New insurance launched for LHA landlords

Tuesday 10th July 2012

A new insurance policy has launched, aimed at protecting private landlords who let their properties to local council tenants.

Settled Housing Solutions is offering its products to local authorities, who can use them as incentives to encourage landlords to accept tenants on housing benefit.

Alan Elborough, co-director of Settled Housing Solutions, said that as an incentive, it works out far cheaper than those currently used.

He said: “Because local authorities desperately need private landlords to help provide housing, they are offering incentives such as rent in advance.

“And because it is such a highly competitive market, it has led to ‘incentive inflation’. If one local authority is offering two months’ rent in advance, a neighbouring council will offer three.

“It is very costly for local taxpayers.”

He says that research among 61 local authorities across the UK has shown that they could save a collective £3.98m a year using his company’s insurance products – working out at £65,245 per council.

Elborough said: “When we did our inquiry, we asked local authorities a series of questions. These covered how many households they placed in the private rented sector last year, how many they plan to place in such accommodation this year and how much per household they spend on landlord incentives.

“We used these facts to demonstrate how they could cut their costs by using our Settled Sure policies. No one disputed our findings.”

The policy took years to develop, says Elborough, with it proving hard to find an underwriter.

He said: “Many of them simply walked away once they knew what it was about.”

The policy protects landlords against rent arrears, costs of eviction, and malicious damage caused by tenants of private landlords who have been introduced by local councils.

Runnymede Council in Surrey has been the first to take up the new policies, but Elborough said that he has already had considerable interest from others. The policies can, in some cases, also be made available through letting agents.

www.coversure.co.uk/settledsure