Data from the latest English Housing Survey shows a pretty even split across homes that are owned outright, those that are mortgaged and those that are rented. Of the 22.6 million households in England, just over a third (36.7 percent) are rented while just under a third are either mortgaged (30.6 percent) or owned outright (32.7 percent).
Importantly, the data shows that the younger generation are increasingly struggling to own a home. In 2013-14, almost half of 25 to 34-year-olds (48 percent) rented their home from a private landlord. This represents a rise on the previous year while ten years ago, less than a quarter (21 percent) lived in privately rented accommodation. The proportion of English householders in this age group owning their own home has fallen from 59 percent to 36 percent over the last ten years.
This decline in the number of young and first-time buyers may well be helping to cap the rise in house prices. And despite possible government initiatives such as the Starter Homes scheme proposed by the Conservatives if they are returned to power in May, it is unlikely that we’re going to see 25 to 34-year-olds return in droves to the residential property market as they still face the issue of trying to save for a deposit.
So does this preclude this age group from a broker’s marketing activity? I’d argue not. These young people still need advice when it comes to their finances and one way of starting to build a relationship with them is by helping them with tenants insurance.
Many probably don’t believe their possessions are worth enough to bother insuring, particularly if they are renting a furnished flat for example. Some may be under the misconception that their contents are insured by their landlord. Others may think they’re ok as they have a contents insurance policy – but it may only provide limited cover and so may not offer protection for personal possessions away from the home. As we become increasingly reliant on mobile devices, I can’t imagine a single 25 to 34-year-old without at least a smartphone or tablet that goes everywhere with them!
It’s all too easy to underestimate the value of personal possessions accumulated over a period of years and many may be tempted to take a chance, especially as insuring personal possessions at a rented property is not compulsory. However they could live to regret this when valuable belongings that would have been covered by tenant contents insurance are lost, stolen, damaged or destroyed.
Starting a dialogue early enough with this age group and providing solid advice could be the foundation of a relationship that will grow as they too grow older, build their savings and start looking for their first home.
Kevin Paterson www.thesource.co.uk
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