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Friday 11 September 2009

Landlords cancelling buy-to-let insurance to cut costs

The buy to let property market continues to suffer as landlords find their rental income and cash flow are squeezed. But cancelling landlords insurance may not be a sensible move, even if it does appear to save money.

Landlords insuranceResearch from Direct Line for Business shows that landlords are very worried about the impact the recession is having on their buy to let properties.

With 30% worrying about whether they will receive the agreed rental income from tenants and over 20% losing sleep over their cash flow it’s a difficult time.

But cancelling landlords insurance policies to save money may not be a good move.

Worryingly nearly 10% of landlords are though doing exactly that, cancelling their buy to let insurance to save money.

Not only does this leave them in a risky position if something should go wrong, it equally affects their tenants.

Head of Direct Line for Business, Kate Syred, said ‘The Government’s recent recommendation to protect tenants in the event of their rental home being repossessed is a step in the right direction.

However with high numbers of landlords cancelling insurance policies to save money, if something were to go wrong, tenants may still find themselves without a roof over their heads.’

As a landlord, ensuring you have adequate landlords insurance, covering yourself as the landlord, the tenant and the property is crucial.

The bright spot in all this doom and gloom may be that rents are finally starting to rise after a period of falling rents. The Rentindex reports that rents have risen 2.2% over the last 6 months despite being 2% down over the year.

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