Robert Powell investigates how the odd cigarette could push down the price of your property...
Who would have thought that it was actually possible to huff, puff and blow a house in?
Yes, new research has injected some modern-day truth into the old fairy tale of the Three Little Pigs. Just replace the Big Bad Wolf with a huffing and puffing smoker...
Up in smoke
Britain’s property market has become the latest battleground for the war on smoking, according to Globrix.com. New figures from the property website show that the odd cigarette could be causing many people’s house prices to go up in smoke.
The study found that almost one-in-four home buyers (24%) would expect a discount on a property price if there was evidence of a smoker having previously lived there. Further to this, 8% of respondents to the Globrix.com survey said that they would not live in a property that had previously been occupied by a smoker.
So if you’re partial to the occasional cigarette inside your home, you could see a raft of buyers demanding lower prices when you come to sell up.
And these price problems don’t stop at home-owning smokers...
The new research also shows that 60% of landlords would not consider letting out a property to tenants that smoke, with half saying they would increase the rent for smokers. Factor in rising rents and high competition for rooms across the sector and it becomes obvious that being a smoker could make finding rental accommodation virtually impossible.
Indeed, it’s no surprise that 39% of smokers interviewed for the study said they would not tell a potential landlord if they were a smoker, while 22% admitted to having smoked inside a non-smoking home.
Tenancy law and smoking
As far as tenant and landlord rights go concerning smoking – like most rental issues, it’s all in the contract. Tenancy agreements will usually state whether the tenant is allowed to smoke or not.
However if the landlord forgets to include a specific ban on cigarettes, a tenant could still lose part or all of their deposit if they refuse to pay for damages caused by their smoking. The Globrix.com research shows that a third of landlords had taken this route and held back the deposit money of smoking tenants. Common home damage caused by cigarettes includes discoloured walls, smelly carpets and burns.
But even if a landlord does specifically allow smoking in their property, they can still force the tenant to pay for any damage caused by their habit by inserting a clause into the contract.
The rules also vary slightly for homes in multiple-occupancy that are rented on separate contracts. For example in the house I rented in the third year of university; smoking was only allowed in each tenant’s own bedroom when the door was shut and not in the communal areas of the property.
These stats from Globrix.com really show the strength of Britain’s current anti-smoking culture. Indeed according to the ONS, a huge 81% of Brits say that they fully support the 2007 smoking ban.
And it’s not surprising when you consider that a lower property price is far from the only impact that smoking has on our finances...
In addition to the obvious high cost to your health, the monetary price of cigarettes has rocketed over the past few years. Back in 2006, the average cost for a twenty pack of smokes was £4.62. It now stands at around £6.20.
So if you keep up a solid 20-a-day habit, you’ll be shelling out £189 every month. That’s £2,263 per year. Smoke for 10 years and you’ll have puffed away over £22,000 in cash. What a waste.
Smoking will also push up your life insurance rates. This is cover that pays out to your family (or any other beneficiary) when you die. Life insurance policies usually pay out a pre-designated set amount and are funded through the collection of regular premiums.
The level of these premiums will vary depending on the health of the person covered. If the insurer assesses you as a relatively healthy individual, your premiums will be lower – as the insurer will anticipate you living to an old age and hence paying out for a longer period of time before a claim is made.
However if your health is poor or you regularly do anything that could feasibly shorten your life – such as shark-diving, bomb-defusing or (you guessed it) smoking – you will pay out more in premiums.
Research from Sainsbury’s Finance shows that the average annual life insurance premium for a smoker is £209.76, while for a non-smoker this figures stands at just £113.88. That’s a massive difference of £95.88.
And what’s worse, the supermarket also estimates that 3.3 million ex-smokers in the UK are collectively paying £316m more a year than they need to, just because they haven’t informed their life insurer that they’ve quit.
But remember, the definition of a smoker in the insurance sector is fairly specific. Most life insurers will class you as a smoker if you take a single drag or use a nicotine patch once in the 12 months before taking out a policy.
Again, premiums for private health insurance are dictated by your wellbeing and health. If you look more likely to need treatment, you’ll pay more. So if you’re a smoker – you should expect higher premiums if you do take out health insurance.
The exception: annuities
And now for the exception; pension annuities.
Yes, if you take your pension pot to an annuity provider when you retire, you’ll get a higher monthly income rate if you’re a smoker than if you’re cigarette-free. This is because the company expects you to die sooner and so anticipates paying your annuity for a shorter period of time.
Many annuity providers will use the same 12 month smoking definition as life insurers. And you can use this to your advantage. To find out how read Admit it: you’re a smoker.
Would you buy or rent a property that a smoker had lived in? Did you give up the cigs for financial reasons?
Let us know using the comment box below.
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