With government and regulatory attention increasingly focused on the future of the mortgage market, one question is rising to the top of the agenda: how do we better support the first-time buyers of tomorrow? In recent years, we have seen welcome developments on the lending side, with the launch of high loan-to-value products, minimal deposits and underwriting consideration to assessment of rental payment history. Last year the FCA reminded lenders of the flexibility in its stress testing rules, which has boosted affordability by tens of thousands for a significant number of customers.
These developments are important steps in widening access to homeownership. Yet one crucial part of the picture remains under-explored: insurance and the role it can play in helping people prepare for their first step onto the property ladder.
Many advisers already frame their role as extending beyond arranging a mortgage. They see themselves as helping customers secure a home and, just as importantly, stay in it. A mortgage is a long-term commitment and life rarely unfolds as initially planned. Ill health, redundancy, fluctuating income or family change can all disrupt plans. Protection insurance – such as life insurance, income protection and critical illness cover – exists to provide a financial safety net against these risks. If we want to encourage long term sustainable growth in homeownership, then insurance needs to go hand in hand. Alignment needs to happen at every level, from adviser conversations with individual customers through to policymaking at the Financial Conduct Authority (FCA) and within government.
For decades, many in the insurance sector have tried to tackle the challenge of encouraging people who rent to recognise the value of protection products before they become homeowners. This has resulted in new products aimed at renters and attempts to build relationships with letting agents, as a lead generation source. However significant inroads into this segment of the market are yet to be made.
Take-up of protection among renters remains low compared with owner-occupiers (AMI Viewpoint 2025 research shows 12% of homeowners have critical illness cover versus 2% of renters and 10% of homeowners have income protection, compared to 5% of renters), suggesting this remains an underserved market. If we are to make progress, we may need to rethink not only the products we offer but how, when and by whom conversations about protection are started.
The timing for that rethink could not be better. First-time buyers are getting onto the property ladder later in life than previous generations, often after years of renting and saving. Average deposit sizes have grown substantially and many would-be buyers are having to put aside large proportions of their income to save, while simultaneously navigating a prolonged cost-of-living crisis. For this cohort, the financial stakes are higher than ever. If life “gets in the way” and derails someone’s homeownership plans, the short and long term consequences can be severe.
AMI’s own Protection Viewpoint research, which canvasses the views of 3,000 UK adults, provides reason to be optimistic around the appetite for protection amongst certain consumer segments. The research has consistently shown that younger generations are more engaged with protection than we may have first thought, particularly when it comes to income protection, with 17% of 18-34 year olds holding the product compared to 9% of 35-54 year olds. This is likely shaped by lived experience.
Younger adults have come of age during the pandemic, followed almost immediately by a sharp rise in living costs. At its heart, both crises have been about income and financial resilience – the fragility of earnings in the face of external shocks and the stress caused when household budgets are stretched to their limits. It is therefore no surprise that the narrative around income protection has shifted markedly over the past five years. But as an industry we must go further. For this reason, as part of its Calls to Action in the AMI Viewpoint 2025 report, AMI is committed to establishing a cross-sector working group to identify issues and opportunities in the rental market.
While rents may be stabilising in some areas of the UK at present, the introduction of the Renters Rights Act is likely to place further strain on the sector (major changes, including abolishing Section 21 ‘no-fault’ evictions and ending fixed-term tenancies in England, come into force on 1 May 2026). There is an expectation that given housing supply and demand challenges, these changes will place pressure on rents over time. For renters who already devote a significant share of their income to housing costs, even modest increases can tip budgets into precarious territory. These developments could therefore act as a catalyst for reshaping conversations around protection for the rental population. Rather than positioning insurance primarily as a tool for mortgage holders or families with dependants – an image often portrayed by protection marketing – the industry has an opportunity to help renters recognise the role of protection and value of advice.
Against this backdrop, the FCA’s ongoing work on mortgage rules and market reform takes on added significance. The Mortgage Rule Review is explicitly aimed at boosting homeownership. Lending innovation, such as alternative credit assessment and higher LTV products, is part of the answer. But resilience is another. Encouraging mortgage intermediary firms to proactively engage with people who rent, with a focus on protection, could open up wider and earlier conversations about buying a property and securing a mortgage. Whilst these discussions may not result in someone becoming an immediate first-time buyer, it should be seen as a way for advisers to cement relationships early in a person’s financial journey, positioning advisers as long-term partners. Protection, in this context, becomes a key element of being “mortgage ready”.
AMI’s Protection Viewpoint research also highlights the importance of ongoing customer engagement. Regulatory change has already shifted the advice landscape. Last year, the FCA removed the requirement for advice to be given on mortgages where there is interactive dialogue. Whilst intermediated lending remains dominant – IMLA’s latest market report estimates that a substantial majority of mortgages (87%) will still be intermediated in 2026 – the nature of adviser-client relationships is evolving.
In this environment, staying front and centre of customers’ minds requires more than a single point-of-sale interaction. Ongoing engagement strategies, built around regular touchpoints, are likely to be critical for intermediary firms.
There are also specific, practical touchpoints on the horizon that could help advisers broaden their engagement with renters around protection. One such opportunity arises from forthcoming changes to Minimum Energy Efficiency Standards for rental properties. Landlords are likely to need support from advisers to navigate the financial and practical implications. This presents a chance to initiate or deepen conversations about financial resilience of tenants more broadly. Advisers could help landlords understand the role of protection in safeguarding their own income streams and, by extension, the stability of their tenants. In some cases, these conversations may be educational; in others, they may lead to more structured arrangements.
Policy and public information also have a role to play. In England, it is a legal requirement for landlords to provide tenants with a copy of the government’s “How to Rent” guide. When it comes to insurance, the guide currently states: “consider obtaining insurance for your contents and belongings. The landlord will usually have insurance for the property but it will not cover anything that belongs to you.” While this is sensible guidance, it focuses solely on contents insurance and does not mention protection. In AMI’s view, this represents a missed opportunity.
Given that a significant proportion of renters spend a large share of their income on rent, the guide could usefully reference protection insurance – particularly income protection – as one of the options tenants may wish to consider. This is a change AMI will be lobbying for. Signposting protection in an existing, widely distributed government guide would be a low-cost, high-impact way of raising awareness. It would also align with the broader direction of travel in public policy.
The government’s Mayfield Review on keeping Britain working has highlighted the growing impact of health-related economic inactivity on the UK labour market and the need for shared responsibility between government, employers and individuals in addressing it. Protection insurance fits squarely within that framework.
For advisers, this means seeing renters not as distant prospects but as today’s clients and tomorrow’s potential homeowners. For insurers, it means continuing to evolve products to meet the needs of a changing workforce, particularly those with variable or non-traditional incomes and leveraging technology to deliver flexibility and relevance. For regulators and government, it means recognising the role that protection can play in boosting resilience and supporting sustainable homeownership, and reflecting that in guidance, policy frameworks and public information. If we can normalise conversations about protection earlier in people’s financial journeys, we will be helping to create more resilient homeowners of the future.
© 2026 Association of Mortgage Intermediaries Limited.
AMI is the trading name of The Association of Mortgage Intermediaries Limited which is a company limited by guarantee, registered in England and Wales under the Companies Acts with number 7982341. Our registered address is Celixir House, Stratford Business & Technology Park, Innovation Way, Banbury Road, Stratford-upon-Avon, Warwickshire, CV37 7GZ.
