Financial services body Consumer Intelligence found that the average cost of home insurance in the UK has risen by 6% in the past three months, although the Home Insurance Price Index also showed that prices have remained largely flat over a 12-month period.
The study also found that the average premium for buildings and content policies remained broadly unchanged over the past year at £148. However, there are indications that prices will start rising over the course of 2023, Consumer Intelligence said.
The highest insurance premiums are still being paid by Londoners, at £206, for building and contents policies. Conversely, the North East is the cheapest region with payors averaging premiums of £117.
“We’re getting a sense that insurers will need to keep pace with inflation as we head further into 2023,” Consumer Intelligence senior insight analyst Georgia Day said.
“The rivalry between the dominant players, as well as the emergence of challenger brands, has kept prices highly competitive in the home insurance market, but we’re beginning to see prices head upwards to meet the demands of inflation,” she said. “It also seems the home insurance market is finally following suit with the motor market, which has observed consistently higher prices throughout the whole of 2022.”
Broadly speaking, premiums have risen by 2.7% since Consumer Intelligence first started collecting data in February 2014. Day said that healthy competition in the home insurance market has historically tended to keep prices in check.
Londoners are now paying almost a third more than the overall UK average to insure their property and contents. The research also found that the households in the South East and Wales are paying more than the UK average of £148 at £159 and £152, respectively.
London homeowners have also seen the biggest annual increases to their premiums at 3.9%. Other regions that recorded annual increases include the South East at 1.7%, the North East at 0.9%, and the East Midlands at 0.6%.
All regions saw increases in the past three months, with London seeing the biggest rise at 7.4%, followed by the South East at 7.1% and the West Midlands at 6.5%.
Older households were found to be paying slightly less for their home insurance with the average bill for over-50s at £141 compared to the £153 being paid by under-50s. Price changes in the past 12 months were marginal for both age groups, as the over-50s saw a rise of 0.8% and the under-50s a fall of 0.7%.
Older properties continue to attract the highest premiums, with Victorian-era homes built between 1850 and 1895 seeing average annual bills of £185 for joint home and contents policies. For buildings built between 1950 and 1975, the cost of insuring a property was £141. Homes built since the start of this century, on the other hand, cost £142 to insure.
Premium prices have dropped by 4.9% in the past 12 months for houses constructed between 1910 and 1925. This contrasts with properties built after 2000, which saw a 1.9% rise in premiums. That said, all property age groups have experienced premium increases in the past three months. The 1895 to 1910 bracket saw the biggest rise at 7.4%, while the 1925 to 1940 range experienced highs of 6.9%.
The rise of home premiums in the UK for the past three months tells a different story to that in 2022, when the costs broke a record as being the lowest since the Association of British Insurers (ABI) began collecting price data in 2012.
What are your thoughts on this story? Please feel free to share your comments below.
