In their outlook for property investment in the UK for 2018, international real estate consultants CBRE forecast a surge in transactions that seems to defy the uncertainties surrounding the current Brexit negotiations. In what CBRE describes as a robust market, total investment of around £60 billion in UK property is expected for the whole of 2018.
Sectors which CBRE single out for particular attention are logistics and industrial properties in urban centres and what it calls the “beds sector” – residential property, accommodation for students, the hospitality industry and healthcare.
The relative weakness of the pound in international currency markets is likely to make investment in property in the UK especially attractive to foreign buyers – who do not necessarily need to be resident in the country to invest in property here.
Whether you are a domestic or foreign buyer, if you are investing in property in the UK, you also need to consider the importance of protecting that investment with the relevant type and level of insurance for property investors.
Whether your investment is in a single building or you have a whole portfolio of investment properties, insurance is probably the single most reliable means of safeguarding that investment.
What does it cover?
Insurance for property investors is a specialist form of landlord insurance – since buildings bought for investment also provide an income stream of rents from leaseholders and tenants.
Although policies differ one from another, cover typically includes:
- this lies at the heart of the cover, protecting the structure and fabric of the building from major risks, such as fire, explosions, flooding, subsidence, storm damage, escape of water, vandalism and theft;
- the building sum insured needs to cover the cost of completely reconstructing it in the event of a major disaster which results in its total loss;
- investing landlords are also likely to have equipped or furnished the property to at least some degree;
- contents which continue to be owned by the landlord are typically insured against loss or damage – with any leaseholders or tenants, of course, responsible for insuring contents which they own;
- a few select insurance providers may also offer the option of cover against malicious damage caused by your tenants;
Landlord’s liability insurance
- investors in property – especially large buildings, such as offices, and those visited by members of the public – are also at risk of claims from tenants, visitors, neighbours and members of the public who sustain an injury or have their property damaged and hold you liable as the property owner and landlord;
- claims of this nature may result in your being ordered to pay a very considerable sum in compensation – especially if physical injuries, or even death, is concerned;
- insurance for property investors, therefore, typically includes at least £1 million public or landlord’s liability indemnity insurance – but, depending on the size and nature of the building, might be increased to as much as £5 million or even more;
Loss of rental income
- depending on the property in which you have invested, your rental income may be considerable;
- that income stream is at risk, however, if a major insured event makes the building temporarily unusable pending repairs and reinstatement;
- insurance for property investors, therefore, typically incorporates provision for compensation for that loss of rental income.
If you have invested in property in the UK, insurance for property investors is likely to be accorded a high priority when it comes to safeguarding your assets.