The buy-to-let market is booming again as investors acquire city centre flats at knock-down prices. But the Association of Registered Letting Agents has reported that over half of its members have seen a rise in tenants struggling to pay their rent.
This highlights the old adage you get what you pay for. Landlords may regret taking out buy-to-let insurance policies at residential rates bandied by firms that had nothing else to offer.
With more landlords at risk of going into arrears on their buy-to-let mortgages it is vital that intermediaries provide the cover landlords need rather than what they feel they can get away with.
Five years ago there were no issues of non-payment of rent so buy-to-let policies at residential rates were considered suitable. But today even providers of those products are starting to directly market the policy holders and look to switch them to bespoke buy-to-let policies that are only available via their branch networks.
So if left alone, advisers again run the risk of their income being eroded. Bespoke buy-to-let products now provide a rent guarantee and loss of rent element. They also include items previously unavailable to landlords such as accidental damage to contents and home emergency cover.
The buy-to-let client bank may hold the key to a quick boost to advisers’ income, especially considering how many buy-to-let mortgages were written over the last five years.