Letting to pet owners in light of the tenant fees ban and new 5 week deposit protection rules

by Mark Alexander

10:03 AM, 3rd February 2019
About 7 months ago

Letting to pet owners in light of the tenant fees ban and new 5 week deposit protection rules

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Letting to pet owners in light of the tenant fees ban and new 5 week deposit protection rules

I have been reading several Facebook Group discussions about letting to pet owners in light of the tenants fees ban and new deposit protection rules capping the maximum amount of deposit to five weeks rents.

The general consensus is that landlords no longer wish to service this market, but to me, this = OPPORTUNITY.

When there are even less landlords than there are now who are willing to let to pet owners, then demand will intensify, so why would I ‘follow the herd’?

If I have properties which are appropriate to let to pet owners, then I will go the other way completely and actually advertise them as such. In my experience, pet owners tend to stay in a property for longer. Perhaps because it is difficult for them to find somewhere else to move to?

I appreciate that at face value it’s a bigger risk, but I also plan to advertise NO DEPOSIT REQUIRED.

That should get the phones ringing!

I might even go so far as to offer a five year Deed of Assurance.

At this point you might be thinking ‘this guy has lost the plot’, but I have given this opportunity a fair amount of thought.

Over the last few years I have been testing insurance based alternatives to taking deposits. My letting agents have sourced a policy which costs less than a few hundred pounds but provides significantly more protection than actually taking a deposit, thousands of £ more in fact. Very simply, my risk is mitigated by passing it on to the insurance company.

Naturally, the insurers will not want to take big risks either, so just like they do with Rent Guarantee and Legal Fees Protection Insurance (which I’m also a fan of at just £10 a month), the insurers tenant referencing is very robust. In short, if the insurers are happy to take on the risks then why wouldn’t I let them?

The advantage of thinking outside of the box, and servicing large chunks of the market which are avoided by other landlords, is that I can charge premium rents. Anything I can do to increase demand for my properties also increases the rent I can charge and the ability to be choosy about the people I decide to rent my properties to.

Best of all, I can still deal with all of this from one of the Southern most Countries in Europe (I reside in Malta). The reason is that I have such a good letting agent back in the UK. That agent is LettingSupermarket.com.

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Comments

Andy@Lettingsupermarket

11:07 AM, 4th February 2019
About 7 months ago

My personal suggestion to deal with this would be a zero deposit scheme to also lower the cost for a tenant to move into the property (equivalent to 1 weeks rent and have the Rent Guarantee Insurance also) and then possibly add a pet deposit option should this be required. Providing the property doesn’t have any damage/aromas from the pets then the pet deposit could be returned.

CazT

12:24 PM, 4th February 2019
About 7 months ago

I agree with Mark 100% I have achieved higher rentals in the past from pet owners (they offered, I didn’t ask!) and they’ve been great tenants. It does go wrong occasionally but on the whole, I find people are truly grateful to be allowed to have a home with their pets. I also use Lettingsupermarket and can’t fault them.

ahloughlin@gmail.com

15:46 PM, 4th February 2019
About 7 months ago

Who pays the insurance premium?
Can this be charged to the tenant under the forthcoming change to law on fees?

Janet Carnochan

16:31 PM, 4th February 2019
About 7 months ago

All my tenants have pets, for that reason I tend to fill my houses very quickly. Most pet owners are very considerate and they do stay longer as most nice houses state no pets. I tend to find that a pet is only a problem if the tenant is a problem. On one occasion when I got a house back which was filthy then I can truly say that the cat was the only house trained resident living there.

Andy@Lettingsupermarket

16:35 PM, 4th February 2019
About 7 months ago

Reply to the comment left by at 04/02/2019 - 15:46
As this would be classed as a deposit on the property this would fall under the tenant to pay I believe.

Luke P

13:40 PM, 5th February 2019
About 7 months ago

Reply to the comment left by Andy@Lettingsupermarket at 04/02/2019 - 16:35
A tenant cannot be required to comply with a third party contract/terms...

Dylan Morris

9:01 AM, 6th February 2019
About 7 months ago

I suppose there’s an untapped market in letting to smokers as well ?

Robert Mellors

9:45 AM, 6th February 2019
About 7 months ago

Reply to the comment left by Dylan Morris at 06/02/2019 - 09:01
And other categories of tenants that most landlords would not want to let to..............

FOX30

10:06 AM, 6th February 2019
About 7 months ago

HI MARK, hope your well, I have been thinking about this situation for a while now as we draw closer to the 01/06/19. The RLA tell me that under my terms in my AST's we have a clause where the tenants have to agree to pay for a pro clean and a checkout inventory post tenancy, we pay for the check in usually and this is deducted from their security deposit and the rest refunded to them unless there is more damage which is not deemed W & T. However the RLA have told me that I will not be able to do this post 01/06/19 as these are deemed as fees. This has created a dilemma for me and now I have to reconsider what I need to do. Firstly will all my AST's which have been signed before the 01/06/19 and some date back to 2017 become voided due to the new legislation with regard to these two fees and if so, can I apply the same idea you have suggested above to NO DEPOSIT TAKEN, and run them through the insurance company and pass on the risk to the insurer, does the insurance company block protect on an annual policy for all our properties and if they do including Rent Guarantee and insurance and if so how easy is it to make a claim if the tenants leave the property with repairs to be made even slight repairs which fall out of W&T, I usually deduct for any damage from the security deposits, is there a policy excess etc and how would a pro clean fit into the equation to the insurer, as 9 times out of 10 the tenants never leave the property in the cleaning condition it was first presented in ?
What do you think ?

Michael Barnes

10:13 AM, 7th February 2019
About 7 months ago

Reply to the comment left by JPB at 06/02/2019 - 10:06
For existing tenancies, the rules come in one year later.

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