HOMELET and LETSURE
Managing Director John Boyle says:
"HomeLet is the UK’s largest tenant referencing and insurance provider for
the lettings industry and has recently joined forces with Letsure to become a
formidable force within the lettings market.
"Having recently exhibited at the 2008 ARLA Conference in London together
for the first time, we are thrilled about the new and exciting prospects this
partnership brings to the market and to our customers.
"We believe our customers deserve not only an excellent choice of marketleading
tenant referencing, rent guarantee and insurance solutions, but also
the guidance and support to help them make the most from their relationship
with HomeLet. With a highly skilled team of over 20 Account Managers,
with a real understanding of the lettings market we are now in a position
to offer an even wider range of products to our network of almost 5,500
letting agents across the UK and can help our agents to grow their businesses
providing advice and support along the way.
Improving the agent’s offering
"By taking out insurances and offering tenant referencing, letting agents can
improve the service they offer to their landlords. Many agents get frustrated
by the length of time it takes to process a rent guarantee claim, however,
as HomeLet has an in-house legal and claims department we can process
claims quickly and efficiently.
"Offering insurances and tenant referencing services to landlords is a
fantastic opportunity for agents to generate additional income. Our agents
enjoy attractive commissions against a wide variety of HomeLet and Letsure
products.
Combining referencing and insurance – instantly!
"HomeLet offers combined reference and rent guarantee products that take
the risk out of property rental and can be purchased instantly online. In the last
two years HomeLet and Letsure have paid over £7 million in rent guarantee
claims. This is money many landlords simply can’t afford to lose. It also helps
protect your management income and reduces the hassle and paperwork
associated with the eviction process.
"Tenant referencing is a crucial process which can be time-consuming and
which is often neglected. Yet it is the single most significant factor in protecting
agents and their landlords from tenants who can’t or won’t pay the rent, as
well as helping to ensure the reliability of the tenant.
"HomeLet and Letsure offer a wide range of tenant referencing products;
ensuring that landlords and letting agents receive a fast and efficient service,
reducing void periods between tenancies. In 2007 alone HomeLet and Letsure
completed almost 500,000 references. HomeLet also offers International
Rent Guarantee which ensures that prospective tenants who do not have a
UK-based guarantor can be easily placed in properties."
LET INSURANCE SERVICES
Michael Portman MD says:
"The insurance market is very competitive with new entrants competing with the older more established
players, some of whom have had difficulty adapting to new technologies and to the demanding
levels of service now required.
"Our job is to provide a professional service to professional agents. Our insurance products are
designed with letting agents in mind to enable them to add value to their clients with a comprehensive
and efficient service. With our experience in both the let property and insurance sectors we understand
agents’ needs for good service and quality. (Michael Portman, Managing Director, is a qualified
chartered surveyor and insurance practitioner; Philip Cook is ex-chairman or ARLA and Ashton
Burkinshaw and other key staff have many years of experience – mostly with Letsure).
"FSA regulations governing sale of insurance have been in place for 2 years. When the regulations
came out in January 2005, many letting agents stopped offering their clients insurance because of
the increased red tape. There were tales of confusion and some agents felt that it was a restriction
on the service they could offer, meaning that clients were suffering. The FSA has since simplified the
regulations. This and new technology now make it easier for agents to return to offering added value
to their customers.
"Economic slowdown and reduced turnover in the housing market are increasing the demand for
lettings. Tenants are staying longer in properties; the tenants may be good when the agent takes out
references at the start of the tenancy, but the risk of default through change of circumstances, for
example job loss or break-up, increases over time. It becomes more important to protect against this
risk by taking out rent and legal protection insurance. The credit crunch means that BTL mortgages
are harder to obtain and many fixed term rates are due for renewal, resulting in higher monthly
mortgage payments which landlords can protect through rent and legal protection insurance
supplied by Let Insurance Services.
"Weather patterns are becoming less predictable – storms and flooding in 2007 made it one of the
worst insurance years for property insurers. Only when you have a claim do you realise how good
your insurance is. Agents should recommend that their clients check they are insured for enough and
have assessed what to do in the event of serious damage. We envisage an increasing demand for
landlords and agents wishing to protect their rental income from tenant default.
New products coming to the market
"National Residential (from which Let Insurance Services was developed) has been providing selected
agents with their own-branded rent protection and legal costs schemes for their landlord clients for
over 7 years. These have been very popular with top flight letting agents and their clients. Following
the merger with Let Insurance Services, we will be expanding the product range to include:
● Online tenant assessment backed up by 2 new rent protection policies with legal expenses aimed
at both fully managed and let only properties.
● Landlords Buildings and Contents insurance for all types of landlord from the most cautious/risk
averse landlord letting his own house to the seasoned buy-to-let portfolio landlord.
● Tenants Content Insurance which will include accidental damage by the tenant to the landlord’s
property.
When a landlord asks why he should take out insurances and references
"Economic slowdown and reduced turnover in the housing market are increasing the demand for
lettings. Tenants are staying longer in properties, the tenants may be good when the agent takes out
references at the start of the tenancy, but the risk of default through change of circumstances e.g. job
loss, break-up, increases over time. In these financially uncertain times it becomes more important to
protect against this risk by taking out rent and legal protection insurance.
"A reference on the tenant is no guarantee that they will pay their rent but provides a guide to the
quality of tenant and helps pick up any anomalies in their application.
"And finally our strangest claim – sadly, perhaps, not that unusual...
One of our landlords called to lodge a large claim because his house had been burnt to the ground
because the tenants had overloaded the electrics in their endeavours to cultivate a cannabis factory
in the attic… "
PROPERTY RISKS
Managing Director Miles Ritchie says:
"Currently there is considerable uncertainty in the insurance market due to takeovers, mergers
and consolidation of traditional specialist providers. This is resulting in a confusing clash
of products and service due to the inevitable conflicts that result when multiple businesses
merge. The most concerning issue is the irregular service and conflicting advice that agents
are reporting from some suppliers.
A heightened profile of the residential lettings or “buy to let” insurance market has led
to the realisation that it is an attractive and growing niche market for both insurers and
intermediaries. This is causing an increasing number of “commodity product” providers
and insurers to enter the market. These often lack the specialist knowledge of landlords’
and tenants’ specific needs and the risks they face, which are reflected in inadequate
cover. Their service approach is neither tailored nor personalised. Most fundamentally,
for agents, they seem uninterested in aligning with the agent distribution channel,
instead preferring to target the direct market.
"Now and in the future, historic distribution channels will need to respect and adhere to
increasing regulation. These continuing regulatory issues, particularly surrounding data
protection and safeguarding consumers’ interests, need to be recognised by all parties.
A fresh face in the market
"PropertyRisks were a new entrant a couple of years ago. From the feedback we receive from
letting agents, it is very clear that an alternative provider with a better service provision, aligned
with agent needs, was required.
"We are growing rapidly and fast becoming a major player in the market, positioned between
the traditional providers and the “stack ‘em high, sell ‘em cheap” offerings. We see ourselves
as aligned with the interests of letting agents and the needs of their landlord and tenant
communities. We are able to offer fresh alternatives that focus on service delivery and quality
products, whilst being competitive on price. Primarily, we want PropertyRisks to be recognised
as the leading provider of risk management services and insurance solutions to the residential
lettings market and, critically, as the agents’ partner of choice.
Risk management
"Several tenant referencing products that have recently come to the market have struggled
due to their lack of consistency, service and a reduced product offering. It is important that
agents are aware that tenant referencing is a key risk management tool and not a function
that you should cut corners on. Every tenant and guarantor needs to be fully referenced and
any anomalies investigated, otherwise these providers are risking the agent’s relationships
with their landlords.
"Innovative ways in which to offer protection for landlords against tenant default will provide an
agent with differentiation and a competitive edge in the marketplace, whilst ensuring landlord
loyalty and additional revenue generating opportunities for them.
Why smart landlords reference and insure
Problem tenants can lead to situations where the landlord’s rent is not being paid, there are
lengthy legal disputes and sometimes damage to property. Landlords want tenants who can
afford to pay the rent, actually will pay the rent and will not trash their property! Comprehensive
references increase the likelihood of a successful outcome by getting a better quality tenant.
"A positive reference obviously goes some way to mitigating the risk of problem tenants, but is
still only a point in time analysis. Unfortunately, no one has a crystal ball and circumstances
do change! Insurance is available to cover the landlord in the case of a problem tenant;
not only providing access to specialist legal expertise and removing the financial risks, but
mitigating the potential hassle and providing peace of mind. It can compensate for meeting
continuing mortgage payments and loss of rental income.
"Referencing applicants is an important risk management tool in mitigating risk. This, coupled
with specialist insurance protection, covering the full range of a landlord’s property and
financial risks, is essential."
AUSTIN MYER
Noor Ahmed says:
"Austin Myer International has been
providing Referencing Services for the
past 9 years and we have established
ourselves as one of the preferred partner
for referencing by agents and landlords.
Our company has grown 3 fold in last
5 years and we see ourselves to be one
of the top 3 referencing organisations in
next few years.
"In the past 3 years we have seen
the Buy to Let market grow steadily
and this led to lot of demand for
referencing and also rent guarantee
insurance. We also find that many
landlords are now fully aware of
referencing and rent guarantee
schemes offered by various
companies and they are making full
use of these to find suitable tenants.
"We feel very strongly about referencing
and we try to convey this message to
all our agents and landlords that they
must carry out a thorough check on
each tenant to avoid any unhappy
situation down the line. Referencing
weeds out any unsuitable tenants
and it protects the biggest asset that a
landlord will ever own. So we believe
that it is imperative that referencing
gives a landlord piece of mind,
knowing that they have checked their
tenant thoroughly and that they know
who they are dealing with.
"We can do our utmost to get all the facts
and figures on a tenant through our
long experienced referencing process,
but events may happen that cannot be
predicted. To avoid these, we strongly
recommend the rent guarantee. This
policy provides protection to a landlord
with rental income for the rest of the
tenancy period.
"We believe that we have perfected
our referencing services over the years
and we now have a long term and
exclusive partner – Clarity Solutions,
who will be providing us with the rent
guarantee product and also all other
property related insurance policies
at a very reasonable cost. Clarity
Solutions specialise in household
insurance products, they have a
wealth of experience and knowledge
of this market and are very competitive
in pricing."
