- Average annual premium increases 7% in a year to £131
- June and July saw biggest premium rises in three years
Home insurance premiums are rising at the fastest rate for three years as Government tax rises take effect, new analysis¹ from insurance market research experts Consumer Intelligence shows.
Average home insurance costs rose 7% — more than double the 2.6% rate of inflation for the economy as a whole — in the year to July to £131.
Prices are rising fastest for over-50s households who are seeing increases of 7.6% while owners of properties built after 2000 are paying lower premiums than customers with older homes.
Consumer Intelligence — whose data is used by the Government’s Office for National Statistics to calculate official inflation statistics — says average premiums in London are the highest at £159, which is 37% more expensive than the £116 in the South West of England.
Most of the increase is due to the rise in Insurance Premium Tax to 12% from 10% which took effect from June 1st, as well as the earlier rise in October last year.
But Brexit is having an impact with the weak pound driving up the cost of imported materials and increasing the cost of repairs. Homeowners building more extensions is also a contributing factor, with more claims occurring for leaks from new bathrooms.
Home insurance customers are still paying lower bills than in February 2014 although Consumer Intelligence warns the market is turning with June and July this year seeing record premium increases.
John Blevins, Consumer Intelligence pricing expert, said: “The home insurance market is very competitive so it is unlikely prices will rise as quickly as in the car insurance market unless bad weather claims increase.
“But 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 are two of these factors.”
The table below shows average premiums and price rises around Great Britain.
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Ends
Notes to Editors
¹The cheapest premiums were calculated by comparing the prices offered for 2,100 people by all the major Price Comparison Sites and key direct insurers. The top 5 prices for each person were compared to the previous month’s top 5, then these variations averaged to produce the index.
For further information, please contact:
Consumer Intelligence
Tom Flack
07731191543
Kevan Reilly / Jonathan Flint
Citigate Dewe Rogerson
020 7638 9571
About Consumer Intelligence
Consumer Intelligence conducts consumer surveys and benchmarks price and service performance providing unique insights into competitor pricing and customer experiences, their attitudes, opinions and behaviours. For more information, visit the web site www.consumerintelligence.com
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