Landlord insurance supports a reviving market
One of the apparent new shoots of recovery in the housing market is in the buy to let sector, where the Council of Mortgage Lenders has recently confirmed a revival in the popularity of borrowing to fund just this type of investment. Furthermore, as a growing number of people enter the buy to let market, a number of features of many landlord insurance policies promise to safeguard the investments that are being made.
The buy to let market
In mid-November of 2009, the Council of Mortgage Lenders revealed that there had been a 10% increase in mortgages advanced to buy to let landlords over the previous two quarters. Indeed, buying to let has become such a popular form of business investment that of all the mortgage lending currently outstanding, some 11% of it is to landlords intent on letting their property.
According to the Council of Mortgage Lenders’ statistics, the current low cost of borrowing is not only attracting new landlords into the business, but also helping existing buy to let mortgage borrowers keep abreast of their repayments. For three quarters in a row, for example, the number of borrowers in arrears with their mortgage repayments by more than 1.5% of the outstanding balance has continued to fall and the numbers in such arrears has now fallen to just 1.7% of all outstanding buy to let mortgages.
Landlord insurance
It is probably not only the low cost of borrowing, however, that has enabled landlords to make a success of their businesses and stay on top of their mortgage repayments. The popular appeal of this type of investment seems also to have encouraged landlord insurance to continue to evolve and to offer new ways of supporting buy to let investors.
This is an insurance that not only offers protection for the investment itself, in the familiar guise of buildings and contents insurance, for example, but these days also offers a variety of ways for supporting the business end of income generation – by maintaining the reliability of rental income.
Many modern landlord insurance policies, for example, distinguish not only between the principal groups of tenants most likely to be renting the insured property (professionals, retirees, DSS beneficiaries, students, asylum seekers, and so on), but actively seek to provide financial compensation to the landlord in the event of lost rental income due to the property being uninhabitable due to an insured peril happening (such as fire or water damage).
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