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United Kingdom (UK) Private Landlord Insurance 2021

  • ID: 5305269
  • Report
  • March 2021
  • Region: United Kingdom
  • 37 pages
  • GlobalData

FEATURED COMPANIES

  • Admiral
  • Aviva
  • Direct Line
  • Home Protect
  • Lloyds Banking Group
  • Privilege
  • MORE
1h Free Analyst Time

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Summary

This report estimates the size of the UK’s residential landlord insurance market and explores how it has changed in recent years at a time when the buy-to-let sector has been hit by a host of regulatory changes. The tightening of regulation has led to a shift in the profile of landlords, which in turn has changed their insurance needs. The report discusses drivers of the buy-to-let and private residential markets, which directly impact the private landlord insurance market. The report presents market size forecast data out to 2025.

We estimate the residential landlord insurance market was worth £716.8m in 2020, having contracted in recent years. The once buoyant market has been vulnerable to the fate of landlords. The profitability of buy-to-let (BTL) investors has been squeezed by a raft of tax and regulatory changes, forcing some landlords to sell their properties and exit the market. While there are fewer landlords in the market, on average those that continue to operate have more properties. Multi-property policies are best suited to portfolio landlords, given the convenience of protecting all properties under one policy, but premiums come at a discounted price. The residential landlord insurance market is set for a bumpy ride going forward. COVID-19 has shifted tenant preferences away from city centers to more rural locations. Some investors may hold off on acquiring further properties until it is clear whether this change is temporary or long term.

Scope
  • The residential landlord insurance market was worth £716.8m in 2020.
  • Underinsurance remains the greatest opportunity for insurers, with 41.4% of landlords not having specialist cover or protecting their investment property at all.
  • The tightening of legislation has forced some landlords to exit the market, leading to new emerging client groups.
  • COVID-19 has eroded business from home-sharing platforms, forcing some landlords to switch their properties to traditional long-term lets.
Reasons to Buy
  • Understand the size of the UK’s private residential landlord insurance market and how it is projected to grow.
  • Identify the key trends and regulations shaping the private landlord insurance market.
  • Understand the changing demographics of landlords and their insurance needs.
  • Identify key players in the private landlord insurance market and to what extent they are providing innovative solutions
  • Benchmark your company against the rest of the market.
Note: Product cover images may vary from those shown

FEATURED COMPANIES

  • Admiral
  • Aviva
  • Direct Line
  • Home Protect
  • Lloyds Banking Group
  • Privilege
  • MORE
1. Executive Summary
1.1 The residential landlord insurance market has shrunk as landlords feel the BTL squeeze
1.2 Key findings
1.3 Critical success factors

2. Residential Landlord Insurance and Private Residential Market Overview
2.1 The residential landlord insurance market has contracted
2.2 A swathe of regulatory changes have made the BTL market less attractive for investors
2.3 COVID-19 stirs property prices to an all-time high

3. The Profile of Landlords
3.1 The profile of landlords is changing

4. Competitive Landscape and Product Distribution
4.1 Key players and elements of cover
4.2 Distribution dynamics

5. The Market Going Forward
5.1 The UK private landlord insurance market will stabilize

6. Appendix
6.1 Abbreviations and acronyms
6.2 Methodology
6.3 Secondary sources
6.4 Further reading

List of Tables
Table 1: Residential landlords can now only deduct finance costs based on a basic rate
Table 2: Example of tax payable during 2020-21 tax year on a rental property held by a limited company vs. held in the personal name of a landlord
Table 3: Private landlords pay a 3% surcharge on top of the standard SDLT rate since April 1, 2016
Table 4: Among incumbent insurers, Admiral offers greater cover to landlords using home-sharing sites

List of Figures
Figure 1: The residential landlord insurance market was worth an estimated £716.8m in 2020
Figure 2: 41.4% of private landlords do not have adequate cover or have no insurance at all
Figure 3: The proportion of private rented households has declined since 2016-17
Figure 4: Growth in the number of private rented households has been sluggish since 2016
Figure 5: The number of companies set up to hold BTL properties has escalated since 2016
Figure 6: Average UK house prices peaked at almost £250,000 in November 2020
Figure 7: Gross advances and new residential lending commitments fell sharply in Q2 2020
Figure 8: The proportion of BTL advances fell from 14.4% in Q2 2020 to 12.5% in Q3 2020
Figure 9: Annual private rental price growth in the UK has been flat since November 2019
Figure 10: London experienced the weakest annual rental price growth in 2020
Figure 11: Saving for a deposit and unaffordable house prices lock adults into rented accommodation
Figure 12: 20% of UK adults had to put home-buying plans on hold in 2020
Figure 13: A larger proportion of renters have been furloughed compared to homeowners
Figure 14: Most landlords own just one investment property
Figure 15: The majority of landlords have purchased their investment property
Figure 16: 75.9% of landlords are aged between 30 and 54
Figure 17: Younger landlords make up an increasing share of the total
Figure 18: Airbnb has placed greater focus on longer stays since 2020
Figure 19: The top five players all strengthened their market share in 2020
Figure 20: Admiral allows customers to create a bundle of different insurance cover under one policy
Figure 21: More than half of all private landlord policies are sold through insurers and brokers
Figure 22: Online via a PC or laptop is the most common way for landlords to take out their cover
Figure 23: The UK private landlord insurance market is forecast to reach £757.6m in 2025
Figure 24: Prior to the 2021 Budget announcement, up to 105,000 property sales could have missed the stamp duty deadline
Figure 25: The publisher’s forecasting model
Note: Product cover images may vary from those shown
  • Admiral
  • Aviva
  • Direct Line
  • Halifax
  • CIA Insurance Pikl
  • Guardhog
  • Lloyds Banking Group
  • Airbnb
  • Homestay
  • Wimdu
  • onefinestay
  • RSA
  • Vrbo
  • Aon
  • Generali Global Assistance
  • More Than
  • Churchill
  • Privilege
  • Home Protect
  • Intelligent Insurance
Note: Product cover images may vary from those shown
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