Stamp duty holiday: what next for mortgage brokers?
Phil Jeynes is director of corporate strategy at Reassured
Buying a property is the biggest financial transaction most people will make. The majority will save for years to get onto the housing ladder and, with many determined to take advantage of the government’s stamp duty holiday, we have seen a huge surge in property purchases in the last year.
At least, that is how it seems from an industry outsider’s perspective.
Almost 200,000 property transactions were completed in June 2021, according to HM Revenue & Customs data, and it’s likely there will be a further rush of transactions this month as buyers battle to meet the deadline for the tapered stamp duty holiday on 30 September.
Such a rise in new properties purchases should naturally be followed by a corresponding increase in life insurance policies being bought.
It should go without saying that a review of life insurance should go hand in hand with any house purchase. However, in their haste to meet the stamp duty deadline, it has been easy for buyers to overlook what they might consider an added extra and, worryingly, very few have taken out life insurance policies to protect themselves and their families should the worst happen.
Almost half of those who have a mortgage (42%) do not have life insurance in place, according to Finder.com.
This is particularly troubling when thinking about first-time buyers. They arguably had the most to gain from the tax holiday.
However, they are also the least likely demographic to have had life insurance in place previously, and with new furniture to buy or renovations to make, they are perhaps not prioritising getting the necessary protection in place.
Mortgage brokers have a huge part to play in this fight to ensure homeowners are properly covered. Advisers need to provide holistic advice to their clients, covering everything from the best mortgage interest rates to the life insurance options best suited for their circumstances.
They must highlight the dangers of failing to choose the right protection or having no protection at all. It is easy for clients to fall through the cracks, but we need to change the conversation to highlight just how vital life insurance is, and mortgage brokers are in the best possible position to do so.
However, they are not on their own. By partnering with a reputable financial services provider, mortgage brokers can ensure their clients are given the most comprehensive protection options.
Doing so with an independent insurance broker is beneficial too, giving the client access to a much wider variety of products than they would have otherwise.
As well as ensuring their clients are protected, this will strengthen the bond between advisers and their clients for years to come, so it’s a win for everyone involved.
For those who have been able to take advantage of the tax holiday, it has been a very welcome measure. Thousands have been helped onto the property ladder when they might not have been able to do so otherwise, but the rush to complete purchases before the deadline could have led to other important matters being overlooked.
Confidence in the property market has been high, but even the most confident buyers must also ensure they are covered for all eventualities.