Almost one in five landlords do not have specialist insurance, instead relying on standard home insurance policies in the mistaken hope that they cover rental properties.
According to new research from Direct Line for Business, on average landlords incur annual costs of £8,256 from their rental portfolios. The research found that the average respondent’s portfolio comprised 5.3 properties and drew an annual income of £94,344.
Repairs were the largest reported cost, with materials and labour costs averaging £2,848. Landlord insurance was the second highest cost, accounting for £1,329 or 1.4% of the gross annual rental income.
Despite this, 18% of those interviewed did not have landlord insurance.
Jazz Gakhal, head of Direct Line for Business, said: “It’s vital that landlords get the right cover for their properties.
“You are unlikely to be covered in a standard home insurance policy, and there are many valuable extras available, including rental income protection if your property is uninhabitable due to an insured event such as a fire or a flood.
“A good landlord’s policy will also include public liability insurance, also known as property owner’s liability insurance, as standard, as you could be held liable for injuries on your property or damage to neighbouring property.”
Of the other costs incurred by landlords, letting agent and property management fees accounted for slightly more than one fifth of costs, with letting agents collecting 8.9% of the total and property management firms taking 12.6%.
Nearly 240 landlords were interviewed about their costs last month.
Article courtesy of Landlord Today