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Landlord's Insurance - some tips!

Fri, 20 Apr 2012 08:33:49 +0100

Exploring specific 'Landlords Policies' cannot be recommended highly enough ! Make sure that your insurance broker quotes for a combined Building and Contents policy covering all the items that you own in the property and fixtures & fittings. Even when premises are rented out 'unfurnished', contents cover is worth exploring - read the fine print - as it will usually cover the Landlord for any injury or damage caused by parts of the property. If for example a Tenant or their visitor suffers injury from a door slamming shut in high wind it may be that this is not covered under Building Insurance which is intended more to put right damage that occurs to the fabric of the building ( i.e. being struck by lightening, flood, fire etc ). Contents insurance will give you enhanced cover and is often rolled into a specific 'Landlords Insurance Policy'.

Make sure that your insurers cover you specifically for Letting and again read the small print about void periods. Insurers quite understandably get twitchy about unoccupied premises where there is a higher risk of leaks occurring unnoticed, unwelcome guests breaking in, vandalism etc . We often are required to make weekly inspections and report back to the Landlord so that they have proof that the property is being given a 'once-over' on a regular basis. Most insurers will set a limit on the time that they are willing to cover a property when it becomes empty - so check this out otherwise you could be left completely uninsured after a couple of weeks into a void period.

Finally, consider including within your Policy cover for loss of rent. Nobody can guarantee that a tenant will continue to be able to afford rent and sometimes thought no fault of their own Tenants find themselves without a job, or separating from their partner or any multitude of other reasons making them unable to make ends meet at the end of the month. There are plenty of excellent insurance brokers regulated by the FSA who will readily give specific advice on a comprehensive Landlords insurance package - worth every penny when the 'proverbial' hits the fan !

The missing 13th month!

Sat, 14 Jan 2012 22:04:53 +0100

Here's proof that there is a missing 13th month! If you ask any person in the street how many weeks there are in a month they will of course say 'four' ( they will also probably wonder why you are asking such a daft question and won't immediately understand why this question is so important to both Landlords or Tenants ). Using this nugget of wisdom, by logic, it follows that the total number of weeks in a year will be 4 weeks x 12 months i.e. 48 weeks in the year - CLEARLY THE WRONG ANSWER as there are of course 4 more weeks unaccounted for - the missing 13th month !

When it comes to Housing Allowance, which is assessed on a weekly basis and usually paid every 28 days in arrears, the fact that there are 52 weeks (ie. 13 four week periods) in the year is a very important factor. In these hard economic times even the most upstanding 'model tenant' can find themselves one minute affluent, in work, paying their rent monthly and 'in advance'..... but then the next find themselves without a job , seeking allowances and paying rent one month 'in arrears'.

It doesn't take long to compute that there is a problem for both Landlord and Tenant if the original rent is still to be paid on a monthly basis and no adjustment is made for the change of circumstances. Heres an illustration of the issue:

2 calendar months, December and January both have 31 days (ie. a total of 62 days - just 1 day short of 9 weeks)
2 notional months of Housing Allowance have 2 x 28 days (i.e a total of 56 days 8 weeks )

In simple terms at the end of January, through no fault of their own, the Tenant has potentially found themselves in arrears and will have received 8 weeks Housing Allowance but will be owing the equivalent of 9 weeks rent . Being 1 week short in rent means that potentially the Landlord will have to wait for another 3 weeks until the next Housing Allowance cheque arrives, or the Tenant (often with no resources of their own - thats why they qualify for Allowances!) will have to stump-up and 'bank roll' the difference.

A simple addendum to the terms can soon bring matters back under control and in the interim, good accounting is essential such that the Tenant knows where they are and the Landlord is aware of the changes - especially the 'dry spell' where a regular monthly rental payment 'monthly in advance' , changes to 'four weekly in arrears' from Housing Allowance. Most Landlords would prefer for Housing Allowance to be received rather than have an empty property and be receiving nothing.

Tenant's guide to keeping warm in winter

Sat, 14 Jan 2012 22:05:38 +0100

1    If you have a gas fired boiler , remember to check that you know how to re-ignite a pilot light . Rural rented homes in the Peak District can often be exposed to extreme weather, and on days when there are high winds its not uncommon for the pilot light on gas appliances to blow out causing the heating to then not come on. Re-ignition usually takes seconds and is similar to lighting a burner on a gas stove (electronic ignition at the press of a button ). If the problem won't go away then make contact - it could be that there is a problem that needs investigating. If its only a pilot light, you could have to pay the call-out fee for the Landlords Gas Safe Engineer to do a 30 second job!

2    If you have electric Storage heaters then you will need to make sure that you know how to use them in cold weather. The clue is in the name - these types of heaters store heat and you need to get into the habit of predicting how much you heat you need to input overnight as this is what you will have available during the day. Here is a link to find out more about how to optimise your Storage Heating

3    Although you should have Landlord fitted insulation in your roofspace, if your upstairs rooms are particularly cold you might consider putting in additional insulation - there is no harm in adding more. Make sure that you don't block up ventilation slots at the eaves or mounted on the roof pitches as this will control the built up of any condensation.   There are often 'winter specials' that make it very affordable to fit additional insulation and make sure that you wear protective clothing and a face mask if you install yourself.

4    In thick walled houses and cottages in winter , it is better to keep the heating on a 'low' setting at all times when you are not in the property rather than expect the walls to heat up instantly when you arrive back from work. The walls will store heat and it is a good way to stay warm and combat the potential for condensation to form with an abrupt change in heating patterns. If you just turn the heat on to maximum when you are at home you will more than likely just be heating the air and your rented home will not feel warm especially when you are close to external walls.

5    Avoid as far as possible drying out clothes inside or on radiators. Damp in the air makes properties feel much colder and you run the risk of condensation forming .

6    Finally , if there is a well ventilated cellar , seal up any gaps around skirtings and floor to stop cold air coming into the property.

Stay warm this winter !

Landlord's Energy Saving Allowance

Mon, 02 Jan 2012 09:42:05 +0100

NOW IS A GOOD TIME TO ACT !! There are some really good incentives for Landlords to insulate and make energy efficient improvements to their rented properties . Apart from the obvious of reducing carbon emissions, Tenants being a lot more comfortable, happy and having lower fuel bills , for Landlords there is also the attraction of getting their money back 'in kind' with a reduction in their income tax bill.

EXAMPLE :- If a landlord spends £1200 in hard cash having loft insulation installed he can have this amount knocked off his tax bill. Indeed there is an annual limit that can be reclaimed of up to £1500 for each and every property that improvements have been made on. So if, since 2004 you have insulated lofts, injected cavity walls, done draft proofing, or other thermal performance improvements you should be thinking of claiming this allowance !

The Landlord's Energy Saving Allowance ( LESA) was introduced by Her Majesty's Revenue and Customs as a tax allowance for Landlord's who have upgraded their rental property. Everybody wins. If you pay tax on the profit that you make on rentals then you can apply for this LESA allowance when you fill in your tax return form. Its worth £1,500 in tax savings each year for every property that you upgrade i.e. if for example you spend £1,500 each on three properties in one year then you can potentially take full advantage of your LESA tax allowance 3 x £1,500 i.e. reducing your tax bill by £4,500 . You can't claim however if you just rent a room out or if you let your property as a Holiday Let. NB the LESA is not a cash payment back to you - it is a Tax allowance and you can only claim for what you have actually spent.

So, why not enhance your property instead of paying the equivalent amount in TAX !

Since 2004 the Government has been a new type of improvement that has qualified and you will need to check when you did the work that you are claiming to make sure it qualifies:

From April 2004 onwards loft and cavity insulation was included
From April 2005 the allowance extended to solid wall insulation.
From April 2006 insulating hot water tanks and draft proofing became included
From April 2007 underfloor insulation got added to the allowance

LESA cannot be claimed for any other energy efficiency measures other than those listed above unless they fall under the category of repairs - works such as installing double glazing or secondary glazing and fitting an up to date boiler might constitute LESA repair works and you should contact your local tax office to get clarification on such matters.

The scheme has been running since April 2004 and there are only 3 more years left to run to claim LESA which comes to an end on the 1st of April 2015. In addition to the LESA you could also be eligible for a grant - many Council's and energy providers operate schemes to improve the quality of housing and energy efficiency .

There is a list of current grants available at the Energy Saving Trust and if you need any technical information about insulation and making improvements there is an excellent source of downloadable information at the Centre for Sustainable Energy .....there has never been a better time to get the improvements done! Ask your accountant or Local Tax office for more detailed advice and information.

Great tips to get ready for winter in the Peak District!

Sat, 14 Jan 2012 22:49:04 +0100

Living in the Peak District means that on average we are several hundred feet higher than surrounding areas and we have our own little microclimate with localised changes in temperature and weather. Doing the journey from Chesterfield to Tideswell regularly you can see pretty much a year round 3 degree drop in temperature door to door.

As letting agents our advice is simple - get organised before the bad weather sets in! Here are some top tips that apply equally to landlords as they do to Tenants:-

Heating

Make sure that your annual gas safety check has been done and that all appliances have been serviced. It is not uncommon for Landlords to have appliances 'gas-checked' operationally in say the spring as a legal requirement just before a tenant moves in. This is not however a 'servicing' of the equipment where jets are cleaned, tests performed, flues swept etc. Its almost guaranteed that on the outset of winter there is always a clutch of Tenants who are on the phone to us needing some prompt action with the boiler not working. So, top tip - boilers and gas fires that may have been 'passed' on the annual safety check may just not work several months later when it comes to winter - make sure that you get your appliances serviced regularly and before the winter sets in when Gas Engineers are pulled out dealing with 'emergency call outs'.

Condensation

Damp can be more prevalent in the wet winter months and difficult to completely eradicate in old stone Derbyshire buildings. Especially difficult in exposed locations and on properties with complicated roof structures that typify Bakewell and many of the Peak District town and village centres. Check that all gutters are free - if they are blocked , water will often find its way into the fabric of the building and you will get mold and condensation forming on the windows . Stone cottages were not built with modern day damp proof courses and its better to set your central heating to run constantly on low rather than to run at peak times only when you are there. Condensation forms where there are abrupt changes in temperature so keeping the fabric of the building at a constant temperature really helps. Make sure that you have working extractor fans in bathrooms and kitchens that pump out any moisture to the outside and avoid hanging up wet clothes to dry in unvented rooms. Most extractors have an over-ride switch which means that they should continue working after the extractor has been switched off for a set period of time - usually 20 minutes. If you don't get rid of damp humid steam from showers, boiling pasta in the kitchen, drying your laundry on the radiators, you will have more than likely suffer with condensation. Make sure trickle vents are open on windows ( where fitted ) and think about a dehumidifier.

Salt

When its snowy and icy one of the most common places to have a slip and a fall is on the doorstep going from the nice warm grippy interior to the slippery ice rink outside . Everyone knows that winter is coming but few bother to do anything about it until it has literally arrived on their doorstep - so why not get down to your local builders merchants or shop and get stocked up with a bag of salt and a shovel ? Snow in the Peak Park during winter is a fact of life - be prepared !

Emergency supplies

Occasionally after really bad weather we get power lines down, villages may even get cut off, or we have people who have not been able to make it back to their own homes and end up staying a while. Stock up on some ready consumables. Get a torch ( with working batteries!) next to your electricity main switch / consumer unit - you do know where that is don't you? If not, find out before you have power cut. Buy a couple of candles and some matches and know where they are so that if you are plunged into darkness you have a solution. We have bad weather power cuts every year - so theres one due this winter for sure!

Check on your neighbours

Particularly the elderly and vulnerable - check that they are ok and in well. Living in a village is a true community and people look out for each other more.

Frozen Condensate Pipe

When temperatures get seriously below freezing the small pipe from condensing boilers ( i.e. nearly all modern boilers nowadays) can freeze up. This is usually a small diameter pipe that takes combustion vapour to the outside which in turn freezes and blocks the pipe. When this happens the boiler shuts down by design until the pipe thaws out. Have a registered Gas Safe Engineer check out the boiler in advance and have a larger lagged condensate pipe fitted. The following link is to the Gas Safe Register where you can find a suitably qualified engineer.

Empty Properties

If you are going to vacate a property or be away for the festive season - make sure that there is background heat on at all times so as to avoid the potential for burst pipes. Most boilers have a frost thermostat fitted so that there is always background heat - consider having one fitted if there isn't one already - its much cheaper than facing moving out and expensive repairs from water damage. Always use a qualified plumber.

Open Fires

There is nothing like an open fire in the winter! Make sure that you have a fire guard and a hearth fitted. Make sure that your chimney has been swept and tested to ensure that it is clear of any birds nests built over the spring and summer, or other problems that may have arisen since the last time you lit the fire. If item chimney hasn't been swept in a while, it could be sooted up ( and in risk of a chimney fire ). Make sure that it is smoke tested to ensure that there is a good draw and all combustion gasses go up the flue with a strong pull. Again get all gas fire appliances serviced by a Gas Safe Registered engineer ( used to be CORGi).

....above all stay warm and stay safe !