Landlord Insurance 2017

£5,000 + VAT

A lack of affordable housing in many parts of the UK has resulted in healthy and sustained demand for rented accommodation. This, along with the availability of buy-to-let mortgages, has made investing in residential rental property an attractive endeavour, which in turn has boosted demand for landlord insurance. Recent events, however, have introduced greater uncertainty for residential property investors. In addition to Brexit, the government has introduced several landlord-impacting legislative changes, designed to help first-time buyers get on to the property ladder.

This report is a detailed examination of the residential landlord insurance market, enabling readers to better understand the needs and wants of landlords in a continually changing environment. In addition to detailing ownership of landlord insurance policies, the research uncovers the most important considerations when choosing a policy, and how landlords research and arrange their coverage. In addition, the report provides data on policyholder claims activity and experiences, and details what motivates switching activity. The final sections of the report provide valuable information about what landlords think about the recent developments impacting property investors and how they plan to respond.

This report is the third in YouGov Reports’ Landlord Insurance series, following editions published in 2015 and 2016.

Report coverage & methodology

For this report, YouGov Reports commissioned a survey among YouGov’s online panel, which drew on a sample of 1,009 UK adults aged 18+ who own landlord insurance.

In total, over 40 questions were asked, covering the following topics:

• Number and type of rental properties owned
• Tenants and type of occupancy
• Type of landlord and how property was acquired
• Types of insurance and cover included
• Multiple policy ownership
• Renewal preferences
• Payment preferences and amount spent on landlord insurance
• Provider and length of time with them
• Reasons for taking out a policy and important factors when choosing
• Trust in provider
• Research conducted; devices used to do so
• Influence of managing/letting agent
• Method used and direct/non-direct arrangement of landlord insurance
• Challenges in buying/renewing
• Understanding of cover
• Maintenance obligations and checks, and the associated costs
• Reasons for and satisfaction with handling and settling of claims
• Past switching, reasons and future switching plans
• General attitudes towards landlord insurance.

A full list of questions that were asked in the YouGov Reports survey is provided in the Appendix. Cross-tabulated results to these questions are available for subscribers to this report – please contact us on 020 7012 6063 if you would like detailed tables.

 

 

 

 

 

 
Report Info
Table of Contents
  • Table of Figures
  • Introduction and Scope
    • Report coverage & methodology
      • Abbreviations
  • Report Overview
  • Report Summary
    • Owning a policy is viewed as a must
      • Key facts
      • Buildings insurance commonly held but just a third own contents cover
      • Half arrange their policy directly
      • Cost of premiums remains most important single factor considered
      • Average spend on a landlord insurance policy holds steady at £33 per month
      • Three in five believe they are informed about policy details
      • Owning more properties increases claims likelihood
      • Two-fifths have switched before and half would consider it at renewal
      • Potential for growth in landlord insurance GWPs constrained by new legislation
      • Many landlords are considering selling, but more plan to hold on
  • Background
    • Key findings
      • Two in five policyholders own two or more residential rental properties
      • Terrace houses and flats remain the most common types of rental properties
      • Most classify themselves as part-time landlords
      • As before, relocation often creates ‘accidental landlords’
      • A consistent three fifths of landlords use a managing or letting agent
      • 53% who do not use a managing agent, use a tenancy deposit protection scheme
      • Working professionals remain the most likely tenants
      • Nine in 10 properties are rented out on a single occupancy basis
  • Landlord Insurance Policy Ownership and Coverage
    • Key findings
      • Multiple property owners split on holding separate policies
      • Liability insurance is the most-likely (known) inclusion
  • Attitudes Towards Landlord Insurance
    • Key findings
      • Most policyholders view landlord insurance as a must
      • Lack of claims activity makes it difficult to determine value
      • Sense of responsibility and peace of mind are the key motivators
      • Most become aware of the need for specialist landlord insurance on their own
  • Landlord Insurance Information Resources
    • Key findings
      • Comparison sites and providers remain the top information resources
      • Most still using a desktop/laptop to conduct research
  • Choosing a Landlord Insurance Policy
    • Key findings
      • Cost of premiums remain the most important thing
      • Owners of multiple properties more likely to consider policy details
      • Relationship between channel used and what is considered important
      • For most a managing or letting agent does not influence choice of provider
  • Buying and Renewing Landlord Insurance
    • Key findings
      • Half of policyholders buy directly from providers
      • Insurance brokers still a popular intermediary for multiple property owners
      • Online and telephone remain the most popular buying channels
      • Online sales still primarily made via PCs but smartphone-based sales may grow
      • Researching a new policy more than a month prior to renewal uncommon
      • 44% of multiple policy owners prefer a single renewal date
      • Understanding what is covered and ensuring proper coverage remain key issues
      • Multi-property owners most likely to say finding a good deal is a challenge
  • Landlord Insurance Expenditure
    • Key findings
      • Average spend on landlord insurance remains at £33 per month
      • Owners of landlord buildings and contents pay an average of £36 per month
      • Owners of multiple rental properties pay an average of £40 per month
      • Price comparison site use looks to pay off
      • Annual billing is the majority’s choice
  • Providers of Landlord Insurance
    • Key findings
      • Direct Line remains most likely to be used
      • Approaching two thirds have been with their provider for at least two years
      • Few policyholders would promote their provider…
      • …but a majority trust the insurers providing their policies
      • Other types of insurance products held with landlord insurance provider
  • Knowledge of Policy and Meeting Requirements
    • Key findings
      • Three in five believe they are informed about their policy details
      • Policyholders rate their understanding fairly high
      • Most claim strong understanding of maintenance requirements
      • Frequency of maintenance checks is unchanged
      • Proper maintenance of rental properties is a widely held principle
      • Many less experienced landlords are given pause by maintenance obligations
  • Landlord Insurance Claims
    • Key findings
      • A minority have made a claim in the past five years
      • Plumbing, flooding or storm damage still the top reasons for making a claim
      • Three in four claimants are satisfied with the handling and settling of their claim
  • Landlord Insurance Switching
    • Key findings
      • In the past five years 44% of policyholders have switched their provider
      • Switching activity is highest among owners of multiple properties
      • Better deals elsewhere are the prime motivator of switching activity
      • Most rate the switching process as very easy
      • Few definitely will switch at next renewal, but many are considering it
  • Market Trends
    • Key findings
      • Landlord insurance GWP estimated at £2.45 billion in 2016
      • Future developments
      • Landlords will be adjusting to unfavourable legislative changes
      • Owning a rental property now seen as less attractive but few regret it
      • Less BTL investment likely, but many will hold on to existing property
      • More BTL investors say they will be using limited companies going forward
      • Competition for BTL business has intensified resulting in attractive lending rates
      • Three in 10 believe Brexit may create opportunities for well positioned landlords
      • Tenants look likely to see higher rents due to legislation
      • Half of policyholders say the changes will cause them to review their coverage
  • Appendix
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