Maxine Fothergill of Amax Estates, a property management company, who is chairwoman of lettings body Arla Propertymark, said: ‘The pandemic has made it 10 times worse.
Oliver Sherlock of Goodlord, a lettings company that offers rent insurance, said: ‘For many years these products were peripheral to many landlords as they saw the risk as minimal. Previously, average claims took about five months. However, the pandemic and lengthened legal proceedings have resulted in claims lasting up to 17 months.
The potential loss per case, including legal costs, is now over £19,000, Mr Sherlock said. This is a jump of more than 170% since before the pandemic.
The median time from a homeowner’s claim to actual repossession in the last three months of 2021 was 42 weeks – double the pre-pandemic figure, according to government data.
“This significant change clearly puts the ownership of most homeowners’ property at risk if they are not protected. As we feel the effect of the cost of living crisis, tenants’ ability to meet their financial obligations can only erode further,” Mr Sherlock said.
The increase in demand has pushed up rent insurance premiums. Heath Alexander-Bew of insurance brokers Alan Boswell said the cost of rental guarantee policies had more than doubled since 2020. Before the pandemic, typical policies sold for £105 a year, but after the pandemic the cost from a stand-alone policy rose to £225, he said.
Growing demand met a supply bottleneck. Many insurers have pulled their rent insurance from the market following the eviction ban and job shock. Some still haven’t returned to the market, Alexander-Bew said. “There are fewer insurers for homeowners to choose from,” he said.
This can disadvantage low-income tenants. Rent insurance companies often won’t cover properties rented to tenants with benefits or with bad references, Votta said.
Greg Tsuman of Martyn Gerrard estate agents in north London said: “Landlords have had bad experiences in the pandemic and now they are seeing the cost of living squeezed. They try to protect themselves. »
They are also wary of the government’s commitment in the 2019 election manifesto to abolish “no-fault” Article 21 deportations, he added.