And it's not only tenants that suffer -- it has a domino effect on the landlord. If tenants fall into arrears it can have a huge impact on smaller landlords who may be renting one or two properties. Rent continuity is vital.
Braintree, Essex (PRWEB) September 24, 2008
British Insurance has launched this week a new Payment Protection Insurance Policy specifically for people who rent properties.
As the number of people renting continues to increase, Managing Director Simon Burgess believes its time consumers have a tailor-made product that meets their monthly rental repayments should accident, sickness or unemployment occur.
According to the Council of Mortgage Lenders, 17,300 first time buyer mortgages were approved in July this year, 15,800 less than the 33,100 approved in July 2007, and during the summer, the Royal Institution of Chartered Surveyors (RICS) reported demand for rented accommodation was at a two year high.
Burgess comments: "Applicants who would have got a foot on the housing ladder in 2007 have been left to look for other options in 2008. In the majority of cases this is renting, so already we have nearly 16,000 more households renting, before taking into account people who decide not to apply for a loan or commit to a long-term mortgage because of the credit crunch."
He continues: "Mortgage Payment Protection Insurance products are commonplace, but they do not provide a financial safety net for the millions of tenants who also risk losing their homes. Those renting face the same financial pressures -- just because they don't have their names on the deeds, their property is still a home and the consequences are equally devastating should something happen to stop them meeting their monthly rental commitments.
"And it's not only tenants that suffer -- it has a domino effect on the landlord. If tenants fall into arrears it can have a huge impact on smaller landlords who may be renting one or two properties. Rent continuity is vital."
Steven Hilton from the National Landlords Association agrees: "The biggest reason for landlords evicting tenants is non-payment of rent. This product not only gives confidence to landlords that a tenant is covered when the unexpected occurs, but also that the cash could be paid direct to the landlord if requested. The reality in this type of economic climate is more and more are getting into problems. Why shouldn't tenants be able to access the same protection products as owner-occupiers? This type of product is well over due."
The Policy covers up to £1500 per month rental payments or 50% gross monthly income and starts at £1.90 per month per £100 of monthly benefit. It offers back to day one payouts and one set premium rate, a choice of cover options and caters for people who voluntarily leave work to become carers for up to one year.
Claimants can take advantage of free back to work assistance with telephone advice, a 'back to work' guide offering practical help and guidance on job seeking, CV preparation and interview techniques, plus access to a daily updated job vacancy database highlighting opportunities that are not necessarily advertised on a wider scale.
Burgess concludes: "No matter what sector you're working in, the threat of redundancy has never been greater - we're hearing news of bankruptcies and job losses daily and pundits predict things will get worse before they get better. Stress levels are rising as are the numbers of those unable to work through sickness. Insurers must become more socially responsible and offer products that help everyone keep their homes during these difficult times."
This is the second 'socially responsible' PPI policy launched by British Insurance since August, the first providing Mortgage PPI for people involved in shared ownership schemes.
Further information on Payment Protection Insurance can be found at http://www.britishinsurance.com.