Home owner insurance holders need to get proper legal advice as well as insurance cover before letting out a property.

And The Association of Residential Letting Agents (Arla) is reminding would-be let property insurance holders that becoming a landlord to a tenant is a legally binding situation.

Ian Potter is operations manager for Arla.

He says: “That’s the key thing that people need to realize - it’s not a case of changing your mind a fortnight later.”

Mr Potter also urges people to get permissions from their mortgage lender that their insurance covers them for lettings – as complications can occur if not all parties are aware there’s a tenancy.

He says: “If the property has a tenancy and there is a fire for example”, the insurance company can say it wasn’t aware of the tenancy and might not pay out.

A shift in the balance between supply and demand is beginning to emerge, in news that might interest landlords insurance holders.

September saw the number of buyers fall for the second month in a row, according to the latest figures from hometrack.

This is in contrast to the first half of the year when demand had
been steadily rising.

On the supply side, the number of new properties coming to the market in the 9 months up until September, grew by 22 per cent, compared to an 11 per cent increase in demand.

Continuing economic uncertainty both at home and in the Eurozone is likely to dent consumer confidence and that of landlord insurance holders looking to increase their portfolios.

This can only result in demand slipping further over the final months of the year.

As the gap between supply and demand widens, we are likely to see an acceleration in the level of price falls as we head towards the end of the year.

The percentage of asking price being achieved is weakest in northern England where achieved prices are around 9 per cent lower than asking prices. In the short-term this is likely to result in above average price falls in the north of the country.

Prices have fallen for 15 consecutive months (since July 2010). The level of price falls was highest over the second half of 2010 averaging -0.5 per cent per month compared to -0.1 per cent over the last 6 months.

London prices fell by 0.1 per cent over September and were down across 25 per cent of the country.