Court pressures, increased eviction court delays and renters’ reforms; what does it all mean for rental guarantee insurance?
The Ministry of Justice latest data on tenant evictions for the quarter July to September 2024 shows that landlords are now waiting 24.5 weeks for an eviction claim being made to property repossession. This is an increase in time of a week and a half compared to the same three months last year.
Market commentators also point to the fact that court delays are being compounded by a lack of personal protection equipment available to bailiffs. So, even when landlords do obtain possession orders from the court, there are prolonged delays in securing the actual eviction date.
The recent Ministry of Justice data reveals the continuing strain on the court system and its impact on the private rental sector in England.
While the well-voiced concerns of landlord groups will continue to be raised about the court system’s ability to deal with increased volumes of eviction cases and, therefore, the effectiveness of the Renters’ Rights Bill, what do we expect to see from the Rent Guarantee Insurance market in 2025?
Rent Guarantee Insurance covers landlords for the costs of securing possession of their property when a tenant falls into arrears, and, vitally, covers the rent arrears until possession, and sometimes beyond. This insurance has growing importance to landlords in the face of increased uncertainty over the potential for further detrimental impact on possessions times resulting from the Renters’ Rights Bill.
The challenge for Rent Guarantee Insurers, of course, is continuing to be able to deliver this vital protection and at a level that remains affordable to landlords. Rent Guarantee products have certainly become ‘richer’ in terms of coverage following the restrictions that were introduced during the COVID period when tenant evictions were banned, and courts were closed. However, now perhaps a more ‘back to basics’ approach is needed to maintain product affordability. Alternative solutions to secure possession for the landlord outside of the court eviction process also need to be carefully explored.
Traditionally, Rent Guarantee Insurance has been viewed as providing most benefit to so called ‘accidental’ or ‘amateur’ landlords – particularly those dependent on the monthly rental income to cover their mortgage payments. In this period of uncertainty will we now also see the product start to appeal to corporate landlords looking to ‘smooth’ the risks that the changes present to their investors?
As we look forward to how Addept Insurance will grow in 2025 and the opportunities we see to develop solutions that add value and address gaps in current products and services, one thing is certain, the demand for Rent Guarantee Insurance will only grow, but delivering a product at an affordable, and sustainable level, and the innovation needed to deliver that, will be key.
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