Aviva home series Safe and secure - Aviva Broker - Home · Aviva data obtained as part of the ‘Home: Changing Households’ report in May 2016. All figures based on a nationally

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Aviva home series

Safe and secure?

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Foreword Key findings Contents Key considerations

Keenness to get on the ladder

Location, Location, Location

Safe and Secure?

Got it covered? Conclusion Methodology &

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ForewordHomeownership is still an extremely hot topic for UK residents and a goal for most of the population.

In our last Home report in May 2016, we found that four out five UK adults said homeownership was important to them, and three quarters of people aged 18-24 believed it was only likely to become more important in years to come.

But we also know that getting on the property ladder can be a challenge, particularly for younger people. Against a backdrop of rising house prices and a requirement for sizable deposits, many are facing difficult choices when it comes to buying a property. The ‘ideal’ home is sometimes replaced with what people can afford in order to get on the first rung or move up the ladder.

In this report we investigate what people are looking for in a home at different points in their lives, and also what this means in terms of protecting their properties and their possessions.

We find that younger homeowners and aspiring buyers are more willing to buy homes in locations with higher crime rates and even with higher flood risks – which makes the matter of home protection more pertinent than ever.

Our research shows that most residents are taking steps to make their homes safe and secure – but more than a quarter take at least five months to put precautions in place.

We also find that a significant number of people don’t have home contents cover in place. This is a concern given the practical support and the emotional comfort home insurance can offer if the worst does happen.

The old adage goes that a home is one’s castle, so we’re keen find out what people want from their properties, and the security steps they are (and aren’t) taking.

The more we know, the more we can do to help people protect their homes and the important belongings within them.

Lindsey Rix

Managing Director, Personal LinesAviva UK General Insurance




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Key findingsYounger people are more likely to buy a home regardless of safety, flood or crime risks, with price and affordability having the biggest influence on their decisions.

• Around a third of would-be home buyers aged 34 and under would buy a home in a high crime area, compared to fewer than one in five across all age groups.

• Similarly, 44% of prospective homeowners aged 18-24 would consider living in a flood-risk area, compared to 23% across all age groups.

• Encouragingly, younger residents are more likely to make changes to their homes in order to make them safer. Nearly half of under 25s (46%) had made ‘significant’ changes to their current properties, and 26% of those aged 25-34 had done the same. This compares to just 17% of over 55s.

• However, younger people are less likely to have home insurance, potentially putting their homes and belongings at risk. While 93% of over 55s have home contents cover, this falls to just 57% for under 25s.

17%

34%

Would you buy a home in a high crime area?

26%

17%

46%

Did you make significant changes to your current home to improve safety?

23%

44%

Would you consider living in a flood-risk area?

57%

93%

Do you have home contents cover?

Key18-2425-3434 and underOver 55sAll age groups




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People most commonly spend less than 30 minutes researching the safety of a local area when looking for a property.

30 minutes

Government research shows that the average age of a first-time buyer has risen from 30 to 33 over the last 20 years1.

30 to 33 FOR SALE

Separate analysis from Aviva reveals that one in four (27%) non-homeowners believe they will never be in a position to buy a property.

1 in 4

English Housing Survey First Time Buyers and Potential Home Owners Report, 2014-15 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/539256/First_Time_Buyers_and_Potential_Home_Owners_Report.pdf




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ContentsKey considerations when choosing a home Page 6 What do people consider and how long do they spend researching their properties and locations?

Keenness to get on the ladder Page 8 How willing are people to buy, in spite of problems with homes or a location being less than ideal?

Location, location, location Page 10 What amenities do people look for when buying a home and how does this change at different life stages?

Safe and secure Page 12 What security measures do people take when they have bought a home? How long does it take them to make these changes?

Got it covered? Page 14 What types of home insurance do people hold? And what does Aviva data tell us about the types of claims people make?

Conclusion Page 17

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/539256/First_Time_Buyers_and_Potential_Home_Owners_Report.pdf




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Key considerations when choosing a homeBuying a property is probably the biggest investment that most people in the UK will ever make, and it’s not something that they undertake lightly.

Aviva research suggests that people will take four years and four months1 on average to save enough for a deposit for their first home. In some parts of the country such as London and the South East, this could mean saving up several hundreds of pounds a month.

Somewhat predictably, price/affordability is the most popular consideration of home buyers when purchasing a home, with almost three quarters (73%) saying this is a vital concern. This is followed by the condition of the property, a consideration of 49% of buyers, and safety/low crime rates in the local area (22%).

49%

22%

73%

What is your biggest consideration when buying a new home?

KeyPrice/AffordabilityCondition of propertySafety/Low crime rates

Aviva data obtained as part of the ‘Home: Changing Households’ report in May 2016. All figures based on a nationally representative survey of 2,000 UK adults aged 16 and over, carried out by Censuswide Research.




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However, while affordability and condition elicit roughly the same level of interest throughout people’s lives, views about crime rates tell a different story.

Between ages 18-34, low crime rates don’t appear to be a major consideration when choosing a location, with only 17% of people citing this as a concern to them. However, this rises steadily as people grow older to 25% of people in the 55+ age group.

This may suggest that younger people are more blasé about crime rates, but could also indicate that those under 35 are in less of a position to choose their ‘ideal’ location and may settle for an area with homes which they can afford.

And while safety of the local area is on people’s radars, the amount of time spent researching this point is relatively low compared to other factors.

SEPTEMBER

Looking for properties to view, e.g. online, in estate agents etc

2 months

Researching the safety/ crime rates of local areas

> 30 mins

Researching the average cost of a home in various areas

90 minutes

Researching what’s in the local area, e.g. amenities, schools, transport links etc

4 hours0

5

10

15

20

25

55+45-5435-4425-3418-24

17% 17%

22%

24%25%

Yes, crime rates are a major consideration when buying a new home.

This idea is explored in more detail on page 8.




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Keenness to get on the ladder (or climb the next rung)Homeownership is a goal for the vast majority of the population. Even though 27% of non-home owners say they don’t believe they’ll ever own a property1, it’s still an aim for four out of five adults in the UK.

So perhaps it’s not surprising that many people turn a blind eye to a home’s faults in their eagerness to become homeowners or take a step up the ladder.

Younger people are more likely to settle for a home in a location that has a few cons to balance out the pros. Affordability is the biggest factor which affects where and what they buy, so when it comes to safety, flood or crime risks, there is often a bit of ‘wriggle room’ within their decisions.

Around a third of would-be home buyers aged 34 and under say they would buy a home in a high crime area (34% for both 18-24s and 25-34s). This is in marked contrast to those aged 55 and above – only 7% would consider buying a home in a high crime area, and even across all age groups, only 19% would do the same.

Even more surprisingly, almost half of people (44%) aged 18-24 would actually consider living in a flood-risk area, compared to 23% across all age groups, and only 8% of those aged 55 and above.

7%

19%

34%

Would you buy a home in a high crime area?

23%

8%

44%

Would you consider living in a flood-risk area?

Key18-2418-34Over 55sAll age groups




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There is encouraging news when it comes to home security and younger age groups, as a large number have taken steps to make their homes safer.

Four out of five residents (80%) aged 18-24 said they had made security/safety changes to their current properties, including 46% who said their changes were ‘significant’. More than two thirds (68%) of those aged 25-34 said the same, although the proportion of ‘significant’ changes was lower at 26%. Just 17% of people aged 55+ said they had made significant changes of this nature.

In spite of their shrewd attitude to security, younger people are more likely to take a gamble when it comes to home insurance. While 93% of over 55s have home contents cover, this falls to just 57% for people aged 18-24, potentially putting their belongings at risk.

26%

17%

46%

Have you made significant security/safety improvements to your home?

57%

93%

Do you have home contents cover?

Key18-2425-34Over 55s

Aviva data obtained as part of the ‘Home: Changing Households’ report in May 2016. All figures based on a nationally representative survey of 2,000 UK adults aged 16 and over, carried out by Censuswide Research.




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Location, Location, Location Amenable amenitiesWhen it comes to local amenities, people have different priorities at different points in their lives. A location with vibrant night-life may be a selling point for some, but a complete turn-off for others.

Some amenities remain desirable throughout different life stages, such as public transport links, doctors’ surgeries and – perhaps more surprisingly – parking facilities. However, other facilities are more relevant at certain points and quickly fall out of favour when their shelf-life has passed. Local schools are the first priority for people in the 25-34 and 35-44 age groups, appealing to 43% and 46% of these age groups respectively. However, there is a steep drop for people aged 45-54, with local schools being of interest to only 21% of this age group.

The 18-24 age bracket is the only group to include restaurants and takeaways in their top five list of appealing amenities, a choice for 25% of respondents. Pubs and night clubs also nearly made it into the top five for this age group, with 19% saying they were something they would look for when choosing a home.

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46%

21%

43%

Are local schools a priority when choosing a new home?

Key25-3435-4445-54

0

5

10

15

20

25

Pubs and nightclubs

Restaurants and Takeaways

25%

19%

These local amenities are important to 18-24 year olds when buying a new home.




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The following table details the most wanted facilities when looking for a new home at different ages (based on top three choices).

Across all age groups, good road links are a further selling point for 24% of the population, although only one in 10 people would look for a home near to a local library. Less popular choices also included upscale supermarkets (9%) and coffee shops (6%).

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Priority All ages 18-24 25-34 35-44 45-54 55+

1Public transport links

Public transport links Local schools Local schools

Doctor’s surgery/ health centre

Doctor’s surgery/ health centre

46% 50% 43% 46% 48% 51%

2Doctor’s surgery / health centre

Budget supermarket

Public transport links




45% 45% 40% 42% 47% 48%

3Parking facilities Doctor’s surgery/

health centreBudget supermarket Parking facilities Parking facilities Parking facilities

35% 41% 38% 32% 39% 44%

4Budget supermarket Local schools Doctor’s surgery/

health centre Parks/play areas Rural areas/ green spaces

Rural areas/ green spaces

34% 25% 36% 31% 38% 39%

5Rural areas/ green spaces

Restaurants/ takeaways Parking facilities Budget

supermarketBudget supermarket

Budget supermarket

31% 24% 30% 30% 30% 32%




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Safe and Secure?There’s every chance that when people move into a ‘new’ home they will need – or at the very least want – to make some changes to improve the security and safety of their home.

Across all age groups, two thirds (65%) of UK residents say that they made changes to their current home when they moved in, to ensure that their property was safe and secure. Within this figure, 45% report that they needed to make ‘some‘ changes, while a further 20% say their changes were significant.

A small but worrying proportion (3%) admit that they know they need to make changes but ‘haven’t got around to it yet’.

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0 10 20 30 40 50 60 70

Surveillancecameras

Gate(s)

Strong fence(s)

Alarm system

Smoke alarm(s)

Lock(s)(doors or windows)

70%

56%

41%

39%

35%

10%

Changes made when people move into new homes

20%

45%

What level of security improvements did your home require when you moved in?

KeySomeSignificant




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While it is encouraging to see that almost two thirds of homeowners are making their properties more safe and secure through a variety of security measures, these changes don’t always happen immediately.

The most common time frame for putting security and safety measures in place after moving home is one to three weeks (28%). However, 8% took between 5-8 months and 14% took between 9-12 months leaving a significant window of vulnerability to crime. A leisurely 6% said they took more than a year to make their changes.

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23%

6%

28%

How quickly did you make security improvements after moving into your new home?

KeyOne to three weeksFive to 12 monthsMore than a year

It’s great to see that people are taking steps to make their homes more secure, but a worry that in many instances this can take several months. There are a wealth of devices on the market that can be installed in a matter of minutes by residents themselves. Many of these devices also connect to phones – from security cameras to smoke alarms, to leak detection systems – so even when people are out and about, they can have peace of mind knowing they are still keeping an eye on their homes.

Stephen Pond Managing Director, Prevention & Services

Aviva UK General Insurance

“”




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Got it covered?When it comes to insuring their homes, Aviva’s research shows that almost nine out of ten homeowners say they have some type of cover in place.

Buildings insurance (88%) and home contents insurance (86%) are by far the most popular types of cover that people hold, although it seems that older people are much more concerned about protecting their possessions than younger homeowners.

Slightly more than half (52%) of homeowners also say they have accidental damage cover – which can provide cover against accidents such as dropping a TV or spilling paint on carpet – as part of their home contents insurance. Similarly 44% of homeowners say they have personal belongings cover, which insures items when taken out of the home, such as jewellery or watches.

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0

20

40

60

80

100

55+45-5535-4425-34Under 25

57%

69%

84%91%

93%

Proportion of people who have home contents cover

86%

88%

Do you have any type of insurance cover for your home and belongings?

44%

52%

Do you have any additional insurance cover for your home and belongings?

KeyBuildings insuranceContents insurance

KeyAccidental damage coverPersonal belongings cover




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The claims calendar Home insurance provides cover for all manner of unexpected events, although Aviva internal data shows that certain types of claims tend to ‘spike’ at different times of the year, suggesting that some events may be less unexpected than others.

While some of these spikes may seem obvious – such as claims due to frozen pipes in winter and subsidence claims in hot, dry summers, other clusters of claims are more surprising:

Accidental damage

Looking at home claims data from 2007 onwards, there is an interesting correlation between claims and school holidays with visible peaks in January, March, May, August and October over a number of years. It is possible that having more people at home during the day increases the risk of accidental damage – particularly if there are children around!

Water damage

Similarly, there appears to be an increase in claims for ‘escapes of water’ during summer holiday periods. This could in part be due to children leaving taps running or similar misadventures. It could also be possible that because people are often away on holiday in summer months, leaks aren’t captured and stopped immediately, which can lead to damage and the need to make a claim.

Storm and flood damage

While December 2015 and January 2016 will be remembered for some of the most shocking floods in recent history, the British weather is an unpredictable beast and storms and floods are by no means limited to winter time. Aviva data shows peaks of flood claims from customers in June 2012 and June and July 2007, while there were also notable spikes for storm claims in March 2008, July 2009 and June 2012.

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Fire damage

The weather also takes responsibility for some surprising fire claims which show spikes in July for each of the years 2013, 2014, and 2015. Immediate thoughts might turn to barbecue disasters, but the majority of claims were actually due to lightning strikes to aerials and phone lines taking out TVs, routers, PCs, and junction boxes etc. The next highest cause of claim was for garden fires getting out of hand, followed by kitchen / appliance fires.

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Our claims data also makes fascinating reading as it shows that while there are some seasonal trends to be expected, there are also plenty of surprises in store. Homeowners can never be sure what’s around the corner, so by getting the right level and the right type of cover for their needs, people can be prepared for whatever might happen in their homes.

Simon WarsopChief Underwriting Officer,


“”




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Lindsey Rix

ConclusionHome insurance tends to be something people think about when things go wrong. Every day at Aviva we deal with a huge variety of home insurance claims: everything from red wine spilled on a sofa to major incidents such as fires and floods. We’re there to help customers pick up the pieces and put their homes back together.

But this is only part of the story. We also know all too well the hidden story behind claims. We understand just how traumatic it can be for customers when something goes wrong in their homes and the emotional impact as their lives are disrupted.

Fixing a problem when it occurs is one thing and we’ll continue to help our customers at their hours of need. But as the old saying goes, prevention is better than the cure, and we’re constantly looking at ways to help our customers prevent problems before they happen.

It’s great to see that most homeowners have home insurance, but a concern that younger people more likely to take a gamble and not take out cover – particularly as they are more likely to buy homes in areas at risk of crime or flooding.

Like most types of insurance, home cover is something people never want to claim on. But when things do go wrong, the relief of knowing that you are covered, and that there is someone there to help, is something that can’t be put into words.

Lindsey RixManaging Director, Personal Lines





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Methodology and media relationsUnless stated otherwise, all figures are taken from a poll of 2,001 UK adults from across the UK, including homeowners and people currently looking to buy a property. The research was carried out by Censuswide Research on behalf of Aviva in August 2016.

If you are a journalist and would like further information, please contact:

Sarah Poulter Aviva Press Office

01904 452828 07800 691569

[email protected]

Documents

Aviva home series Safe and secure - Aviva Broker - Home · Aviva data obtained as part of the ‘Home: Changing Households’ report in May 2016. All figures based on a nationally