A new insurance product is to be launched that will guarantee rent from tenants on benefit. It will be available to landlords only from letting agents.
The company behind the launch is Let Alliance, a provider of tenant referencing and rent guarantee insurance products, and claims its new product will shake up the market.
The ‘specialist’ Tenant Support Rent Guarantee product will include a range of social benefits in the rent affordability calculations.
Andy Halstead, chief executive, said: “We work exclusively with letting agents across the United Kingdom and we continually strive to develop our proposition in line with future business requirements and listen to feedback.
“We understand the pressure on margins and difficulty in achieving organic growth, and I am delighted to bring a number of improvements to our product range to the market.”
Let Alliance are also doubling the value of the total claims limit cover from £25,000 to £50,000 without changing the price of the policies.
Halstead said his firm’s products would generate “substantial and recurring incremental annual profit for the business while at the same time giving landlords peace of mind and real value for money”.
He added: “I am very proud of what we have achieved at Let Alliance. Our competitors said our proposition wasn’t sustainable and that we were taking a short-term approach – they were wrong!”
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Comments
You have no need to be ‘concerned’. Yes, we are constantly looking to improve products and processes for letting agents and challenge the status quo. Just because things have been done in a particular way for a period of time does not mean that better ways are just around the corner.
Our underwriting results are excellent, this is why we can offer letting agents a 6 month ‘nil’ excess rent guarantee, inclusive of an ‘Ultimate’ comprehensive reference for just £35.00. This has been the case for almost 3 years now and will continue to be the case.
Let Alliance encourages letting agents to avoid credit checks in isolation and benefit from ‘Ultimate’ references. This way risk is much better managed and the results all round are improved. We charge less for a rent guarantee supported by a comprehensive reference than when supported by an express credit check, and as far as I am aware we are the only provider to do so.
‘@Concerned’ give me a call if you are a letting agent and I will happily give you more detail.
Just for information, Let Alliance also fully references guarantors without a charge being made to letting agent customers when guarantors are required.
Andy,
I think most referencing providers will take into account tax credit, child tax credit etc already- and if an applicant is unemployed, I would rather have a guarantor than not- rent guarantee involved or otherwise.
In fact, most providers actually do the guarantor for free. And will, on the back of this, offer rent guarantee, and with nil excess. Mine currently does, and the 5 or so others I receive weekly emails from do as well.
Sounds like you're trying to reinvent the wheel, but a little bit irresponsibly.
Not really what I look for in an insurer if I'm perfectly honest.
@The Letting Agent; who are they? I am unaware of any other provider that offers a ‘nil’ excess rent guarantee for letting agents where the tenant is in receipt of benefits and all of the benefit income received is taken into account. Specifically Let Alliance does not require a guarantor in these circumstances. I believe this to be a market first but will be happy to concede if you can demonstrate differently.
@ JC, I agree. I know of at least two providers that already offer similar to this product.
@ Andy, do your research and you'll see the companies already offering this. Underwriters are underwriters, if the numbers are there, they will create pretty much any product for a company.
@Anon, agreed - Councils need to stop giving tenants 'advice' like "your landlord can't do anything, sit tight till the bailiffs get there" once that happens to a Landlord, they usually NEVER want to rent to a HB tenant again.
JC, which other provider offers a ‘nil’ excess rent guarantee for letting agents with tenants on benefits without the need for a guarantor, taking into account all benefits when calculating income and affordability?
There are a number of products out there that offer this, so I don't see this as being news? Akin a news item announcing that water can run from taps...
The problem with that A is that if the tenant is found to be claiming the wrong amount of benefits, the council will claim it back from the person who received it, meaning agents / landlords could be held account for large amounts of money.
I think if councils want more tenants in private rented accommodation they need to pay the rent direct to landlords or agents, and cut down their 8-10 week delay in processing claims. It would also help if they didn't just allow tenants to ditch a tenancy at any time with no notice even during the fixed term and move their claim to a new address.
The main reason we can't advise our Landlords to accept Tenants on housing benefits isn't due to non payment of rent. The local councils advise Tenants to stay in a property at the end of the Tenancy even if a Landlord wants their property back to live in themselves, until a Bailiff order has been received which means costs in court and time where they can't move back to their own property! The councils need to start working with Letting agents and Landlords and this way many more agents will start to recommend housing benefit Tenants to Landlords. Until then more Guarantess that the rent will be paid will not make any difference to many Landlords or Agents.