With the current scramble for Olympic tickets, some successful applicants will also be looking for somewhere to stay during the 2012 London Games. A specialist insurer for the residential lettings market is warning landlords that their insurance cover could be invalidated if their tenants sublet.
The market is already very active, with prices ranging from £2,500 per week for a one-bedroom flat in Stratford to £6,500 a week for a four-bedroom house in Berkshire. But, according to insurer PropertyRisks, subletting to take advantage of these lucrative deals would be regarded by the insurer as unauthorised and cover could be voided or prejudiced. The tenant would not only have to cover the cost of damage to their own property: it’s also likely they’d be responsible for the replacement or repair of landlords’ fixtures and fittings.
While tenants may cover potential problems by asking for large damage deposits, this may be insufficient if they are tempted to boost occupancy levels too high. There are reports of a one-bedroom flat being advertised as suitable for four people, and a two-bedroom apartment for six to eight. This considerably increases the risk of damage.
According to PropertyRisks, some landlords may be tempted to do a deal with tenants and share the profit: “If they agree to subletting in this way, their cover could be invalidated. The ultimate risk then is that the sublet tenants decide not to move out at the end of the rental period, and legal costs to re-secure the property may not be covered.”