The property market remains exceptionally busy, making it all the harder for brokers to ensure that purchasers do not forget about protection in their rush to buy.

June saw thousands of buyers clambering to complete trans-actions before the tapering of the stamp duty holiday until the end of September. Given the limited number of homes available, demand for property is expected to remain strong for the foreseeable future.

With many advisers still dealing with an avalanche of mortgage enquiries, it’s not hard to see how protection sometimes ends up on the back burner. However, there are important reasons to ensure that this doesn’t happen, not only from a business perspective but also because customers must be made aware of the need for financial resilience — albeit the pandemic has served to do just that.

Different mortgage customers will have different needs but a busy mortgage market will only highlight those requirements, whether they are a buyer or an existing homeowner.

First-time buyers

Typically young and financially stretched, first-time buyers (FTB) are likely never to have considered cover but are often in the best position to lock it in at a competitive price due to their age. Affordability may be tight, but this should reinforce the need for cover. Buyers must consider how they would continue to make monthly payments if they were to fall ill or lose their income or, if buying with someone else, how the mortgage would be paid in the event of either owner’s death.

If FTBs don’t take protection when they first take out a mortgage, the chances of them thinking about it again before they need to remortgage are slim. With five-year fixed rates particularly popular, it may be a long time before they think to revisit this need.

Homemovers

According to the Financial Conduct Authority, nearly half of all mortgage lending made in the first three months of this year went to homemovers, the highest share since records began.

The pandemic has inspired many to move to gain more outside living space or a home office, or to be nearer their family, especially as they may no longer be tied to a workplace. Many movers will take out a bigger mortgage and, although they may have some cover in place already, the adviser should ensure that this matches their new mortgage. Their circumstances may have changed since they first bought, emphasising the need to review their cover. For example, they could now have a family, or be working for themselves rather than an employer, and so need additional protection.

Downsizers too should review their protection needs. If a customer’s mortgage debt is reduced as a result of their move and their lifestyle costs are lower, they may be paying for more cover than they need.

Future homeowners

Protection isn’t just for new purchasers or homeowners. Those who are saving to buy a home in future may also want to think about cover options, especially as they will usually be reliant on their ability to work and earn to maintain their rent and lifestyle.

Income protection aimed at renters is increasingly available, with options to increase cover either linked to rising rent or transitioning to mortgages to ensure that customers remain financially resilient as their circumstances change.

Remortgages

Remortgage customers won’t necessarily have taken out cover before, so it’s always important to review their protection needs. Many deals will mature this year, providing a good opportunity to revisit protection requirements, whether customers need to take cover for the first time or consider an enhancement to an existing policy, especially if they are borrowing additional funds.

Downsizers too should review their protection needs

Whatever your customers’ circumstances, addressing their protection needs alongside their mortgage means these can be dealt with simultaneously. It also means, even if there are delays in processing the protection application, cover is likelier to be in place when needed.

Although there have been considerable improvements to straight-through processing and the advent of ‘Buy now’ life cover, the pandemic has meant tighter underwriting criteria for many providers and delayed medical reports in some cases. If an application needs more underwriting, the sooner it begins the better.

Most importantly, advisers shouldn’t let the protection message slip, irrespective of how busy the market is, at a time when the need for cover has rarely been so evident to customers.

David Hollingworth is associate director of communications at London & Country