Tag Archives: insurance
Survey reveals lack of knowledge in UK about home insurance
Some 1.6 million UK home owners have bought home insurance from their lender and many mistakenly believe they cannot switch for a better deal, according to a new survey. Some 30% or 466,200 households believe their home has to be insured with their mortgage lender as a condition of the loan and 6% were told by their lender that it was a mandatory purchase. On top of this 24% think switching away from their lender’s insurance will invalidate their mortgage, according to the survey from Gocompare Home Insurance. Overall it found that 14% of home owners arranged their home insurance through their mortgage lender and 30%, almost half a million home owners, believed that they had to arrange their home insurance through their mortgage lender as a condition of their mortgage deal. And 24% of borrowers who arranged their insurance with their lender think that switching their insurance to another provider will invalidate their mortgage while 12% say they felt under pressure to buy their lender’s home insurance and 6% said they were told by their mortgage provider that they had to. Protecting a property with adequate buildings insurance, typically against fire, flooding, subsidence and storm damage, is as a requirement made by all mortgage lenders. Buildings insurance provides financial protection for the borrower, and ultimately the lender, from damage to the main structure of the home. While most lenders offer home insurance, borrowers are not obliged to buy it for them. However, the practice of compulsory home insurance tied-in mortgage deals was never formally outlawed despite promises to do so in the late 1990s. When questioned why they had opted to buy their lender’s home insurance, the survey revealed a mixture of misunderstanding, misplaced trust in their mortgage lender and consumer apathy. For example, 14% thought buying their lender’s home insurance might help with their mortgage application, 9% said they didn’t realise they could buy cover elsewhere, 22% said that their lender gave reassurances that the product was good value, 50% think that their mortgage lender provides the best value cover for their home insurance and 49% had opted to do so out of convenience. The survey also found that 72% hadn’t compared products and prices offered by other providers and 34% of home owners who arranged cover through their lender didn’t check cover levels and excesses to make sure they were buying the right policy. According to statistics published earlier this year by the Association of British Insurers, the main reasons for household insurance claims being rejected included the claim value being below the policy excess and the incident not being adequately covered by the policy. ‘We were shocked to find that so many people still think that their mortgage offer is conditional on buying their lender’s home insurance, and that a significant minority are essentially in a mortgage linked insurance trap, believing that switching away from their lender’s insurance will invalidate their mortgage,’ said Ben Wilson from Gocompare Home Insurance. ‘We… Continue reading
More people in UK want to buy a home but are concerned about rising prices
More people dream of becoming home owners in the UK with new research showing 73% aspire to owning a property, up from 65% four years ago. However some 78% of aspiring home owners are concerned about the availability and quality of homes, up 6% from last year, and house prices, the ability to get on the property ladder and saving for a deposit continue to top the nation’s list of housing concerns Overall the 2016 home owner survey conducted by YouGov for the HomeOwners Alliance and BLP Insurance suggests that the housing crisis is deepening as concerns mount about the availability and quality of homes. While the desire to own is rising, the ability of first time buyers to get on the housing ladder and saving for a deposit remains the top concerns nationally, at 82% and 80% respectively. On top of this, the proportion of aspiring homeowners who say that the availability of housing is a serious problem has increased to 78%, up from 72% last year. Aspiring home owners are also increasingly concerned about the quality of housing, with 60% saying it is a serious problem. The survey shows that the housing crisis is most acute in the capital, as Londoners head to the polls to elect a new mayor. However, there is a noticeable drop in concern about the rates of stamp duty, in the wake of the government’s reforms of the stamp duty system. Concern about negative equity has slumped among the UK overall to 44% from 64% two years ago, as house prices have continued to rise. ‘Despite government initiatives aimed at helping home owners, the housing crisis is deepening across the country, with ever more non-home owners wanting their own home, and ever greater concern about the lack of housing,’ said Paula Higgins, chief executive of the HomeOwners Alliance. ‘Many government policies have boosted demand for homes, but what this survey shows is that the real problem is the desperate shortage of houses. Until the government tackles the fundamental issue that we just don’t have enough good quality homes, the housing crisis will continue to deepen and a generation will continue to have their dreams of homeownership crushed,’ she added. According to Kim Vernau, chief executive of BLP Insurance, the current situation is a critical juncture for the construction industry and housing market. ‘The government urgently needs to speed up the delivery of new homes for aspiring first time buyers. Tenures of all types are required across the country and affordable housing and social housing should also be a priority,’ he said. ‘Balancing these competing demands is a challenging task, particularly given the shortage of labour skills that we are currently witnessing in the construction industry. This is likely to get worse in the absence of key initiatives to help address this critical issue and the new Housing and Planning Bill and threat of… Continue reading
