‘Average home insurance costs for UK households rise by 7%’
24 August 2017
Households' home insurance costs are increasing at an inflation-busting rate of 7%, according to analysis.
Average home insurance costs across Britain, including buildings and contents insurance, increased by 7% in the year to July to reach £131 annually, research from Consumer Intelligence found.
This is more than double the Consumer Price Index (CPI) rate of inflation at 2.6%.
Brexit, tax hikes, new extensions housing bathrooms and home owners doing a bodge job on their own plumbing are thought to be factors pushing up costs.
The 7% increase is the fastest seen in more than three years, since Consumer Intelligence started its research in February 2014.
Recent hikes to insurance premium tax (IPT) are helping to push costs upwards, the research suggested.
It also said Brexit is having an impact, with the weak pound driving up the cost of imported materials and increasing the cost of repairs.
Home owners' extensions are also contributing, with more claims for leaks from new bathrooms, Consumer Intelligence said.
Home insurance customers are still paying lower bills than in February 2014, when the average cost was £136, although Consumer Intelligence warned the market is turning.
John Blevins, Consumer Intelligence pricing expert, said: “It is likely we will see a slow and steady rise in prices in line with inflation and the value of the pound.
“Several insurers are reporting a rise in claims for burst pipes which is not being attributed to one single factor.
“The boom in extensions and people attempting to fix their own plumbing problems are two of these factors.”
The research involved comparing prices offered for 2,100 people by price comparison websites and direct insurers.
The five cheapest prices offered for each person were then compared with those offered the previous month.
Here is how average home insurance premiums increased in the year to July, with the average premium calculated from the five cheapest, according to Consumer Intelligence:
:: London, 9.2%, £159
:: Yorkshire and the Humber, 7%, £134
:: North West, 6.4%, £132
:: Scotland, 5.1%, £131
:: South East, 8.2%, £129
:: Eastern, 6.2%, £129
:: West Midlands, 6.2%, £128
:: North East, 8.2%, £123
:: East Midlands, 6.4%, £121
:: Wales, 7.1%, £118
:: South West, 6.4%, £116