The UK’s property market has been through an unprecedented period in 2020. The year started buoyantly. With a new majority government, the Brexit uncertainty was finally (temporarily?) resolved and with the wider economy set fair, a previously sluggish property market sprang into life and demand for properties soared. We enjoyed an exceptional couple of months and requests for home and landlord insurance quotes flooded in. Things were good, expectations were high and we were looking forward to another great year.
And then COVID-19 hit our shores and things stalled…
Now, with lockdown easing and the housing market having received a welcome boost in the form of the stamp duty holiday, things are starting to look up again. To try and gauge the effects of the crisis and the state of the property market we spoke to one of Coversure’s leading property insurance brokers, Rajan Amin of Coversure Croydon, to get his take on things
Q. How has the first half of 2020 been for you in terms of property owners’ (PO) insurance?
We had a very positive start to the first quarter of 2020. Property business played a big part in this and has helped cushion us from the downturn that we saw in the last quarter
Q. Lockdown presumably slowed PO new business down (or did it?). Have you seen a rise in enquiries since the rules were relaxed?
Yes, on both counts. Since the easing of lockdown, we have seen queries for development projects and our existing landlord clients return so we are cautiously optimistic about the rest of the year
Q. Croydon is obviously part of the greater London metropolis; how has the rental market been over the past 12 months or so? Has the market softened do you think?
We have several letting agent clients locally who say the market remains strong. Covid-19 and lockdown saw these businesses stand still for a short time, but they have returned to a market that is worried about what is to come after furloughing ends
Q. Unoccupied property has become a big problem – especially for commercial property owners – in the recent crisis and may become an issue again later in the year as COVID returns. Do you think enough landlords are aware of the issues surrounding empty property?
Insurers have been very quick and helpful to reassure policyholders by extending full cover during lockdown. We believe the majority of landlords are not aware of issues surrounding empty property and the need to inform their insurer/broker, lockdown or not. That is why regular contact and a good pre-renewal process is essential to ensure the correct cover for the client
Q. Unoccupied property can be expensive. Would you say it’s worth the investment and do have insider’s tips for saving on cover?
Expense is not the issue; the question is what are you paying for? There’s no point having a policy that will not pay due to non-disclosure and only return your premium. Full disclosure with timeframes, cost of works with summary of works being done, partial occupancy and details of contractor(s) can all help get the best terms from insurers. Add to this that the right cover can be amended to occupied/let and provide a refund of premium. Advice is the key and it’s really important to get some independent insurance advice when it comes to property cover
Q. Another big issue at the moment is underinsurance. A recent Nelson report stated that 1 in 4 UK homes had no insurance at all and that 80% of commercial properties are underinsured. Why do you think that is and what risks does property underinsurance bring to a property owner?
The figures are not surprising but there is no excuse for not having insurance; that’s a risk the owner carries knowingly. Underinsurance is down to a few factors such as incorrect sum insured – a huge problem – and clients/broker not having the right conversations – and indexation by an insurer giving a false sense of security to the client/broker, but useless if the starting point building sum insured figure is wrong. Brokers having online tools and access to RCA are great ways to add value to the client and prevent this potentially disastrous situation from occurring
We have seen the dangers of underinsurance at claim stage for PO policies. There is no hiding the fact and you can only wish for an amicable insurer / loss adjustor to come to an agreeable settlement.
Q. If someone is worried about being underinsured what steps can they take, can you help?
Do they have a lender’s/bank valuation report stating the re-build value? How old is the report? Have they had any works done since they bought the property, what was the cost of works? These steps can help establish a re-build figure. At Coversure we can offer an affordable, fixed price desktop or site visit reinstatement report from RCA
Q. Working from home looks set to become the norm as we enter the post-COVID ‘new normal’. If you are thinking of working from home on a long-term basis, are there any insurance implications?
I was a big critic of working from home, but now I am a big fan. The only downside I see is the loss of interaction with my team. The ability to shout out a question and get a reply back, or walk over and help with a system issue and of course the office banter!
But seriously, there are insurance implications to working remotely and people would be wise to either get some advice or consider taking out a homeworkers’ insurance policy
Q. When it comes to getting landlord insurance, what’s the one piece of advice you would give to a new landlord looking for cover?
Get advice from a good, independent insurance broker. Online providers do not give advice, so you will not know if the cover is right for you or not. You will only know the true worth of the advice/cover when you need to make a claim, so do not leave that to the click of a mouse!
Q. And finally… Are you optimistic or pessimistic regarding the Croydon property market over the next 12 months?
Recent news about the Westfields project and our Council’s budget are not looking good. A large development in the heart of Croydon (our old office) has stopped work since last October too. However, smaller developers / landlords will continue to invest in Croydon and driving around you see signs of renewed activity everywhere. These are our clients and our target audience, so quietly optimistic!
Thank you, Rajan, informative as always!
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