenants in rent arrears before being forced to take legal action for the eviction of the defaulting tenant.

Some tenants are still struggling financially and many are increasingly finding it hard to keep up with their monthly rental payments as well as dealing with the increasing cost of living. Many tenants experience problems due to changes in personal circumstances, such as redundancy or pay cuts, rather than intentionally refusing to pay rent.

Having to pay the mortgage on rental property and not receiving the rent is stressful for all landlords without Rent Guarantee Insurance, but when a tenant is having difficulty paying the rent, there are still a number of options open to landlords before having to resort to eviction.

  • Try to resolve arrears with the tenant to avoid time consuming and often costly court proceedings, especially if they have generally paid in full and on time.
  • Discuss a realistic payment plan with your tenant and encourage them to pay what they can each month to keep down their arrears, confirming everything you agree upon in writing
  • Seek a money order via the Small Claims Court which will order the tenant to pay back the money they owe. This can happen at any time during the tenancy and you do not need to ask your tenant to leave. If the money order isn’t settled within 14 days then your tenant will have a County Court Judgement (CCJ) entered against their name and the order can be enforced via the courts. (Remember that if your tenant is genuinely not in a position to pay then this may be slightly unfair as you will only be worsening their position).

If the tenant still refuses to pay up or insists that they can longer afford the rent, then landlords must follow the legal process for eviction of the tenant in order to recover possession of their rental property.

Serve Notice To Quit

The benefit of an Assured Short-Hold Tenancy (AST) is that the provisions make it much easier to evict a tenant than other tenancy agreements.

Briefly, there are two ways of serving notice to quit when your tenant has fallen into arrears.

1. Section 21 – end of tenancy possession

Section 21 enables a landlord to gain possession at the end of a tenancy without providing reason. There are two types of Section 21 notices: the Section 21(a) notice for possession of a periodic tenancy (that is, when the fixed term of the lease has expired and not been renewed); and the Section 21(b) notice for possession of a fixed term tenancy.

With the Section 21(a) notice for a periodic tenancy, you must provide notice of two months’ or the amount of time between rent payments (e.g. 3 months for quarterly payments), whichever is greater.

If you want to serve notice at any point during the fixed term of the tenancy, you must serve a Section 21(b) notice. As with Section 21(a) you must provide at least two months’ notice, however the earliest date on which the tenant must vacate the property cannot be earlier than the last day of the fixed term of the lease.

Note: you must have secured the tenants deposit in one of the 3 government approved tenancy deposit protection schemes otherwise the Section 21 notice could be invalid.

2. Section 8 – fault based possession

Unlike Section 21, the Section 8 notice can be served at any point during the tenancy. However, it is a lengthier process so it is advisable only to use this route if you have more than 3 months left of the fixed term.

There are 17 grounds on which you can claim fault based possession, 8 of which are mandatory i.e. if the landlord can prove these then the court must give possession. Rent arrears falls under the mandatory ground 8 as well as discretionary grounds 10 and 11, all requiring two weeks’ notice.

If the tenant refuses to vacate and/or hasn’t paid their arrears after the notice period has elapsed, you will need to apply to the court for a possession order and/or a money order.

Legal 4 Landlords can handle all aspects of debt/rent recovery and are the UK’s leading specialists in tenant evictions.

Under a possession order, the court sets a date for the tenant to vacate the property after which they can be forcibly removed by bailiffs.

UK Landlords are warned not attempt to evict tenants themselves or they could face legal action for unlawful eviction and landlords should always use the professional services of an eviction specialist.

With newspaper reports of rising rent arrears and tenant rent defaults, many landlords want to protect against the loss of rent. There are a number of specialist products available for landlords to use including Rent Guarantee Insurance.

Here Legal 4 Landlords, the UK’s leading provider of specialist products and services to landlords and the lettings industry, explain the benefits of rent guarantee insurance, as well as looking at some of the smaller print.

How it works

The Truth About Rent Guarantee Insurance

The Truth About Rent Guarantee Insurance

In theory, rent guarantee insurance can be a landlord’s proverbial best friend: if your tenant fails to pay their rent, the insurer will pay you instead.

The outstanding amount is then recovered by the insurance company from the tenants directly.

Of course, in some instances you may agree with your tenant to accept a delayed payment because of financial problems or other extenuating circumstances, and therefore would not need to make an insurance claim.

On the other hand, landlords may face difficulties of their own some months, and for around £120 a year rent guarantee insurance offers you piece of mind that your rent will be paid on time and in full when you most need it.

Relief for legal costs and void periods

Most good insurance policies will also include legal cover for the eviction of the tenant. Landlords should note that the eviction process can be a lengthy and costly period of time, the legal cover provides landlords relief in terms of time and money.

What’s more, as long as the eviction process started within the policy period, the insurance company will continue to pay your legal costs up to the policy limit even once the policy has ended.

In addition, most policies will pay 50% of the rent for up to 3 months after eviction whilst you find a new tenant. However, if policy ends during the eviction process you will of course have to renew the policy in order to receive this and your monthly rental payment.

The small print

Tenants need to be thoroughly referenced and credit checked in order to be granted the policy. Landlords should have had these checks done before the tenant moved in so there should be no additional costs.

Some insurers won’t allow claims for the first 3 months of the policy, and there may be an excess to pay that is equivalent to one months’ rent and landlords won’t receive anything without renewing if you are in the last month of an active policy.

It also means that there is little point in claiming for rent that is a month late unless you are sure the tenant will continue to not pay and/or you want to evict the tenant.

With only 30 days to claim after the rent became overdue, this can be a difficult judgement to make as your tenant may well intend to pay.

If you do agree to delay payment by more than 30 days, make sure you keep all your correspondence otherwise you won’t be able to backdate the claim if the tenant doesn’t end up paying.

Not only do you then lose another month’s rent on the excess, but it could void your policy altogether in some instances.

Policy renewals are not guaranteed. Unless eviction proceedings begin immediately, any tenant defaulting towards the end of a policy could stop you from being able to renew and so the eviction costs could have to be met by the landlord

The way that some other rent guarantee policies are set up means that the odds are stacked in favour of the insurance company.

Despite this, in a recessionary environment with decreased job stability even tenants with a good credit history may face financial difficulties, so it is very worthwhile for landlords to take action protecting against rent default.

Tenant Demand Boosts Landlord Confidence

Tenant Demand Boosts Landlord Confidence

UK Buy-To-Let Landlord confidence has been boosted by continued strong tenant demand and falling property prices, according to the latest landlord survey conducted by LSL Property Services.

• 48% of UK BTL landlords believe that now is a good time to invest in property
• Less than 1% think it is now a good time to reduce their portfolios.
• 82% of landlords who think now is a good time to buy rental property cited attractive property prices
• 53% of UK landlords mentioned strong tenant demand.

The strength of tenant demand has been the major driving force behind recent UK rent rises, with rents at a record high of £725.00 (GBP) in England & Wales in July 2012.

In the past six months,

• 44% of UK landlords have seen a rise in tenant demand,
• 1% of UK landlords have observed a decrease in demand.

UK property investors are hoping that this growth will continue, with 64% of landlords anticipating a further increase in demand over the next twelve months.

40% of landlords expect to increase rents by an average of 4.5% in the coming 12 months, with just 1% expecting that they will be forced to reduce rents.

Sim Sekhon, spokesman for specialist landlord services provider, Legal 4 Landlords also commented on the latest LSL survey: “The findings show what UK Buy-to-Let landlords and property professionals have suspected for a while, that the UK PRS market is gaining strength and investors are able to get realistically good rental yields. Many landlords are taking advantage of the wealth of products and services designed to help them maximise profit and provide peace of mind for both tenant and landlord. Our Rent Guarantee Insurance and Tenant Referencing services have been sought by thousands of UK landlords over the last 12 months, as landlords look to avoid causing their tenants, or themselves, financial stress”.

David Newnes, director of LSL Property Services, commented: “House prices are still subdued in many parts of the country and tenant demand is still growing. This is presenting landlords with the opportunity to secure strong yields on properties, and boosting confidence in UK Buy-To-Let as a long-term investment. The majority of landlords expect tenant demand will increase in the future, and as long as lending to first-time buyers remains in the doldrums, and new house building remains subdued, we won’t see demand for rental accommodation tail off. In these conditions, while affordability may increasingly come into play as landlords set rents, they are far more likely to continue to rise than tumble in the coming 12 months.”

Read more about the specialist landlord and letting agent services offered by Legal 4 Landlords

Massive rise in tenant eviction orders as landlords are forced to get tough causing outcry from homelessness charity Crisis.

Over the last three years there has been a 70% rise in court orders for the eviction of tenants in the UK Private Rented Sector (PRS).

12% Rise in Tenant Evictions over last 3 years

12% Rise in Tenant Evictions over last 3 years

Homeless charity Crisis set about analysing figures released by the Ministry of Justice that revealed in the last 12 months some 36,211 PRS landlords have been granted a court order for the eviction of tenants, a rise of 12% on the previous year, and 70% higher than the 21,351 court orders for tenant eviction granted in 2009.

The data shows that between 2009 and 2011, almost 10,000 individuals approached their local authority claiming to be homeless due to the end of an Assured Shorthold Tenancy (AST) or because of rent arrears. A rise of 42% on previously released figures.

Duncan Shrubsole, Policy Director at Crisis, said: “Sadly it is no surprise that we are seeing tens of thousands of private tenants facing eviction. They face a dreadful combination of high unemployment and underemployment, draconian cuts to housing benefit and soaring rents. Our concern is that many of these people will have nowhere to turn, and end up falling victim to homelessness. In fact the Government’s own statistics point to this already happening. We are calling on the Government to rethink cuts to housing benefit that will inevitably leave increasing numbers of people unable to pay the rent. We are also in desperate need of more social and affordable housing in order to rein in the soaring rental market.”

Sim Sekhon from the UK’s leading tenant eviction specialists, Legal 4 Landlords commented: “In these austere times UK landlords are being forced to take action with bad tenants or tenants with rent arrears as they simply cannot afford to go without the rent. We have seen a significant rise in tenant evictions in the last 12 months and unfortunately this trend is set to worsen due to the raft of benefit cuts and welfare reforms being pushed through parliament. Landlords are finding their own finances stretched and are having to take legal action for the eviction of non paying tenants before their entire rental businesses go bust. There are ways for landlords to avoid being in this situation but it does require action to be taken before the start of a tenancy, all applicants should be thoroughly tenant referenced and landlords can utilise Rent Guarantee Insurance to keep the monthly rent flowing.”

Legal 4 Landlords the UK No.1 specialist landlord service provider

Legal 4 Landlords the UK No.1 specialist landlord service provider

To find out more about the specialist products and services

offered by Legal 4 Landlords please visit their comprehensive website

Become A Legal 4 Landlords Franchisee and Profit!

Become A Legal 4 Landlords Franchisee and Profit!

The premier landlord service provider, Legal 4 Landlords has grown from strength to strength in just 4 short years, thanks to their unique perspective of the UK Buy-To-Let market, smart business practices and a dedicated team of franchisees and affiliates.

Legal 4 Landlords was founded in 2008 by three partners, Binder Dhillon, Sim Sekhon and Stephen Moss, real life landlords who wanted to provide essential, cost effective services for other landlords facing the challenges of the UK property rental market.

The business trio have since expanded the company’s products, services and network of extremely capable service delivery experts to offer fresh, new innovative ideas in an ever changing market place and are now seen as the UK’s premier specialists in landlord services within the Private Rented Sector (PRS) and Lettings and Property Management Industry.

Legal 4 Landlords franchising really works!
The company’s first franchise registered profits of over £50,000 in their first year!

Legal 4 Landlords are market leaders in the lettings industry, with offices throughout England, Wales and Scotland, offering a range of services that help landlords across the industry whilst maintaining uncompromising principles through an extensive and dedicated franchisee network.

Legal 4 Landlords are the UK’s No.1 specialists within the Lettings and Property Management Industry, whether you’re a landlord, agent or tenant, Legal 4 Landlords unique landlord and tenant products and services cater for all needs.

Legal 4 Landlords core service areas range from Tenant Evictions, Debt & Rent Recovery, Tenant Referencing, Landlord and Tenant Insurance policies and specialist Rent Guarantee insurance products.

Legal 4 Landlords offer a range of services that help not only landlords and letting agents across the industry, but also our affiliates. The Legal 4 Landlords affiliate scheme is a very unique service to letting agents, estate agents, mortgage brokers, solicitors and commercial agents or other known associates within the industry.

Legal 4 Landlords have also broken into the tenant market, with great success.
New services are currently being developed and released over time.
Legal 4 Landlords tenant services have been developed to help provide for and protect tenants, which ultimately assist their landlords and agents too.

Legal 4 Landlords are always striving to deliver a new approach to solving the challenges faced by Landlords and Letting and Property Managing Agents; with this in mind, Legal 4 Landlords launched the Legal 4 Landlords Franchise Network in 2009.

Legal 4 Landlords have 50 franchise areas across the UK, with each area created depending upon the number of agents, landlords and tenant evictions registered.

The Opportunity Of A Lifetime

If you operate a business within the UK Buy-To-Let market or in the letting and property management industry and are able to develop good relationships with landlords and letting agents through marketing, networking and word of mouth. Then a Legal 4 Landlords Franchise is definitely for you!

The franchisee’s role will initially be to build solid working relationships whilst selling Legal 4 Landlords services.

As the franchisor, Legal 4 Landlords are here to help with the pre launch of your business, train you on the products and services, develop new products and services, support you with day to day tasks and market the branding on a national scale.

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Legal 4 Landlords – Head Office
4 Webster Court,
Westbook Crescent,
Warrington,
Cheshire
United Kingdom
WA5 8WD

Tel: 0844 567 4001

UK Has 3rd Highest Housing Costs In Europe

UK Has 3rd Highest Housing Costs In Europe

New data released by the European Union has been highlighted by the housing and homeless charity Shelter, showing that the UK is the third worst off country in Europe when it comes to housing costs behind Denmark and Greece.

The EU says that 16.5% of people in the UK are financially burdened by housing costs, spending more than 40% of their income on rent or mortgage payments and other property related expenses.

Chief Executive of Shelter, Campbell Robb, said: “These figures are the evidence that the UK housing market is deeply dysfunctional. With so many families spending huge amounts of their income on their rent or mortgage, people will be making daily trade-offs between food bills, filling the car tank with petrol, and paying their housing costs. And this is not set to get better any time soon. While the situation is bleak at the moment, a succession of governments failing to provide much-needed affordable homes means that the future facing our children and our children’s children is only set to get worse. Housing is the largest monthly cost for most people, yet the affordability of housing is not getting the same attention as the monthly costs of other essentials such as food or fuel. We believe all political parties must recognise that solving our housing crisis is as fundamental as health and education.”

Landlords of Buy-To-Let properties are urged to set realistic rental prices for their properties but even they have high running costs to pay for as well as the mortgage.

However, Private Rented Sector (PRS) landlords are in a position to help struggling tenants by offering them a safety net when it comes to being able to pay the rent.

Rent Guarantee Insurance offered by Legal 4 Landlords can ensure that the rental income can continue to be paid should the tenants financial or employment circumstances change.

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Private Rental Sector landlords are urged to act now to secure the tenant’s rental payments or prepare for the worst this year as tenant default rates have already increased by 8%, in the second quarter of 2012, and are still rising.

The number of private sector tenancies in severe rent arrears climbed by over 7,000 in the 3 months to June 2012 putting severe pressure on many landlords’ finances as well as adding to the tenants problems.

In the second quarter of this year over 100,400 tenants in England and Wales were in severe arrears, an increase of 24% compared to 2011.

Tenancies in severe arrears represented 2.6% of all tenancies in the UK private rented sector (PRS), up 0.2% on the previous quarter.

Tenant arrears are a serious issue for landlords, and private rental sector landlords need to take steps to ensure rent payments are assured.

Rent Guarantee Insurance protects landlords from defaulting tenants by ensuring that rental payments are made direct to the landlord in full.

If you are a Landlord who lets a buy to let property then there is always the risk of rent default by tenants. Even the best checks and references cannot predict a tenant falling on hard times and not being able to pay their rent, that’s where Rent Guarantee Insurance comes in.

Despite the number of severe rent arrears cases (tenants with rent arrears of more than 8 weeks) continuing to climb, the use of Rent Guarantee insurance products has already started to have an effect on the general level of tenant rent arrears with 8.9% of all rent in the private rented sector late or unpaid by the end of May, a decrease from 9.9% at the end of April 2012.

There Will Never Be A Better Time To Invest In Property

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