Why are we so interested in housing?
In 2012 we insured 1.6 million people in their homes against unforeseen circumstances and paid out over £135 million on home and contents insurance to our customers. We also provided 25% of the mortgages to independent financial advisors in the UK marketplace.
We know, however, that others are not so lucky to be able to access the housing market.
In fact, housing needs are a key issue in the UK with increasing costs and a lack of supply in many areas. We interact with the housing sector on a number of levels:
- as a provider of insurance policies that cover people’s homes, their income or perhaps the value of their mortgage upon death;
- as a point of access to the mortgage market; and
- as a provider of funding for residential and commercial property.
A significant part of our financial services business is derived from the UK housing market. We help people find the right mortgage so they can buy their home, move home or rearrange and optimise their finances. We help landlords find the right mortgage for their buy-to-let properties. And, alongside all of this, we provide the trusted advice and reliable products that protect people from losing their homes or investments and reduce the impacts of unforeseen events.
We, therefore,have a keen interest in the health of the housing market. And, our analysis is that all is not healthy. There are a number of reasons for this:
- housing transactions are at about half their long term level;
- people are taking longer and longer between home moves, often causing hardship to their families;
- more people are ‘locked in‘ to homes from which they cannot move;and
- many would-be first time buyers are unable to get onto the property ladder and are forced into less stable and often expensive renting instead.
- Underlying all of these points is a critical one: in the UK, we simply don’t build enough new homes and have not done for many years. This leads to an inflexible market, prone to boom and bust and which is not working for many people.
We are keen to see two things. Firstly, an increased supply of mortgage money into the market to get it moving again. And, secondly, a very significant increase in house building to ensure that future generations have a more stable market in which people can make real choices about where they live and how.
Stephen Smith, Director, Housing & External Affairs, Legal & General Network provides some more thoughts
"Helping people safeguard their homes through contents and life insurance is a vital part of our work. We’re acutely aware of the challenges people face in the housing market, and even more so with the current economic environment. With this in mind, we chose to raise awareness and engage employees and business partners on the housing agenda.
We’re well placed for this – as one of the largest intermediated mortgage distributors in the UK, our Mortgage Club has a mortgage market share of 25%."