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Insurance initiative claims to address growing incorporation risk

A new personal guarantee insurance protection service has been launched for professional landlords - triggered by a surge  in incorporation.

Purbeck Personal Guarantee Insurance claims that as many as 74 per cent of recent buy to let mortgages have been taken out by limited company structures.

And it says that professional landlords using such structures are commonly asked to sign a personal guarantee as a condition of the mortgage.  


This provides the mortgage lender with direct recourse to the professional landlord’s personal estate should the landlord fall into arrears and there is a shortfall following property repossession by the bank.  

This scenario could become increasingly likely if property prices keep falling, claims Purbeck. 

It says its product will cover 80 per cent of an outstanding mortgage if repayments fall into arrears and the lender seeks to take action to recover the property.

Part and parcel of insurance cover is access to Purbeck’s Support Desk when a Professional Landlord is facing financial distress, providing access to expert financial advice and mentoring support to help prevent repossession of a property.

Managing director Todd Davison says: “Mortgage advisers will be aware of the personal guarantee risk associated with mortgages taken in limited company structures but there have been few options when advising clients on the ways they can limit that risk. 

“Now, for the first time, advisers can offer Personal Guarantee Insurance as a solution to that challenge. Our introductory process is very simple and a dedicated portal allows advisers to keep track of applications.”

Purbeck says it’s supported over 2,000 directors on over £275m of Personal Guarantee commitments over the past six years in respect of business loans.

In other insurance news, Leek Building Society has announced its new partnership with Uinsure, designed to improve members’ experiences when arranging landlord insurance.

By working with Uinsure, Leek members can get a quote from 20 seconds and buy online in under a minute.

Ian Blurton, head of branch network and customer support at Leek, says: “Our partnership with Uinsure emphasises our commitment to offering [[members] peace of mind by providing access to highly rated home and landlord insurance through integrated and seamless journeys that are accessible, convenient and priced competitively.”

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    Another one for the band wagon on the backs of landlords. I pay my Insurance Company, insurance premium every year based on full rebuild costs. 50 years no claim and counting still hasn’t fallen down. Gov’ will be delighted more premium tax to add to the already £1’880m.
    Can’t keep up, use not be 5% then 9% now I think 12% but don’t quote me just from memory seems to be all lumped into the price.
    Tax Penalty to Insure your House you already paid income tax on your money, no way to spend your money without getting taxed again / vat.


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