Home insurance prices are being driven higher by government tax rises despite the mild winter keeping claim costs down, new research shows.
According to insurance market research experts Consumer Intelligence, average home insurance costs rose 2% – under the 2.7% rate of inflation rate – in the year to April to £121 and remained virtually unchanged in the past three months.
Over-50s householders are seeing above inflation increases of 3.6% to £117 compared with just 1% for under-50s to £124.
Consumer Intelligence warned that despite a relatively mild winter with low claims limiting price rises, Insurance Premium Tax increases will keep costs rising.
In the three months to April prices rose by just 0.2% and even fell for the under-50s.
Home insurance customers in the North East are experiencing the highest increases in premiums with average rises of 3.3% in the past year, while prices rose 3.2% in Yorkshire & Humberside.
Londoners pay the highest premiums at £144 while householders in the North West have seen prices rise by just 0.9% in the past year.
But there’s good news as home insurance costs are still 7.7% lower than in February 2014 when Consumer Intelligence first analysed data.
John Blevins, Consumer Intelligence pricing expert, said: “There has been little movement over the last quarter, and prices have remained fairly static.
“The benign weather has helped to keep premiums down, although it is worth noting that IPT rates have pushed premiums up by 2% in the last 12 months and we expect premiums to rise further in June when it increases to 12%.
“There is no indication that prices will come down and we expect another year of relative stability although new rules making insurers include last year’s premium with renewals may have some impact on new business rates.”
Average UK premiums and price rises
| Region | Change in year to April | Average premium |
| North East | +3.3% | £114 |
| Yorkshire & Humber | +3.2% | £125 |
| South West | +2.9% | £115 |
| South East | +2.4% | £123 |
| Eastern | +2.2% | £119 |
| Wales | +2.2% | £114 |
| London | +1.9% | £144 |
| East Midlands | +1.7% | £111 |
| West Midlands | +1.7% | £114 |
| Scotland | +1.6% | £122 |
| North West | +0.9% | £120 |
| Great Britain | +2.0% | £121 |
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