Private tenants being given the legal right to sub-let could result in insurance costs being hiked for landlords right across the board.
The warning has come from Steve Jones, director of Rentguard Insurance, after a small print clause in the Budget said the Government would legislate to allow tenants to sub-let.
Jones said that for landlord insurance, rates are – among other factors – based on tenant type, with insurers attributing higher risk for student tenants than for example professionals.
Jones said: “It will be difficult for a landlord to disclose the details of their tenants, and answer the risk question accurately, if they no longer have the final say on who occupies their property.
“The real problem would come if underwriters decide to charge the higher rate to everyone to factor in the likelihood of damage cause by tenants sub-letting the property.”
Jones said problems may also arise as tenants are unlikely to professionally reference those they sub-let to and may as a result know very little about them, their lifestyle, background and ability to regularly pay the rent.
Further problems would arise if the original tenant left the property, but the tenant who had sub-let it stayed on.
He added that landlords’ legal requirement to check the immigration status of tenants, in the so-called right to rent regime, could be made particularly difficult if landlords are no longer fully in control over who is in their properties.
Jones said: “It remains to be seen if the Government will re-think this move after the backlash it has faced from the private rented sector, as at the moment it is hard to see who this new ruling benefits – other than tenants looking to rip-off hard-working landlords.”
However, see next story: should tenants have the right to run a small bed and breakfast in their landlords’ properties?
So many things wrong with this change that I find it very unlikely that it could ever go through.
I wonder, if like most of our media, the government have now also been taken in by companies who are trying to tell everyone to sell or rent their property themselves and they now also think this sub letting lark won’t be too difficult to manage or will cause too much of a storm.
We obviously need to address the housing crisis but not like this.
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Totally agree Paul, despite you working for OTM (just kidding) things like this, however well intentioned turn the market place into a wild west show. Another ill thought out attempt at electioneering I fear.
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It’s certainly ill thought out just like the decision to have bourbons instead of chocolate digestive hob nobs at the recent OTM monthly meeting!
But I do think your right that this may also be more to do with the election but just can’t see it going through once the proposals and fall out are established.
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You cant have it both ways. How can the Government make Landlords responsible to monitor immigration status within their properties IF they give the decision to tenants who they may sub let too. Its unworkable but I am sure they will be quick to point out that financial penalties will be severe if there is a breach or will the tenants then become liable for housing an illegal status sub tenant?
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