- 19
- Feb
With the increasing popularity of renting property landlords could find themselves coming under financial pressure, an industry expert warns.
According to Steve Johnson, head of insurance at Sainsbury’s Finance, rising number of Britons are looking towards the buy-to-let market. Research carried out by the firm indicated that between November 2006 and the same month last year the value of rental properties increased by a “phenomenal” average of 5.7 billion pounds per month. As of November 2007 the worth of such accommodation stood at 641 billion pounds, up from the 571 billion pounds recorded at the corresponding time in the preceding year.
Findings from the firm also indicated that London has seen the largest increase in the value of properties during the 12 month-period across Britain, going up by an estimated 24.4 million pounds. Wales, meanwhile, witnessed the lowest growth going up by 942.72 million pounds. Overall, it was estimated that there were some 2.76 million homes belonging to landlords.
However, it was suggested that as the value of such homes experience dramatic growth it is possible that a lack of insurance, or an insufficient policy, could see renters and landlords alike come under monetary strain. This may happen should a home and its contents face damage from either weather, criminals or during property improvement work.
In turn, the expense of repairing properties or replacing stolen and damaged goods could impact on consumers’ capacity to meet other demands on their finances. Such areas may include loans, credit and store cards, rent costs and utility bills.
He said: “Underinsurance is a key consideration and that’s the key message from us really. When people take policies and they have a sum insured restricted to that policy, what they have to do every couple of years is assess whether or not that has increased. The other side to that is that if they were to do any building work, or an extension, et cetera, then that isn’t necessarily reflective of the rebuilding costs that they originally took.”
Meanwhile, those looking for an effective way to finance any property renovations, whether they are a tenant or landlord, may wish to consider getting a home improvement loan.
The Sainsbury’s insurance expert went to report that tenants must not only take the time to ensure that cover is in place for when they move into rented accommodation but should also research the various options available and get the right policy for their needs. He also suggested people take the time to check their tenancy agreement.
Whether a landlord or choosing to rent a property, taking out a cheap loan for the purposes of home improvement may prove to be of assistance. Possible uses for this type of loan may include renovating a house, improving security measures or repairing a roof after wind damage. Furthermore the additional financial help a loan provides could help consumers to generate enough disposable income to invest in getting an adequate home insurance policy. Such a home loan may be particular help to many consumers after a recent Abbey Home Insurance study showed that 11 per cent of British homes have been damaged by the weather during the last five years, at an average cost of 2,699 pounds.
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