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Landlord protection is a gap in the market

by: Mark Long
  • 29/01/2013
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Landlord protection is a gap in the market
Insurance is something we've largely got covered: car, home, holidays. We even insure our lives... so why not our livelihoods?

Many landlords are at risk of voids and arrears, and loss of income – especially in the current climate – is something I’m sure we’d all want to protect ourselves against if we could.

But data from the BDRC Landlords Panel research demonstrates very low take up of void period and rental arrears insurance cover, and when you look at just how many landlords experience both of those you see a real opportunity for insurance providers to bridge that gap.

Take void periods for example; over a third (37%) of landlords we interviewed experienced voids in Q3 2012, up on the preceding quarter. And with 47% of voids lasting longer than 40 days, many landlords are losing out on a potentially considerable sum.

Landlords in the North East – you’re statistically more likely to experience voids. Landlords in Wales – you’re least likely.

So insuring against this loss makes sense… doesn’t it? You might think so, but our research also shows that only 5% of landlords hold void period cover, meaning that almost a third of landlords are experiencing voids and have no means of protecting themselves against it.

When looking at arrears a similar pattern begins to emerge. Almost half (47%) of landlords experienced arrears in the same quarter, with only 13% covering themselves against it. In Q3 2012, the average amount owed to a landlord by tenants was £2,366. Not an inconsiderable sum.

So what does our data show? It shows a large number of landlords are experiencing financial loss and not protecting themselves against it. Why? That’s one for the industry to ponder.

Mark Long is director at BDRC Continental

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