The initial stamp duty holiday led to a boom in UK housing market activity, and the extension announced in Budget 2021 looks set to continue the trend further. While 2021 will undoubtedly be a challenging year for insurers, as COVID-19 will continue to impact the claims landscape and new business opportunities, the Spring Budget will create opportunities for insurers to generate growth in gross written premiums in the protection insurance market into 2021, says GlobalData, a leading data and analytics company.

Insights from GlobalData’s 2020 UK Insurance Consumer Survey indicate that the most common trigger for purchasing an income protection insurance policy was buying, moving or remortgaging a property, with 22% of policyholders stating this as the triggering event. This creates an opportunity for the insurance industry to grow the income protection market further over the coming months as housing activity increases.

Daniel Pearce, Insurance Analyst at GlobalData, comments: “The Spring Budget also included announcements aimed at getting more people onto the housing ladder. The 5% mortgage deposit scheme will help bridge the gap in individuals’ finances and allow them to move away from the rental market. GlobalData’s findings indicate that the leading reason individuals find themselves renting a property is because they are unable to save for a deposit, with 28% of survey respondents stating this.

“However, while the government scheme will provide a further boost to housing market growth, it will not allow all individuals in the rental market to access the housing market. GlobalData’s survey found that 34% of respondents identified non-financial reasons, such as the ability to move quickly due to work and being new to the area, as the cause of them not purchasing a house.”