The UK government recently announced several measures to restart the property market, including a stamp duty holiday and other grants for homeowners. Reduced rates of Stamp Duty Land Tax (SDLT) will apply “for residential properties purchased from 8 July 2020 until 31 March 2021”, and a new Green Homes Grant will give “up to £5,000 in vouchers for insulation and double-glazing”. While these measures will no doubt incentivise many to get themselves onto the property market in the coming months, prospective buyers still have a lot to consider before taking the plunge.

Once you have found your perfect home, had an offer accepted and applied for a mortgage, the planning doesn’t stop there! It is also important to start thinking about acquiring any relevant insurance, including adequate life insurance cover, as well as being mindful of costs of any renovation works you wish to complete once you have the keys.

With this in mind, we decided to research first time buyer milestones. Read on to find out more…

First time buyer milestones

To gather additional insight, we surveyed 1,002 homeowners to find out about first time buyer milestones, discovering average timings for executing 10 different insurance and renovation aspects, as well as analysing homeowners’ perceived importance these, to see where people’s priorities currently are.

The research included three insurance considerations, including life insurance, buildings insurance and contents insurance, as well as seven other home renovation aspects, including replacing the boiler, replacing (or adding) double glazing or other insultation, buying new furniture, replacing flooring, modernising the kitchen, modernising the bathroom, and adding an extension (or extending into loft).

The findings suggested that buildings insurance (96%), contents insurance (94%) and buying new furniture (93%) were the most important aspects for new homeowners to execute. Interestingly, adding an extension (or extending into the loft) was the least important aspect included in the research.

Ordered by importance (those who had already executed this aspect, or were planning to do so):

  1. Buildings insurance: 95.8%
  2. Contents insurance: 93.6%
  3. Buy new furniture: 93.3%
  4. Modernising kitchen: 77%
  5. Life insurance: 76.4%
  6. Modernising bathroom: 75.8%
  7. Replace flooring: 72.7%
  8. Replace boiler: 69.9%
  9. Replace / add double glazing or other insultation: 68.9%
  10. Add extension / extend into loft: 47.2%

When it came to reviewing location splits, Belfast, London, and Glasgow all showed high levels of importance for the 10 insurance and home renovation aspects. On the other hand, Nottingham, Cardiff, Sheffield, and Norwich saw these as less essential.

For those that implemented each aspect, we analysed the average timeframes that it took new homeowners to execute them. The results showed that the insurance aspects were the quickest to be completed, with buildings insurance being arranged the quickest of all, within 1.7 months of completion on average. In comparison, it took homeowners 2.4 months to sort contents insurance, whereas life insurance was typically organised within 3.4 months of completion.

The average homeowner bought new furniture within 4.2 months of completion, leaving bigger renovation projects for later, but still within, the first year.

Ordered by timings (quickest to execute following completion):

  1. Buildings insurance: 1.7 months
  2. Contents insurance: 2.4 months
  3. Life insurance: 3.4 months
  4. Buy new furniture: 4.2 months
  5. Replace flooring: 7.8 months
  6. Add extension / extend into loft: 9.3 months
  7. Modernising kitchen: 10.3 months
  8. Replace boiler: 10.5 months
  9. Modernising bathroom: 10.6 months
  10. Replace / add double glazing or other insultation: 11.1 months

The average homeowner will not be mortgage free until age 65 or later

According to Finder, £210,000 was the average house price of homes bought in England by first-time buyers in 2019, and the average first-time buyer mortgage in December 2019 was £174,000. Finder’s statistics also revealed that the average age of a first-time buyer in the UK in 2019 was 32 years old.

Based on a UK Finance report, there has been a continuous lengthening of mortgage terms across all borrower types since 2009, and today “more than 40 per cent of FTBs take out a mortgage with a term of 30 years or more”.

UK Finance also stated that “more than half of the value of new mortgages are not scheduled to finally redeem until the borrower reaches 65 or later”. For age 70+, the figures are between 10-11 per cent, but still on an upwards trend. Based on the most recently updated version of the GOV.uk English Housing Survey data, the “percentage of owner occupiers aged 65 still repaying mortgage is 7.9% for ages 65-74 and 3.3% for age 75+”.

While not compulsory, having adequate life insurance in place is important to ensure that all (or part) of your mortgage would be paid off in the event of your death. A pay out from your life insurance can allow your family to pay off the mortgage after you pass, relieving them of a heavy financial burden. This could prevent your family from having to seriously change their lifestyle or, even worse, lose their home.

You should consider getting covered if you have a partner or children who would struggle to live without your income or who’s life would be hugely affected without you around. At the time of writing, there were more than 45,000 deaths in the UK related to the ongoing coronavirus pandemic, so mortality will likely be at the forefront of homeowners’ minds, both during lockdown and as restrictions begin to ease.

At Cavendish Online, we offer various options to help you find the best insurance for you. You can apply for a policy online yourself, in just a few minutes. Alternatively, you can choose to speak with one of our specialists over the phone, who can guide you through the process and help you choose the best cover for you and your family. For help with your new life insurance policy, call one of our consultants on 01392 241 850

Disclaimer: Cavendish Online are not liable or responsible for the accuracy of the advice provided by third party experts, nor for the content or operation of any third party websites, webpages, or resources which have been linked to within this article.

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