Unoccupied property insurance cover

Insurance policies are renowned for having small print to catch out the unwary and one potential trap in most home insurance policies is no cover is offered to a home that is left unoccupied for more than 30 days.

The logic is fairly straightforward since an empty property is more likely to attract burglars and vandals which means there is an increased risk to an insurance company.

However, there are specific policies to cover for leaving a home empty from specialist insurers.

Why do I need unoccupied property-insurance cover?

Many owners have good reasons for leaving a home empty –

  • The owner may have moved into long-term care
  • The owner has died and the home is part of an estate in probate
  • The owners have moved out
  • The owners are going on a long trip overseas
  • The house in under refurbishment

 

Unoccupied insurance can also cover buy to let or holiday homes that are standing empty between tenants.

 

What types of property are covered by unoccupied insurance cover?

Essentially, there are two types of unoccupied insurance cover – one for your home and another for property where you do not live.

You will need check the small print of your home insurance policy to see if cover is given and source an insurance firm willing to take you on if not.

For unoccupied properties that are not your main residence, there are a range of factors which will be taken into account. As mentioned previously, the reason for a property being unoccupied will be vital in determining the risk. The insurer will want to know about the probate situation, whether the home is being sold – whatever the reason you will need specialist advice.

 

 

Preparing your home to be rented out

Letting out a property can be a lucrative business, with rental values outstripping sale returns in many areas. But there’s a fine art to getting the letting game right and there’s often a lot of work that needs to be done before your house is at its best.

Here are the changes and decisions you may need to make before renting out your home – and a few ways to help maximise your returns.

Furnished or unfurnished?

This will depend primarily on the kind of people you expect to be living there. People moving in for short periods of time will generally want a furnished property, so if you’re looking for tenants to stay for six months then it’s probably best keep good-quality furniture on-site. If you’re hoping for longer tenancies, perhaps with professional people or families, furniture is less important.

If you decide to supply furniture it must be compliant with health and safety regulations.

Price competitively and advertise well

If you have a four-bedroom house, is that how you’ll market it? Or will you list it as a three-bedroom house with a study or nursery? This again depends a lot on who you expect will want to move to your area. If it’s a very student-y part of the country, ‘more bedrooms’ is generally better. But if the area is very family friendly then a playroom might be more suitable.

Check the building

Get a surveyor to make sure your building is sound. Large cracks are a giveaway, but subsidence could occur almost unnoticed. You shouldn’t rent out a building that suffers from damp or one that is in a state of serious disrepair.

Finish any work that’s in progress. Unfinished projects look shabby and nobody believes a landlord when they say “it’ll be sorted by the time you move in” – the whole house needs to be sorted well in advance of viewings. Ensure everything works, including all the taps and all the light bulbs.

Smells can be very off-putting. Cigarette smoke leaves an unpleasant, stale odour that can reduce the value of your home as a rental property. Even a lot of smokers won’t tolerate the smell.

Adapt your home

Clean and tidy everywhere. Wash the furniture covers and arrange it into a neutral, welcoming format – just because your kids like to push two armchairs together and make a fort doesn’t mean your new tenants will.

De-personalise your rooms and make it easy for prospective tenants to imagine themselves living there. This is particularly important if you’re living in the house while viewings are taking place – too many photos of you and your kids can be overbearing.

Screen potential tenants

You could check to see whether your prospective tenants have any CCJs against them using this website. It will cost you a few quid to access the records, but that’s a small investment to ensure that they don’t have a track history of non-payment.

Tell your bank and insurance company

Consider whether you need to get insured. Your ordinary home insurance provider won’t normally cover you if you start taking in paying tenants, and you’ll probably want a specialist landlord’s insurance policy anyway. You may also need to notify your mortgage lenders.

Renting out your property can be very rewarding – that’s why there are around 1.9 million private landlords in the UK. But it’s not without its risks, so seek specialist financial or legal help if you’re unsure about anything.

Want to increase your rent? Things to consider

The conditions and circumstances of the rental market change, so even the most big-hearted of landlords will want to increase the rent of their properties over time. You may also need to keep up with interest rates on mortgage payments, cover the costs of landlord’s insurance, or cope with the escalating costs of living or own a property that requires a high level of maintenance. Perhaps maintenance costs have risen and you’ve decided to bite the bullet and raise the rent. There are many reasons, but the question is, what’s the best way to go about it?

 

Before you do anything, ask yourself if you’d rather keep a good tenant and save yourself the hassle and expense of marketing your property, or if you’d rather be able to raise your rent yearly in line with inflation. If you decide on the latter, you’ll need to wait until the end of the fixed-term agreement that your tenant signed. Typically this lasts for six months or a year. You should be careful about signing an agreement that is longer than this, or you may find yourself unable to raise the rent for some time, consequently leaving you out of pocket. When it’s time for the tenant to sign a new contract you can inform them of the rent increase and ask them if they’d like to continue with the tenancy.

 

Remember that your tenant has rights too, and they’re likely to dispute the raise if they feel that it’s excessive, so don’t go overboard. If you can’t come to an agreement between you, the tenant can contct the Recognised Tenant’s Association’s (RTA) Dispute Resolution Service for help.

 

If you still can’t resolve the dispute then you can both apply to the small claims tribunal for a decision. This may end up costing more than the rent increase will bring you, so tread carefully and be willing to compromise. Approach your tenant with tact and respect, especially if they’ve been reliable and trouble free; a good tenant can be hard to find and you don’t want to end up regretting your decision.