www.jml-property-insurance.co.uk
Owners of investment properties could suffer in a number of ways in the Budget on Tuesday. The prospect of higher capital gains tax on second homes and rental properties is one concern and the NLA – National Landlords Association has been running a campaign asking members to write to their local MP objecting to this. Naturally if there is an increase probably a high percentage of landlords will retain their properties as investment landlords should be in the business as a long time prospect and CGT levels of course go down in the future.
VAT levels could increase which means that the costs of repairs, letting and inventory agents fees, the renewal of equipment and putting in a new bathroom or kitchen will be higher as rental income is exempt under VAT regulations in the UK.
Finally there is the knock on effect from job losses as a result of the budget. A major concern for landlords has been rising unemployment and the tenants having problem being able to pay their rent.
Many landlords have been taking out Rent Guarantee Insurance. Rent Guarantee Insurance will protect the landlord in the event that their tenant fails to pay the rent. As a tax deductible premium this will guarantee the property owner receives the rental income they are expecting from the property regardless of the tenants personal circumstances, ability or willingness to pay the rent.
If a tenant falls behind on their rental payments it could have serious financial implications for the landlord especially if they have mortgage commitments or are depending on the income as part of a their retirement pension. Insurance policies will usually guarantee the rental for a fixed period, typically 6 or 12 months. Some policies will provide additional cover once the landlord has obtained vacant possession until they are able to re-let your policy. Naturally anyone considering buying one must check with the individual insurance provider for the precise terms and conditions.
Philip Suter who runs the www.jml-property-
” We advertise several Landlord insurance companies who offer Rent guarantee insurance products - HomeLet, Letsure, Endsleigh, Rentguard and Simple. We have set up a specialist page on the site for landlords as more and more landlords are concerned about their tenants being able to pay.
“If the effect of the budget is going to cause higher unemployment, even in the short term then property owners need to protect themselves. As we have been saying for the past couple of years is insurance is one essential you can’t afford to be without today and rental guarantee insurance is now vitally important.”
More information can be found at http://www.jml-
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