Fast-forward a decade: what will “the home” be like in 2031?

Our relationships with our homes have changed beyond recognition over the last year.

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Louise Pengelly | Paymentshield
16th June 2021
Louise Pengelly Paymentshield
"Covid-19 has forced a transformation in how we use, enjoy and perceive our homes: from a recreational space towards an all-purpose location for socialising, relaxing, working – you name it."

Covid-19 has forced a transformation in how we use, enjoy and perceive our homes: from a recreational space towards an all-purpose location for socialising, relaxing, working – you name it.

This changing function has considerable implications for advisers, particularly when we consider the likelihood that parts of this change are here to stay. That’s why Paymentshield joined organisations such as Defaqto and Samaritans to support National Conversation Week which, this year, encouraged conversation about the altered relationships consumers now have with their homes, and what advisers need to be doing to ensure they provide clients with adequate protection.

How has the function of the home changed?

Covid-19 changed our world in many ways, and the way we live in our homes is one of them. No longer purely a space for relaxation and sleep, the home became our offices, our children’s schools and our main space for social interaction. In short, we became a nation of home birds.

As the function of the home changed, so too has our relationship with it. Other social impacts of Covid-19 have affected our homes, too. One positive result of British lockdowns is that the home improvements industry has boomed — we’ve got more disposable cash since our opportunities to spend have been reduced, and we want to make the spaces we live in enjoyable, considering we spend so much time there.

UK households saved an average of £300 on day-to-day expenses during lockdown and by and large, this money was reinvested back into the home – from significant indoor and outdoor renovations to the purchase of big-ticket items such as gym equipment and entertainment centres.

Certain purchases may require specialist cover, while homes with extensions that include additional bathrooms and bedrooms may now be under-insured; failing to update the insurer could result in a claim being reduced or declined. This presents an opportunity for advisers at both new business and renewal: namely, to proactively promote general insurance reviews at every contact.

What does the next 10 years hold?

Importantly, market predictions indicate that people envisage maintaining a focus on the home over the next decade.

Paymentshield asked over 2,000 British adults about their predictions on home use by 2031, and the results make for interesting reading for the insurance sector.

1 in 4 people (27%) think they will still be homeworking for one or more days per week up until 2031. This suggests there is a long-term shift from pre-2020 working practices, and will likely have considerable ramifications for home use. If a home is also a workplace for anything other than clerical work such as sending emails or taking calls, specialist insurance is likely to be needed.

Specialist insurance is particularly important if business stock or cash is held in the home, garage or any other outbuildings, and it’s worth bearing in mind that a policy may not be suitable if staff or business-related visitors come to the property.

The makeup of households could also see a change: 8% of people think they will live in a multi-generational household up until 2031, perhaps with grandparents cohabiting with the family. 12% think they will extend their home in this time period, for example by building a conservatory, extension or outbuilding. It’s therefore worth advisers highlighting to their clients that building a bathroom or bedroom and not declaring it to the insurer could reduce claims or invalidate a policy.

It also appears that there will be a huge shift towards sustainability and technology in the home, echoing trends throughout the world. A fifth (20%) of people we polled want to make eco-friendly changes to the home, such as installing solar panels, double-glazing, an air source heat pump, insulation and so on, with this raising to over a quarter (28%) among young people aged 18-34.

Tech in the home is also a key focus, with 18% thinking they will add devices to create a ‘smart home’ over the next decade.

And, as the British Government moves towards a target of manufacturing no new traditionally fueled cars, 18% think they will add an electrical vehicle charge point at home in the next 10 years – a suggestive shift from 2019, when EVs accounted for only 1 in 30 new cars sold.

What should advisers do?

All these changes present strategic opportunities for advisers to discuss GI, which could in turn lead to other opportunities in the protection or mortgage space if the client’s circumstances have changed.

Of course, it’s only possible to plan for the future to an extent – very few people envisaged the pandemic 15 months ago, never mind its scale or longevity. Remaining flexible and being able to adapt to customers’ changing needs will always be required of advisers, but perhaps renewed appreciation of the home appears not to be mere fancy but a welcome upshot of Covid-19.

By acting now, advisers can make sure they’re ahead of the game and offering their clients the right level of protection, both for now and in the future.

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