• One in five landlords felt unprepared when they first started letting properties due to knowledge gaps
• The most common area landlords felt their knowledge was lacking was drawing up tenancy agreements 
• A quarter of landlords say they’re not concerned about legal expertise or filling knowledge gaps – suggesting some may not be taking risks seriously

 

One in five individual and multi-property landlords felt unprepared when they first started letting properties, according to new research by Direct Line - Business.

Out of those who didn’t feel ready, the most common areas they felt they were lacking in knowledge were drawing up tenancy agreements (59 per cent), eviction rights (51 per cent), public liability (49 per cent) and tenant security deposits (49 per cent).

These knowledge gaps have persisted for many. Eviction rights (27 per cent) and dealing with property damage (23 per cent) are the top ongoing concerns for landlords, followed closely by changes to welfare regulation (18 per cent).

Worryingly, nearly 1 in 4 landlords (23 per cent) claim that they are not concerned about filling these knowledge gaps or seeking legal expertise, suggesting that they aren’t taking the potential risks seriously enough.

Not all landlords are so nonchalant. The lack of knowledge is a real issue for some, with 1 in 3 landlords having personal concerns about legal compliance and regulation. Encouragingly, some are taking steps to improve their knowledge by:

• Searching for advice online (38 per cent)
• Contacting their insurance company (26 per cent)
• Contacting a property expert or consultant (25 per cent)
• Seeking out legal advice (25 per cent)

 

However, a significant chunk of landlords (15 per cent) haven’t taken any steps to improve their knowledge. The reasons for this are:

• They don’t know where to go for information
• They have other priorities
• They don’t think they need that knowledge

 

Efforts to close knowledge gaps are having an effect. 7 in 10 landlords (68 per cent) agree that they have improved their understanding of tenant security deposits since becoming a landlord, with nearly two thirds (65 per cent) improving their knowledge of drawing up tenancy agreements.

Most landlords also believe they’ve enhanced their understanding of dealing with property damage (62 per cent), getting good rental yields (61 per cent) and eviction rights (55 per cent).

Jamie Chaplin, Landlord Business Manager at Direct Line - Business, commented:

“It’s troubling that so many landlords do not feel they’re prepared before renting out a property, and even more worrying that many aren’t concerned about improving their level of knowledge of legal and compliance issues.

“But there are signs for optimism. Many landlords are taking steps to improve their knowledge and are learning through experience, evidenced by most saying that they’ve improved their understanding of key issues such as tenant security deposits, tenancy agreements, property damage and getting good rental yields.

“However, something they do need to consider is the importance of protection – which can minimise some of the risks associated with a lack of legal expertise and knowledge.

“At Direct Line - Business we offer Landlord Insurance that covers the risks you face when letting a property. This is designed to keep your investments safe and will help you get your property back up and running should something go wrong. When it comes to giving landlords peace of mind and quality protection, we’re on it”.

To give landlords an additional helping hand, Direct Line also provide landlord customers with a free 24/7 legal advice helpline. Whether they’re facing a serious legal issue, or just want to check something with a solicitor, they can consult a team of legal experts whenever they need to.

Direct Line also offers a free legal documents service and business guide service in partnership with DAS Businesslaw, offering landlords access at no extra cost to a library of legal templates, tools and guides, to help them run their business and stay compliant with the latest regulatory changes. They can use the service to create ready-to-sign contracts, agreements, policies and letters. All documents are developed and regularly updated by legal experts and are customisable via a smart document builder.

For further information on Direct Line - Business’ Landlord insurance please visit our webpage here:

https://www.directlineforbusiness.co.uk/landlord-insurance

ENDS

Notes to Editors

1.     BVA BDRC online survey of 250 of those who self-identify as landlords with 88% of respondents owning 1-4 properties. Survey conducted between 4^th-10^th September 2020

For further information please contact:

Direct Line Group
Unni Henry
Senior PR Consultant
Tel: 01903 636 149
Email: [email protected]

Eulogy
Michael Hindmarsh
Account Director
Mobile: 07415 396642
Email: [email protected]

About Direct Line – Business

Launched in 2007 Direct Line - Business now has over half a million customer policies, providing a flexible range of insurance products for the landlord, van and small business sectors.

Direct Line insurance policies are underwritten by U K Insurance Limited, Registered office: The Wharf, Neville Street, Leeds LS1 4AZ. Registered in England and Wales No 1179980. U K Insurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Direct Line - Business and U K Insurance limited are both part of Direct Line Insurance Group plc.

Customers can find out more about Direct Line’s business products or get a quote by calling 0345 301 4827 or visiting www.directlineforbusiness.co.uk