Industry News


The above inflation cost increases hitting social landlords revealed


T


he National Housing Federation has revealed the scale of the above inflation cost increases hitting vital areas of their


operations. A report commissioned from the Centre for


Economics and Business Research (CEBR) analysed inflation data in relation to the major costs facing social landlords. It found:


• annual construction price growth accelerating to 9.6% in June 2022.


• building new homes has suffered annual price growth at 12.3% more expensive than a year earlier.


• repair and maintenance prices have surged with annual price increases for repair and maintenance materials hitting 14% in July, down from a peak of 16.8% in April 2022.


• over the first half of 2022, employees’ earnings increased by 6% on average over the past year.


Kate Henderson, the NHF’s chief executive


said: “Tis report demonstrates the huge financial pressures housing associations are currently facing, with the cost of repairs materials and building new


homes already rising well above inflation by 14% and 12.3% respectively. “Tis is likely to worsen over the coming months,


feeding through to all areas of spend and is on top of the pressures of building safety costs and the costs of retrofitting homes. We know there will be particular challenges for supported housing


providers who operate on very tight margins.” She stated that landlords must continue to be able


to maintain their homes and provide vital services to residents in the years ahead. Ms Henderson added: “Tey are also concerned about the impact rising living costs are having on social housing residents.


Water leaks are the most common cause of insurance claims by landlords


Market analysis from Total Landlord Insurance has revealed the most common reason for landlords to submit an insurance claim is damage caused by water escaping, but that fires and storms result in the biggest insurance payouts overall. Escaped water was the most common reason for


a claim, with internal flooding - from burst pipes to leaking toilet cisterns - accounting for 35.5 per cent of all claims. Tis was followed by storms at 22.4 per cent, accidental damage at 13.1 per cent and then


malicious damage at seven per cent. Te average landlord insurance claim results in


a payout of £6,512. But when it comes to fire, this increases to a scorching £31,621. Storm damage resulted in an average claim of £11,568, with subsidence also one of the most costly reasons to claim, with an average claim of £7,954. Resolving water leaks from pipework or fittings


cost £2,843 on average, whereas dealing with water ingress due to events like prolonged spells of rain cost £721 on average.


Melissa Choules, Lead Claims Technician at Total


Landlord Insurance, commented: “When it comes to insurance claims, the reasons for claiming are oſten either common or costly. Te most common generally revolve around damage caused to the property, such as water damage. “A claim can oſten be avoided if a landlord takes


the correct steps to care for and upkeep of their property. Unfortunately, the most costly are oſten out of their control and there is no real way of preventing damage as a result of storms.”


Landlord insurance claims on the rise


Market analysis from Total Landlord Insurance has revealed the number of landlord insurance claims increased by 13 per cent during the pandemic, with malicious tenant damage among the fastest growing causes of a claim. Te figures show that landlord insurance claims


increased by 13 per cent between 2019 and 2021, from 536 annual claims up to 603. During this time, the fastest growing reason for a landlord insurance


claim was storm damage which increased by 93 per cent during the pandemic, from 70 claims in 2019 up to 135 in 2021. Malicious damage has also been an increasingly


common cause for landlord insurance claims during the pandemic, rising by 50 per cent between 2019 and 2021. During the pandemic, the average landlord


insurance claim size also increased. A rise of 29 per 24 | HMMOctober/November 2022 | www.housingmmonline.co.uk


cent was seen between 2019 and 2021 as the average claim rose from £5,773 to £7,429. Te biggest rise in the size of a claim was seen in


liability insurance claims. Liability insurance is that which protects the landlord against any harm or injury that befalls a tenant while inside the property, and during the pandemic, the average claim increased by 270 per cent from £1,306 to £4,827. At the same time, the average claim for storm


damage increased by 140 per cent, break-in claims rose by 101 per cent, and claims for underground services went up by 95 per cent.


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