Lending statistics to help you have the conversations
The beauty of working in a Network is that we collaborate with all providers and benefit from a collective knowledge-share. The following information was shared with me from L&G and I want to pass the summary update to you, our advisers:
Housing market update:
- Nationwide poll has found that 84% of people agree the cost-of-living crisis has impacted the purchase of their first property, with 20% of people thinking they will not be able to buy until at least their forties compared to the current average first-time buyer age of 33. Saving for a deposit was cited as one of the biggest barriers to buying a first home.
- BSA report has concluded that first-time buyers are facing the toughest conditions in 70 years to buy a home. According to its report, buying a first home was increasingly reliant on having two high incomes or receiving parental support, while others have been priced out and are “stuck” in renting from private landlords.
- Rightmove has reported that the average asking price of homes listed on its platform increased by 1.1% to £373,324 in April 2024 compared to March 2024 and by 1.7% annually. The platform also reported 13% more sales have been agreed in 2024 compared with 2023, while the number of sellers coming to market is up by 12%.
- Times has reported that bankers, lawyers and other advisers will earn fees estimated at £80m for their work on Nationwide’s proposed £2.9bn takeover of Virgin Money. The Daily Telegraph has also reported on the same story.
- Lloyds Banking Group has forecast that house prices will increase by 1.5% in 2024 after suggesting that house prices would fall by 2.2% in its forecast at the end of 2023.
Lettings update:
- Hamptons has reported that rent paid in a newly let property rose by 6.7% in the 12 months to March 2024, reaching an average of £1,319 per month, compared with a 12% rise in the year to August 2023. In Greater London, the estate agent reported a 5.8% annual rent rise to the end of March to reach £2,304, compared with a 17.1% increase recorded in the 12 months to August.
- ONS has reported that average rents across the UK rose 9.2 per cent in the 12 months to March 2024, up from 9.0% in the 12 months to February 2024. In the 12 months to March 2024, average monthly rents increased to £1,285 (9.1%) in England, £727 (9.0%) in Wales and £947 (10.5%) in Scotland.
Economic update:
- IMF has released new forecasts showing that the UK’s GDP will grow by 0.5% in 2024 compared with global growth of 3.2% and that UK interest rates will not fall to below 3.5% for at least four more years. However, it has also forecast that UK GDP could increase by 1.5% in 2025 – making it the third-best performer among G7 nations – as households recover from the cost-of-living crisis.
- Chancellor Jeremy Hunt has claimed that the UK economy is heading for a soft landing without a significant increase in unemployment and living standards have risen. However, the IMF said that the UK Government’s decision to reduce National Insurance risked worsening the country’s public finances and increasing the UK’s debt burden over the next five years.
- Lloyds Bank’s UK Sector Tracker has reported that nine out of 14 sectors reported output growth in March 2024 – one fewer than in February 2024. Of the 14 sectors monitored by the Tracker, food and drink manufacturers reported the fastest output growth in March (59.1 vs. 51.8 in February). Of the seven manufacturing sub-sectors monitored by the Tracker, only three – chemicals (56.9 vs. 50.4), food and drink manufacturing (59.1 vs. 51.8) and industrial goods manufacturing (50.8 vs. 53.9) – saw output grow.
- Bank of England deputy governor Sir Dave Ramsden has stated that inflation is on course to stabilise at 2% in 2024 and hinted at a downgrade in the MPC’s forecasts for prices growth, due to be released next month.
- ONS has reported that UK export growth has become increasingly dominated by services since 2010, with goods exports increasing by just 7% in real terms, compared with services exports growing by 63% over the same period. Additionally, the UK has consistently reported a trade deficit overall with EU countries and trade surpluses with non-EU countries.
- Nationwide has reported that based on 235m debit card, credit card and Direct Debit transactions £7.5bn was spent overall in March 2024, flat compared to March 2023 although transactions were up 5%. Essential spending fell by 4% year-on-year to around £4.2bn in March 2024, while non-essential spending increased by 4% year-on-year to £3.3bn.
News from conveyancers:
For something a little bit different, Smoove eConveyancer reports new features to boost your conveyancing experience. Read more here.
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Anita White
Head of Lender Relationships
Highlights from our Later Life Lending Workshop
The recent Later Life Lending Workshop was a real success story and a great way to signal the end of the first half of the year; hearing from our provider, solicitor and system partners about all the of the exciting developments coming for the second half of the year. It was a very busy day and always so nice to catch up with our advisers from across the country.
Air Podcast
I had the pleasure of being joined by Air Group CEO Paul Glynn on my latest podcast. We talked about the Comprehensive Conversation Movement, what it is, what it means for you and how technology is being embraced to make significant changes in the world of Later Life Lending.
Air Podcast: The Comprehensive Conversations Movement.
Other news
It is with great sadness and a heavy heart that I would also like to take this time to say ‘Rest in Peace’ to our friend and adviser colleague John Whyte – he will be very missed.
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Victoria Clark
Head of Equity Release
The challenges of probate and protection
Probate processes in the UK are increasingly sluggish, with a staggering 65% surge in cases taking over a year to be granted, as reported by Quilter. The implications of these delays are dire, with grieving families left in limbo, grappling with financial uncertainties.
Consider this scenario; a client’s life cover pay-out entangled in probate, with the family it was supposed to help left waiting for it with the mortgage and other bills needing to be paid. Such a predicament is not merely hypothetical; it’s a foreseeable outcome, begging proactive measures.
Putting life insurance policies into trust emerges as a pivotal strategy. Shaun Moore of Quilter advises, “Upon death, the benefits are paid to the beneficiaries of the trust, bypassing probate delays.”
In a time where probate wait times are skyrocketing, the emotional strain intensifies, compounding the stress of an already arduous journey. These delays bear weighty consequences for families eagerly anticipating the benefits they’ve diligently invested in for years, only to face prolonged uncertainty with living costs needing to be paid for and the money is sat where they can’t access it.
Brokers, take heed, amidst escalating probate delays, advocating for trust arrangements is not just prudent but paramount. It’s about safeguarding your clients’ interests and ensuring financial security in times of distress, which is the whole purpose with our role as an insurance advisor. Don’t fail your clients.
A note from L&G: Improvements to Critical Illness Cover
See below a link which is a high level summary of the changes – A 3 ½ min video which explains and highlights the changes.
You will have to supply your name and email address to register but that takes 5 seconds.
Critical Illness Update | GoToStage.com
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Amanda Wilson
Company Director
Private Medical Insurance Annual Conference
We are gearing up for our very exciting event; Our Private Medical Insurance Annual Conference is taking place on Wednesday 3rd July at Nuthurst Grange Country House Hotel.
The day will run from 10.00am until 3.00pm and will include a mixture of keynote presentations, interactive roundtable sessions and Q&A sessions. There will also be several exhibitor stands for you to explore.
Come along and find out more about the healthcare products on offer, their USPs and reasons to use one provider over another.
You will also pick up sales tips that you can implement straight away!
Please note that spaces will be limited and will be allocated on a first come first serve basis, so book your place now.
Coffee Mornings:
Coffee Morning Session Monday 20th May at 10am. A slightly shorter session with- AXA and National friendly speaking with us for an update on what they can do for advisers to ultimately help their clients.
The conversations around internal processes; new demands and needs letter, claims and underwriting were not captured on video for this session, but notes have been taken and feedback given to Product Heads at The Network..
If you missed it we have links to our recorded sessions which will earn you CPD time:
PMI Coffee Morning May Catch up.
Key Links:
Dedicated section for PMI advisers
PMI Adviser only Forum Hit ‘subscribe’ in the top right hand corner to keep up with all our latest topics.
Key Dates:
5th June
10:00-11:00 SME Product Training
11:00-12:00 Consumer Product Training
24th July
10:00-11:00 SME Product Training
11:00-12:00 Consumer Product Training
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Bipin Sandhu
PMI Supervision & Development Manager
The ABI records 3% home premiums rise in Q1
The average home insurance premiums for buildings and contents cover rose by 3% to £375 in the first quarter of this year, pushing the year-on-year rise up to 19%, according to the Association of British Insurers.
The quarterly increase was slightly less than the 4% recorded in the final three months of 2023. The trade body, which measures prices paid rather than quotes, calculated buildings-only cover rose 5% to £298 in the period while contents-only insurance remained static at £132.
ABI flagged the impact of severe weather winter damage arguing 2023 had the worst weather-related home insurance claims on record at £573m. Towards the end of the year, storms Babet, Ciaran and Debi caused £352 million of damage to homes, according to the ABI. It said that flooding is behind the biggest chunk of weather-related damage. As well as flood defences, Louise Clark, ABI’s policy adviser, general insurance, said: “There are other important steps we need to consider too, including reform of planning laws to prevent home-building on high flood-risk areas and a greater focus on climate-resilient properties.”
As advisers, it falls to you to stay updated and find the best solutions for you clients. See our latest news and earn your CPD.
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Amy Wilson
Head of General Insurance (PMI and GI)
