Skip to content

Spike in landlord insurance reflects growing buy-to-let market concern

Landlords and tenants alike are feeling the heat in the UK’s volatile property market. As property prices continue to swell, it’s creating uncertainty within the buy-to-let market – with a surge in renters who have been priced out of the buyers’ market creating demand for rental properties and a boost in landlords.

New data from highlights an increase of 37% in demand for landlord insurance in the first quarter of 2022, compared with the same period last year. Landlords are rushing to ensure they have additional income protection as they are hit by the highest buy-to-let interest rates in seven years, on top of an increase in buy-to-let tax bills, as they can no longer claim the tax back on mortgage repayments.

In this current climate landlords simply cannot afford to chip away at their income with additional bills.  Without insurance, landlords risk losing up to 45% of their revenue through accidental or deliberate property damage.

There will also be many landlords who will need to spend significant revenue to ensure their properties meet the new EPC requirements or risk not being allowed to rent their properties at all in 2025.

Thre’s also tension for tenants, according to recent ONS data, renters are paying almost 3% more this year for rental properties compared to last.

Greg Wilson, Founder of property insurance comparison site comments: “It’s unsurprising that landlords have been keen to protect their incomes over the last few months. Although the buy-to-let market has been blooming, it is about to come under pressure from increases in taxes, interest rates and EPC reforms which will require some landlords to make costly energy efficient updates to their property.

“This will contribute to a squeeze in landlord income, so it’s essential that they take all the necessary precautions such as insurance, to help weather the storm and avoid any additional unexpected costs. Policies that include ‘rent guarantee insurance’ can also cover them if a tenant stops paying their rent.

“That being said, renters must also consider what they can do to reduce costs and avoid any surprise bills as rent and utility bills continue to increase. For example, as a renter, contents insurance policies may protect against accidental damage to belongings, but most policies will require this type of cover to be added as an extra.  So it’s very important to check the policy details.”