Are micro homes the future of property?

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What is a micro home?
A ‘micro home’ doesn’t have a strict definition, but is broadly classed as a home with a floor area under 37sqm, which is also the minimum size for a studio.

Micro homes are typically in prominent locations and often have communal areas inside and outside. The newer homes are usually well designed and have features such as air ventilation and good sound insulation.

How common are they?
There are high numbers of micro homes in major cities such as London, Leicester, Liverpool, Cambridge and Bristol. Demand for cheap housing in urban areas along with rising house prices has driven up the supply of these small establishments.

Micro homes are great for a cheaper alternative to regular sized properties, coming in at an average of £279,000 in London, which is less than half the average price of London homes sold in 2016. This shows they are a cheaper method of getting on to the property ladder, but buyers should also consider whether they will be a good investment and if they will be happy living in such a small space.

Who are micro homes built for?
As micro homes tend to be cheaper, close to cities and small, they are mainly bought by first time buyers and young professionals. However, they are often advertised to investors who benefit from capital growth and rental income.

How easy is it to get a mortgage on a micro home?
It is a common misconception that micro homes are extremely hard to mortgage. While they may be trickier to agree a mortgage on, some lenders will consider this type of property (subject to valuers comments). The likes of Santander, Nationwide and Halifax do not have minimum requirements for the square metre size of a property to make it eligible for a mortgage.

If you would like some more advice on the prospect of buying a micro home then speak to our adviser today

Are you Covered for Mental Health?

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Critical Illness Cover and Life Insurance are vital to ensure you and your family are covered against worst case scenarios. But what about the most common scenarios?

This is where income protection* comes in. It normally pays up to 60% of your income and protects against long term absence. It serves as daily peace of mind should you need time off work, you won’t have the added stress of worrying about covering the bills.

How common is absence for mental health?
According to ECIS data, absences for mental health are as common as absences for colds and bugs. This makes mental health now one of the top three reasons for employee absence, with musculoskeletal conditions and general sickness.

The problem doesn’t look like it’s going away anytime soon either, with a recent NHS report showing that nearly a third of ‘fit for work’ notes issued by GPs are for psychiatric problems. This has now made it the most common reason for ‘fit for work’ notes to be issued, ahead of musculoskeletal diseases.

How can I cover myself?
Fortunately, most income protection providers pay out for absence for mental health, which unless you have budget income protection, will pay out for every occasion you are absent from work after the deferred period has elapsed.

It is also important to ensure that should you be off for mental health problems, you don’t have the added stress and anxiety of not working and not being paid. This can exacerbate the problem itself and extend your absence. What if I already have

What if I already have cover?
We recommend a good protection menu plan that covers all the scenarios that might make you vulnerable to financial shocks. Serious illness and injury are all too common reasons to be absent long term from work, which will not be covered by Life and Critical Illness cover.

Right now, absences from work for mental health are becoming more long term, with one in five psychiatric ‘fit for work’ notes issued for periods of over 12 weeks. This means that your employer being able to cover you during the period of absence becomes less likely, which makes income protection even more important.

*Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income.

We can work with you through your budget to ensure you have the most comprehensive cover possible, to protect against both worst case and common scenarios. Contact us today to arrange a meeting.

3 Reasons to Take Your Policy Out of the Drawer

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The whole point of protection is to deliver peace of mind, with the knowledge that you and your loved ones are financially covered should the worst happen. So it is understandable to pop it in the proverbial desk drawer and forget about it. After all, it’s nice to know you are covered.

But as your adviser, we don’t want you to either miss out, or get caught out, by not checking your policy. It is important to understand what you are covered for and that it is still matching you and your needs.

Reason 1: Your life has changed
Time flies, so your circumstances can change quickly through life events such as having children, buying a house or changing jobs. What was the right cover before, could now be falling short of that comprehensive protection plan. As an adviser, we see people’s lives change dramatically from one meeting to another.

It’s easy to assume you are already “covered”, because you have some protection. But it is important to always ask yourself what would happen in the event of a serious illness or the unfortunate death of a breadwinner. Would your loved ones have a steady income to rely on and pay the bills? Even a stay-at-home spouse has financial value worth protecting, especially if they are looking after children.

Ask yourself: Do I have fewer or more dependents than before? Do I need to update beneficiaries on my life policy? Are there any options I can add onto my policy? Do I need to increase my coverage?

Reason 2: Matching your budget with your cover
We can help you check whether your budget could now cover more protection. If you can afford to build on your existing cover, it is economical to purchase protection when you are young, as premiums are generally lower for the same level of protection.

Reviewing protection doesn’t always have to mean increasing the costs, as your circumstances may now mean a more cost effective option for your policy. You may also consider whether your policy has been written into trust, which can prevent the policy forming part of your estate and being liable for Inheritance Tax.

Reason 3: Ensure you know about the extras
Royal London’s Helping Hand, Aviva’s Best Doctors Global Treatment and LV’s Doctors services are just three examples of the additional support your policy could deliver. Some of the support is also available throughout the term of the policy, so you may not even need to claim.

Some providers such as AIG, Scottish Widows, Royal London and Zurich are already delivering annual statements to policyholders. This will ensure you are aware of the policy details and the current extras and benefits that are offered.

Still not covered yet?
It is never too late to get protection. We can discuss a variety of options and create an effective menu plan to fit your needs and circumstances directly.