Low wage growth, a decade of soaring property prices and a lack of supply all make the prospect of moving up the ladder that much harder to achieve.
While the industry is developing innovative products and solutions, including Help to Buy schemes and the expansion of the specialist lending market, many homeowners are deciding to renovate and extend their homes as an alternative to moving.
Government changes to abolish the restrictive planning permissions around extensions have helped to make home improvements more appealing and this represents a great opportunity for the broker market – 75,000 applications for single storey extensions were granted in 2016 alone.
Brokers can play a useful role in helping to ensure the works and final result are fully insured and that the homeowner’s income (and any borrowings) are sufficient for what they’re trying to achieve.
The benefits of a conversion
Conversions and extensions mean that homeowners can stay in the property they have without dealing with the costs associated with moving such as stamp duty fees.
However, there can be a lot of stress – both emotional and financial – when customers undertake a renovation project, and it is important that homeowners are equipped – and indeed, insured – against the disruption it can cause.
Head for cover
Brokers can be proactively speaking to their clients to check on any lifestyle or financial changes to their circumstances. Homeowners intent on making changes to their property should speak with their broker as soon as possible, ideally before the work starts, so that they can ensure that everything is covered by the appropriate insurance.
Borrowers who fail to do so may find that their current policy is invalid. Poor or faulty work may not be covered under a client’s home insurance policy. It’s therefore crucial that brokers advise on insurance for all home improvement projects, including checking that there is sufficient liability cover should any accident occur during the building work.
Structural damage is a concern with any large-scale building project and this is another area where the broker can add real value, helping clients to understand and prepare for potential risks.
Every renovation project is different.
Some property owners may decide to live away from their home while the property is undergoing work and for these customers, it is important that brokers highlight the need for insurance that covers their property and contents while it is vacant.
By speaking with clients before the work begins – and throughout the building work – brokers can advise and update cover requirements accordingly.
Conversing on conversions
All insurance policies should be reviewed frequently – a process that is often neglected by customers.
Brokers should speak with their clients regularly to ensure they are properly protected and understand the full range of products available, and why they are needed.
Renovating can be a stressful time for property owners, albeit with the ultimate pay-off of seeing their home being transformed. Throughout the process, it is vital that brokers take the opportunity – and invest the time – to support their clients and understand their hopes and fears.
Doing so will build valuable relationships for the long term, as well as ensuring that your client’s conversions don’t turn into a DIY SOS.