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Market competition is ‘keeping home insurance prices in check’

Average bills for home insurance are up just 2.1% in a year, with a competitive marketplace keeping up with the UK’s inflation rate, according to data from analytics expert Consumer Intelligence.

Average premiums have fallen just 1% since February 2014, when Consumer Intelligence first started collecting data. Despite the 2.1% rise in premiums over the last 12 months, prices have yet to trend higher than the first recording five years ago.

Across the market, the average home insurance premium sits at £136. For the over-50s age group, premiums rose by a steeper rate of 2.7% over the same period, averaging £143 per premium. Meanwhile, price rise for the under-50s were limited to just 1.5% (£129).

Regionally, Londoners pay a large premium for their home insurance at £187 – almost 60% more than those in the North East (£119) and 25% more than those in the South East (£140).

Wales was the only region in the UK to see home insurance premiums fall in the last 12 months (-0.3%). The South East (4.1%) saw the biggest rise over the same period, with the Eastern region (3.4%) and the West Midlands (3%) following closely behind.

The analysis found that properties from the Victorian era (erected before 1895) continue to carry the highest annual premiums in the market at £162. Insurance policies attached to houses built between 1895 and 1910 came next at £146.

Properties built between 1985 and 2000 are now the cheapest to secure home insurance against (£126), with those built after 2000 attracting premiums of £133.

Meanwhile, properties erected between 1925 and 1940 have seen the highest increase to their premiums of any age group, at 2.9%, in the last 12 months.

“Home insurance is a very competitive marketplace, helping to keep overall pricing down,” says John Blevins, pricing expert at Consumer Intelligence.

“London unsurprisingly maintains its number one spot with some of the most expensive properties in the UK and the biggest urban area – with cities generally having a much higher crime rate.”

He adds: “Regional pricing is based on localised claims experience – looking at general perils such as fire, accidental damage but also specific areas such as crime rates, weather events and subsidence.”

“And with subsidence claims levels reaching a peak this year, areas where the weather tends to be dryer – such as the South East – have seen higher rates of subsidence.”

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