As most people working in financial services know, it has become much more difficult to get a mortgage since the affordability rules came into force a few years ago. The days of self-certifying your own mortgage have long gone, and given a decade-long freeze on wages in real terms, when set against inflation, that means fewer house sales – especially outside the London/SE hotspot.
For insurers and brokers that translates into more people staying put, rather than moving. When they decide to expand the footprint of their property, with a loft conversion, garage into a new room, or a home office/shed outbuilding that new insurance is often needed. Here’s some news from LV;
New research from LV= General Insurance, one of the largest personal lines insurers in the UK, has found that 15 million (86%) homeowners decided to make improvements to transform their house into their ‘forever home’, such as redecorating in their own style (58%), refurbishing the kitchen (50%) and landscaping the garden (39%). Three in 10 (28%) homeowners living in their ‘forever home’ have stayed put and renovated their current home instead of moving further up the ladder, because they felt it was too expensive to do so.
Heather Smith, Managing Director of the LV=GI Direct business, comments: “When looking to buy a property, especially one where you intend to stay put, it’s important to consider which factors are most important to you. With house prices continuing to rise and uncertainty in the market, our research shows that the vast majority of homeowners are choosing to renovate their current property to create their ‘forever home’.”
What makes a forever home?
More than half (53%) of homeowners say the house they live in now is where they plan to stay put. Those who don’t currently own their ‘forever home’ – a home which somebody owns and intends to live in indefinitely – think they will buy it at an average of 49 years old.
Encouragingly, our survey of ‘forever home’ owners found they bought theirs at an average of 41 years old. With the average age of first-time buyer now 31-33 years old, homeowners may not have to wait as long as they think for their ‘forever home’ after getting on the property ladder. LV=GI’s new tool will help homeowners gain a better understanding of when they could be in their forever home based on their region, and what to expect in regards to price and property type.
Protect the home you love
With the number of homeowners improving their existing property on the rise, almost half (47%) of those who have renovated their home admit to not alerting their home insurer before they started construction, leaving them at risk of potentially not being insured should anything go wrong.
Data from the ABI shows that one in four UK households – some six million – have no home contents insurance to cover their possessions leaving them at risk if something happens to their home. LV=GI research supports this, showing that 6% of homeowners currently don’t have home insurance.
Heather Smith, Managing Director of the LV=GI Direct business, continues saying; “Renovations can take up a lot of time and money, and with your home being your most valuable possession, it’s important to have the right protection for your home and its contents. We’d encourage people to tell their insurer about any planned structural work, such as an extension, loft conversion or new roof, to ensure that cover is in place.”