This amounts to nearly £28 billion a year across the country as part of a boom in part time landlords, says the research from LV= landlord insurance.
The research found however, that almost 500,000 landlords have not had their property checked by a gas safety engineer in the last 12 months, risking prosecutions and fines of up to £20,000
Also, some 32% of landlords have had their property damaged at some point, which has cost them £1,200 on average to repair.
Landlords in London and the South East collect the highest rents at £1,079 and £816 respectively, followed by the West Midlands at £678 and then East Anglia at £676.
Approximately 60% of this is spent on borrowing costs, management fees and maintenance costs, leaving landlords a healthy pre-tax profit of 40% on average.
The trend is mainly being driven by people moving to a new home and then renting out their old one. Indeed 55% of these landlords are renting out properties that they never intended to, with 15% saying it was because they wanted a bigger property and 10% having to move for
Whatever the reason for letting out a property, all landlords must comply with current regulations on rented homes, LV= points out. By law, all landlords must ensure that gas and electrical equipment is installed and checked annually by a registered engineer. Tenant deposits must be held in a deposit protection scheme and some local authorities insist that landlords in their area obtain a licence.
A managing agent will usually take responsibility to ensure that all legislation is complied with for a fee, as well as check tenants and manage the rent collection. However, 49% of today’s part time landlords manage their rental property themselves and do not have such protection.
As well as risking fines from the local authority, landlords could find themselves heavily out of pocket should one of their tenants make a claim against them. Slips and trips can result in expensive compensation claims for property owners who are liable for any harm to a tenant or member of the public as a result of the condition of the property.
For example, a landlord could be sued by someone who falls and is injured because a pathway has not been maintained. Landlords can also be liable for damage to adjacent properties, such as an overflowing gutter causing water damage to a neighbouring house.
Analysis of LV= data shows that the number of liability claims being made against property owners has been steadily increasing in recent years, which can be attributed in part to Britain’s growing compensation culture.
The insurance needs of a rented property are very different to those of an owner occupied home and standard home buildings insurance will not usually cover homes that are tenanted.
With almost a third of landlords saying their rental property has been damaged at some point and has had to be repaired, 44% said the main cause has been damage by tenants, 17% by flooding and 8% storm damage.
‘Renting out a property can be a great way to cover your costs if you are unable to sell or want to hold on to a home and make some extra money from it, but it is not without risk,’ said John O’Roarke, managing director of LV= landlord insurance.
‘Landlords not only need cover for any damage to their property but they also need to think about their tenants and how they will house them if the property becomes uninhabitable, as well as the lost rental income,’ he explained.
‘If you are thinking of renting out a property you should check the current regulations for letting properties in your area and make sure you have the right cover in place,’ he added.
