Demand for rental insurance products increased by 41% between September and December last year, according to data from lettings platform Goodlord, as landlords and agents prepare for changes under the Renters’ Rights Act.
The increase in demand coincided with the Renters’ Rights Bill receiving Royal Assent on 27 October, with the Act scheduled to take effect in May.
Survey findings
A survey of 234 letting agents and landlords conducted by Goodlord found that 76% of respondents said the Act had increased their likelihood of taking out insurance. Only 11% reported their position was unchanged, whilst 1% said they were less likely to obtain insurance as a result of the legislation.
Oli Sherlock, Managing Director of Insurance at Goodlord, stated: “The passing of the Bill into law really focused minds across the sector. There had been so many false starts over the years, it took Royal Assent for lots of agents to truly step up their preparations.”
He added: “We saw an absolute explosion in rent protection demand as soon as the Bill cleared the final stages; it was like a massive alarm had sounded across the market.”
Industry concerns
According to Goodlord, industry professionals have expressed concerns about potential court delays around evictions, extended rental disputes with tenants, and last-minute tenancy cancellations under the new regulatory framework.
Sherlock noted: “Lots of the major causes of concern – whether that’s around court backlogs, gazundering, or disappearing tenants – may not come to pass in the volumes some predict, but agents and their landlords clearly don’t want to take any chances at a time of such market uncertainty.”
The data suggests landlords and agents are taking proactive measures to mitigate potential financial risks associated with the legislative changes, which will alter the balance of rights and responsibilities in the rental sector.
