A landlord has been left out of pocket after making an insurance claim due to a lack of maintenance to the building in which he owned a flat, according to Total Landlord Insurance.

The landlord’s claim highlighted the growing issue of ‘absent freeholders’ after his flat suffered severe water damage which he discovered was caused by a number of unusual obstructions to the building’s guttering.

Unlike freehold properties, a potential downside to owning flats it that they are usually leasehold properties, so even though a person has bought the property and has a mortgage bill to show for it, it often forms part of the overall freehold property.

In this case the landlord, a freeholder, was unable to contact the freeholder, whose responsibility it is to maintain the guttering which caused the damage, as he had been un-contactable for several years. The landlord was then forced to use his contents insurance to cover the internal damage but had no choice but to pay to repair the external building issues to prevent the problem happening again.

Eddie Hooker of Total Landlord Insurance, said: “Check the lease agreement to see who is responsible for maintenance and insurance of the building. The majority of the time this will be the freeholder but occasionally this can be the leaseholder or a specially formed management company to which leaseholders make contributions to a fund which deals with these expenses. Also, make sure you know who the freeholder/management company of the building are, where they are and their contact details should you need to get in touch with them.”
back to top

4

Home sales increase across UK

The number of homes sold in the UK over the three months to May 2013 has hit the highest level since January 2010 according to RICS.

During the three months period chartered surveyors in the UK sold on average 17.9 properties, whilst this was a low figure compared to the market peak of six years ago, it still represents the highest reading since January 2010. Furthermore, sales are expected to continue their rise over the next three months with a net balance of 35% more respondents predicting transaction levels will grow (from 26%).

Peter Bolton King, RICS Global Residential Director, said: “May was an interesting month for the housing market. More people decided to get out and view property and more transactions went through than in quite some time. Most encouragingly of all, though, is that stability is not confined purely to London and the South East, as has been the case, but is now starting to extend to areas right across the country. There is still a very long way to go until we see a full scale recovery but green shoots are beginning to sprout.”

There has also been an increase in interest from would-be buyers, with rises over four consecutive months and, during May, 30% more chartered surveyors reported rises rather than falls in new buyer enquiries, representing the highest reading since October 2009.
back to top

5

Rent controls could damage the housing market

New rent controls which are being proposed by the London Assembly could cause untold damage to the housing market according to the Residential Landlords’ Association (RLA).

The RLA believe the proposal by the Housing and Regeneration Committee, which called on the Mayor to bring forward an effective mechanism to stabilise rent, would cause the supply of rental properties to dry up as did previous rent controls which applied up until 1989. They also adversely impacted on stock condition resulting in poorly maintained and un-modernised properties.

Alan Ward, Chairman of the RLA, said: “All the evidence clearly shows that rent controls would take us back to the past, drying up the supply of much needed new rented homes. It is little wonder that nationally all three of the main parties have distanced themselves from such a move. Have the lessons of history been forgotten already? When we had rent controls we saw how the sector was damaged and how hard it was to find a property to rent.

“It is disappointing that this report makes no recommendations on how to boost the supply of rented housing, opting instead to support outdated calls for yet more burdensome regulations.”