Redundancies and furlough has perhaps created a trend of small and first-time landlords, according to data from Quotezone
As the Covid crisis heavily impacts interest rates, people are looking for more attractive returns on their investments.
Research by insurance and personal finance comparison experts Quotezone reveals that 85% of those looking for landlord insurance own just one property – suggesting this is a BTL investment rather than their full-time job.
The data, which covers a sample of landlord insurance quotes from 2019 to 2020, suggests redundancies and furlough has perhaps created a trend of small and first-time landlords.
Although the majority of the 19,000 landlords Quotezone sampled have owned their property for five years or more, there is a recent spike, with properties owned for ‘less than one year’ seeing a 22% year-on-year (YOY) increase during the pandemic.
The data also showed that the average age of a landlord in the UK is 51 – people likely at least a decade from retirement and looking to invest in a more long-term asset that may offer higher returns. Buy-to-let is an increasingly viable option for many UK buyers, with only 52% of landlords using cash to purchase during 2020.
Moreover, the average expected rent differs across the UK. Data from Statista revealed that Greater London has the highest average at £1,556, while the cheapest region is the North East where the average rent is just £539. The current UK average is £832.
However, there are costs a landlord needs to consider such as a managing agent, utilities inspection reports and certificates, landlord licence, safety equipment such as fire alarms and extinguishers and routine maintenance to the property.
Landlord insurance is another vital element but landlords can see there are competitively priced policies available by comparing policies on comparison platforms.
Greg Wilson, founder of Quotezone, says Covid has created a ‘temporary shopping spree’ within the housing market with the government’s stamp duty holiday.
However, he adds, I fear this temporary boost in sales may be short-lived as the economic aftermath of the pandemic is yet to be revealed and the stamp duty holiday is due to expire at the end of next month.
Rental properties haven’t gone untouched by the crisis, with many tenants on furlough or facing redundancies and social distancing creating physical barriers to the properties making routine maintenance and repairs difficult, Wilson said.
He said, it is perhaps more important than ever to ensure landlord insurance policies are thorough, accurate and up to date so that landlords are fully protected should a claim be needed.
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