Home insurance premiums set to soar in 2017
The price of home insurance remained largely flat in the last year but premiums are expected to increase dramatically in 2017.
Research by Consumer Intelligence shows that the typical home insurance premium grew by 1.8% in the year to January 2017, with the average annual premium in Great Britain costing £124.
On a regional basis, the East of England saw prices grow by 4.3% in the last year – faster than anywhere else - to reach £122. In London, premiums fell by 0.9% but remain higher than the rest of Great Britain with an average annual cost of £147 in the capital.
The firm attributes any rises to the insurance premium tax (IPT) increase which took place in October, plus the impact of the weak pound.
But a further tax increase is planned for June 2017 and this will push prices up further, the firm says. As recently as October 2015, insurance premium tax was charged at a rate of 6% but this will have doubled by this summer when it will rise to 12%.
John Blevins, Consumer Intelligence pricing expert, says: “The rise in home insurance costs over the past year may just be the beginning once the impact of the weak pound and the next Insurance Premium Tax rise kick in.
“The impact of sterling’s post Brexit slide will feed through from increased costs for building materials and equipment increasing the cost of claims which are the biggest influence on premiums.
“However the impact will vary from insurer to insurer depending on the contractors they use. Competition for business remains intense, so shopping around remains important as there are plenty of insurers who want your business.”