Buy to let building insurance

[Siddo]

Im a bit confused about what I need to do.

I have a property on a residential mortgage but now have tenants. I have building insurance but is this now invalid? Obviously concerned if there was major damage etc

Do you know if the insurance companies will change the insurance cover if it's not a buy to let?

Any help would be really appreciated


Thanks

James

 

[Matt1959]

have you got lenders permission to let?

 

[Siddo]

Thanks for the reply

I contacted my lender but they no longer do a consent to let, but a product switch instead. This would mean the interest rate would increase to over 7%. This puts a question on affordability so I'm a bit stuck

 

[Matt1959]

thing is if you dont have lender consent isnt any letting insurance going to be effectively invalid?

 

[tony84]

If the lender doesnt agree to it, then evens landlords insurance is likely to be invalid - your possibly paying needlessly.

There are some companies (so i have heard) that do cover it, although i dont know of any. If i remember on monday ill have a chat with one of the companies we use for landlords insurance and just see whether or not they would cover it.

There are BTL (Buy to let) mortgages available below 7%, infact some of them are a fair bit below 4%. The mortgage needs to be below 80% of the properties value. If you want me to take a look for you - so you know its all done properly feel free to drop me a PM with the Property value and mortgage amount.

 

[Deleted member 61074]

Try to get hold of an IFA who deals with BLT mortgages, there are rates out there 4-5%

 

[help4545]

Once you have sorted out the mortgage side off things WATCH OUT. How do your tenants earn/get there money. If they are on housing benefits a lot of insurance company's will NOT cover you on a buy to let insurance.

 

[vvaannmmaann]

http://www.buytoletadvice.org/buy-to-let-http://www.buytoletadvice.org/buy-to-let-insurance/insurance/

http://www.confused.com/home-insurance/buy-to-let
http://www.comparethemarket.com/home-insurance/landlord/
http://www.simplelandlordsinsurance.com/buy-to-let-insurance.aspx

 

[QuickHomeBuyers]

I would be interested to see if any companies will effectively cover on a let property where CTL has either been refused or not applied for.

Please keep us update as this could be major sales opportunity.

 

[Siddo]

Thanks all for your posts.

I'm on a bit of a sticky wicket as my ltv is 95%, problem
With buying in 2006. So from what people are saying I need to change the mortgage but i won't be able to afford the new payments. Irony being, I could afford double my mortgage monthly payment but 3x is too much.

The lender has no option for a fee to change, so I'm left with the decision to sell.

I am thinking of contacting the Fsa on the basis of tcf, considering I haven't missed a payment in 7 years.

I will still search for an insurance deal but from what people are saying its a long shot. I suppose this is the same for the landlord liability insurance.

All I need is house prices to rise by 15% overnight and I'm laughing


Cheers

 

[tony84]

It would need to be a complaint to the company and then the financial ombudsman if your not happy with the lenders response (the FSA wont help with your complaint).

In all honesty though i think your wasting your time.

TCF isnt a case of saying yes to everyones requests. Its treating everyone the same - that can be a case of giving consent to let to anyone or only allowing everyone under a certain LTV get consent to let. Your agreement was for a residential mortgage, its you that wants to change that agreement, theyre quite within their right to decline your request.

Im not saying i agree or disagree, just giving you the benefit of some of my experience (i was in the team that had to implement TCF in a large multi million pound life office).

 

[Chris Cotterill]

Hi There,

I have double checked with some insurers, to ensure that I am correct. The verdict is the relationship with the mortgage company does not effect the insurance.

I am a broker that insures a number of buy to let properties and can obtain insurance for both Professional Lets or lettings to students or persons receiving benefits.

Let me know if you want some quotes or talk about the cover you need.

Regards

Chris

 

[Vectis]

We're talking about building insurance here?

Why would building insurance be any different if the tenant is a 'professional' person (whatever that might be) or someone receiving benefits?

Having been a landlord for a number of years and had landlord insurance for the building I've yet to be asked the status of a tenant. In theory, if it made a difference, you could be going back to the insurance company every 6 months when the tenants changed.

 

[lockyer]

thing is if you dont have lender consent isnt any letting insurance going to be effectively invalid?

The two aren't connected. If you are letting the property without consent from your mortage co, you still need BTL insurance.

The insurance companies don't ask, check, or care if you have consent

 

[lockyer]

Once you have sorted out the mortgage side off things WATCH OUT. How do your tenants earn/get there money. If they are on housing benefits a lot of insurance company's will NOT cover you on a buy to let insurance.

This is becoming much less of an issue. The time it becomes an issue is if the tennancy agreement is between the council and the landlord, as the landlord effectively loses control over the standard of tennant.

 

[lockyer]

I would be interested to see if any companies will effectively cover on a let property where CTL has either been refused or not applied for.

Please keep us update as this could be major sales opportunity.

Your major sales opportunity has arrived. There never was an issue to start with

 

[Chris Cotterill]

Hi There,

In response to..

"We're talking about building insurance here?

Why would building insurance be any different if the tenant is a 'professional' person (whatever that might be) or someone receiving benefits?"

Does the type of tenant affect the premium?

Insurance companies will often ask what type of tenants will be renting your property (e.g. professionals, students, family, couple). Some insurance companies will not provide quotes for properties rented to students. If the type of tenants change, for example from professionals to students, make sure you inform your insurance company.

More claims arise from student lets and those let to the council, so the insurers rate this accordingly.

Chris

 

[QuickHomeBuyers]

We're talking about building insurance here?

Why would building insurance be any different if the tenant is a 'professional' person (whatever that might be) or someone receiving benefits?

Having been a landlord for a number of years and had landlord insurance for the building I've yet to be asked the status of a tenant. In theory, if it made a difference, you could be going back to the insurance company every 6 months when the tenants changed.

People on benefits are more likely to stay home drunk all day and hence more risk towards elements like fire. It is generally accepted that people on benefits possess more risk hence a premium.