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Why SME landlords are searching for the perfect tenant

At a glance

  • How brokers can help their SME landlords find the best tenants and protect them from the worst
  • Rental market likely to increase substantially in coming years, due to soaring house prices
  • Zurich’s Property Owners policy provides excellent insurance cover and benefits for small property owners

Recent periods of rising house prices, especially in London, mean a whole new generation are likely to face considerable barriers to owning their own homes.

For those people, renting is the next best option and the private rental market faces its own huge growth spurt. According to the Royal Institute of British Architects, one in five households will be renting in 2016.

Landlords, therefore, face an influx of potential tenants coming to market, but if only the perfect tenant could be cloned; a professional couple, for example, with a flawless credit rating, superb references from previous landlords and secure employment.

Julia Veal, Senior SME Product Underwriter at Zurich, believes that a perfect tenant “will treat the property as their own home, be there a long time and have a connection with it”.

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Brokers can’t, sadly, present these individuals in front of their SME landlord clients, but they can give them the very best advice as to how to try to filter out the good from the average or, worse, bad – and also how to protect themselves should things go wrong.

“Background checks are very important,” said Julia. “Many landlords use a letting agent, and it’s the letting agent who will often do those checks for them. This involves credit checking, or references from a previous landlord – sometimes they even interview them about employment and how long they’re likely to stay.

“It’s important the landlord does checks, but that they’re also using a reputable letting agency.”

Statistics from the Ministry of Justice reveal that there were 47,220 landlord-tenant disputes in the UK which resulted in court proceedings for the first quarter of 2014.

Performing background checks, and taking steps to ensure their legitimacy, can help mitigate a number of risks for landlords and avoid future litigation.

Importance of correct cover

And then there’s the question of getting the right insurance. Julia says that hobby landlords are particularly at risk of forcing tenants into a personal lines contract and then not being covered for some of the extras that they might need.

“Telling their insurer what they’re doing is very important as not disclosing the property is tenanted may lead to problems such as the cover being invalidated,” she said. This is where brokers can step in.

Zurich’s new and updated SME Residential Property Owners policy provides insurance cover and benefits for small property owners with a limit of 10 commercial or residential properties, and up to 15 properties for existing customers.


Landlords need to make sure they are covered for malicious damage by tenants, contents liabilities and breakdown, as all of these problems can run into thousands of pounds of legal expenses and costs – something that would be very unwelcome, especially in the current climate.

Image © Getty

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