Review: General Insurance
Make the most of the buy-to-let boom by
Jason Berry, head of key accounts, Uninsure
Te buy-to-let sector is boom- ing once again. According to the latest figures from the Council of Mortgage Lend- ers, in Q2 of this year a mas- sive £5.1bn of buy-to-let loans were advanced and both the number of loans and the total value were at their highest lev- els since Q3 2008. Te government’s Funding
for Lending initiative is clearly having an impact on the buy- to-let market and the increase
in confidence is rubbing off on lenders who are relaxing crite- ria almost across the board. It’s great to see the sector
make such a great recovery. It was one of the hardest hit ar- eas when the credit crunch hit but brokers and lenders have shown resilience and clawed their way out of a slump.
Essential insurance Tis renewed activity in the sector presents a huge oppor- tunity for brokers, not just in terms of buy-to-let loans but also in selling insurance prod- ucts. Landlords will no doubt be
enjoying the current boom but if they don’t protect them-
selves correctly they may find themselves being brought back down to earth with a bump. Ensuring your customers
are adequately insured should be standard practise but when it comes to landlords there are more opportunities to offer in- surance than you may think. For landlords building and
contents insurance is not as straightforward as for home- owners. Te insurance needs of the landlords will differ considerably depending on the
property, for example
whether it is furnished or un- furnished, occupied or vacant. Ten of course there is rent guarantee insurance
which ensures a landlord is covered should they experi- ence a void period with their property. Indeed, with the market booming and more properties becoming avail- able, void periods may not be uncommon.
Income protec-
tion could also be an option. If a landlord is stretched as is what would happen if a tenant should default or the landlord should find himself unem- ployed? Tere are countless oppor-
tunities on offer in the buy- to-let market, and suggested advice would be to make sure you’re doing right by your cli- ents (and your income stream) by seizing them.
It’s important to focus on the positives As the Payment Protection
Insurance (PPI) scandal con- tinues, there’s no denying the impact the crisis has had – and indeed, continues to have – on the protection market. Te scandal – which saw
millions of people sold expen- sive PPI policies they either didn’t want or didn’t need – has put many people off pro- tection products. And it’s un- derstandable. It’s very easy to tar the whole market with the same brush. But income protection
should remain a core focus when financial planning and
certainly mortgage payment protection insurance remains a vital product. A report published at
the end of last year by Defaqto
entitled Opportunities in Pro- tection post PPI listed the most common reasons people state when turning down income protection problems. It claimed many people take
an “it’ll never happen to me” approach on falling ill. Yet the report reveals that there are 2.61 million people of work- ing age in receipt of disability benefits, 4% of the population, and over half of them had
NEW Independent Landlord Guide.
Transferring the knowledge is common sense. Visit
themortgageworks.co.uk/landlordguide
24 MORTGAGE INTRODUCER SEPTEMBER 2013 |
For Intermediary use only. The Mortgage Works (UK) plc is a wholly owned subsidiary of Nationwide Building Society, Nationwide House, Pipers Way, Swindon SN38 1NW.
common sense lending T800 08/13 V1
www.mortgageintroducer.com
been in claim for more than five years.
Mythbusting Another, common excuse giv- en was that because life cover was in place, income protec- tion was not needed. Howev- er, according to the Office for National Statistics, people are 15 times more likely to suffer a long-term illness or disabil- ity than to die before retire- ment and most employment contracts only allow 30 days full sick pay before moving to Statutory Sick Pay (SSP). Tis
report may well be
nearly a year old but I would certainly recommend it to any brokers wanting help on sell- ing income protection. Te opportunity is certainly there, it’s just a case of busting the myths many consumers hold about the product. Yes, confidence in income
protection has taken a beating but you can find the positive in this. Spend time with your cli- ents and find the best income protection policy for them rather than letting them get whatever product their mort- gage lender offers. Show them how useful your advice can be.
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