The hidden risks of water damage in rental properties

Water damage might not seem like a major threat to your rental property—until it is. A slow leak, a minor roof issue, or an unreported dripping pipe can quickly escalate into costly repairs, unhappy tenants, and disputes over responsibility.

While landlords focus on tenant turnover, rental yields, and maintenance, hidden leaks and burst pipes can silently eat away at their investment—sometimes without warning. Worse still, insurance doesn’t always cover the damage. Spotting early warning signs and taking preventative measures is crucial to protecting your property, avoiding financial setbacks, and keeping your rental profitable.

Regular inspections of the property are a must, and most insurance policies will stipulate this within their conditions. When inspecting a property, there are a few things to look out for that may be an indicate water damage:

• Musty smells or damp odours in rooms
• Water stains on walls, ceilings, or flooring
• Peeling paint or wallpaper bubbling up
• Warped wood or soft spots in flooring
• Sudden spikes in water bills (indicating hidden leaks)
• Mould and mildew growth, particularly in corners and bathrooms

You’ve probably heard the analogy of a swan: on the surface, it glides smoothly across the water, but beneath, its feet are paddling furiously. Water damage can be just like that—what appears minor on the surface may be hiding chaos underneath.

A small damp patch on a wall may not seem alarming, but beneath the surface, there could be a soaked wall cavity, mould growth, or even structural rot. Even worse, the visible damp patch may not be where the actual leak originates—water can travel through floors, walls, and ceilings before appearing in a noticeable area.

That’s why it’s crucial to ensure your insurance policy includes trace and access cover. If a leak occurs and the source isn’t immediately obvious, this cover will pay for any damage caused while investigating the problem. Without it, you could be left with a hefty repair bill.

Ignoring water damage—even if it looks minor—can have serious consequences. Beyond the risk of increased repair costs, damp conditions can lead to mould growth and potential health hazards for tenants.

In the past year, damp and mould in rental properties have been under increased scrutiny, with the UK government issuing further guidance to landlords in August 2024. Now, more than ever, landlords must take proactive steps to detect and address water damage before it worsens.

Sometime damage is inevitable, but often it can be reduced or even avoided by following some simple steps and tackling problems swiftly. There are various things that can be done to either prevent or minimise water damage:

• Carry out regular inspections: Checking plumbing, roofing, and appliances every few months as well as being vigilant for other signs of water damage.
• Tenant education: Encouraging tenants to report leaks early and ensure can do this easily. Inform them of proper ventilation techniques to improve indoor air quality.
• Gutter & Drain Maintenance: Inspect and maintain these regularly, keeping water flowing away from the property. Poor maintenance of a property will not be covered by your insurance, so it is vital that maintenance is carried out regularly and promptly.
• Installing leak detection systems: Smart water sensors can alert you to hidden leaks, helping you address issues before they escalate.

By staying vigilant and proactive, landlords can protect their investment, maintain a safe home for tenants, and avoid costly surprises.