21:34 PM, 2nd January 2013, About 9 years ago 5
I suspect very few of our readers expected to see the words Rent Guarantee Insurance and LHA Tenants in the same headline!
Following headlines that only 1.5% of landlords will now let their properties to tenants in receipt of housing benefits is alarming, particularly if you are a landlord whose entire property portfolio is only attractive to this demographic due to location. Fortunately we think we have come across an interesting and incredibly innovative solution for landlords in this predicament.
We have been approached by an online letting agency which appears to have achieved the impossible. They have managed to create sufficiently robust procedures to persuade insurance underwriters to take on the risks of underwriting Rent Guarantee Insurance for LHA tenants. What’s more, they’ve got a few more Aces up their sleeves to attract new business too. They obviously source and manage professional tenants too, however, that’s not exactly headline grabbing stuff is it?
The letting agent advertises on all major property portals and DSSmove.co.uk as well as contacting the local authorities, where there are waiting lists countrywide, for referrals.
Tenants pay an application fee £150 if they claim LHA, or just £77 if they don’t. A provisional check is done free to establish that tenants are likely to full pass checks before any money is paid. Subject to satisfactory referencing, tenants then pay for an insurance policy which costs £200 and covers damage and dilapidations the value of six weeks rent. This is an affordable alternative to the traditional method of paying a deposit. Some LHA tenants may qualify for a bond guarantee from a local authority run approved scheme which are often cost free and underwritten by local councils. With LHA tenants a months rent in advance is not taken either, the consideration for which is that as a condition of the granting of a tenancy the rent must be paid direct to the agent by the local authority. Apparently it is a condition that councils must pay benefits direct if it can be proven this is the only way to help a tenant secure a tenancy.Therefore, the total maximum ingoing cost for an LHA tenant is £350 with insurance, or just £150 subject to the local council bond or similar approved scheme. The letting agent assists the tenant with the LHA claim as part of the full management service which includes guaranteed rent cover which costs the landlord £249 as a one off payment and 8% of rent subject to a minimum of £45 pcm thereafter. Tenant Finding is free of charge to landlords, whether or not full management is taken, subject to the tenant paying the agent for referencing and insurance.
The cherry on the icing on the cake is that the agent also provides emergency repair insurance cover of up to £500 per incident (24/7 365 days a year) as part of the full management package.
To find out more and for an introduction to the business offering this service please complete the form below.
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