Jason Mumford

Registered with Property118.com
Friday 21st June 2019

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Jason Mumford

9:29 AM, 20th July 2019
About 2 years ago

Insurance loophole - illegal activities

This is a good story to send to the housing minister to help counter the arguments from shelter and the likes.

It highlights the risks and costs associated with running an overall portfolio

For example

When a bank sets its loan rates on a product, it factors in that a percentage of people will default. And so the bank needs to set its rates to account for these losses to ensure it makes a profit or at least breaks even. Ultimately, this means the rates are higher than they might have been if every customer actually paid what they signed up to in their loan agreement.

The fact is landlords can be hit by massive losses from individual properties. In order for a landlord to break even and ensure they don't default on their loans (Meaning people would lose their homes), they need to charge all tenants enough to ensure the viability of the whole business in the event of shocks. This is good prudent management and ensures the good quality tenants are not adversely impacted by the crooks who don't pay or who cause damage.

Some examples of things that cause good tenants to pay more are

Damage and criminal use
Late payment of universal credit
Tenants not paying rent for prolonged periods
Section 8 proceedings (time and costs)
Additional bureaucracy

Most landlords provide very good quality homes to their customers. It's their duty to ensure these peoples homes are safe. Therefore they need to charge everyone enough to cover the costs of the portfolio, not just an individual property.... Read More