Tax changes increasing home insurance costs
Home insurance prices across the UK are increasing due to government tax rises, according to new figures. On average, home insurance costs increased by two per cent during the 12 months to April, standing at £121, says the research from Consumer Intelligence.
These figures have remained largely unchanged over the last three months following this increase. However, they are rising fastest for those aged over 50, with home insurance rocketing by 3.6 per cent - well above the 2.7 per cent rate of inflation - to £117. Householders aged under 50, in comparison, have only seen a one per cent increase taking prices to £124.
Despite the reasonably mild weather throughout the winter resulting in low claims for storm damage and limiting some home insurance price increases, the Insurance Premium Tax increase in October saw costs rise. With another one due in June, meaning the tax rate will stand at 12 per cent, is likely to put up insurance prices further, which will impact landlords' costs.
According to the figures, the highest rises are being seen by customers in the North East, where premiums increased, on average, by around 3.3 per cent over the last year. Yorkshire and Humberside also saw a sharp spike in insurance costs, with prices going up by 3.2 per cent.
Perhaps unsurprisingly, the highest premiums are paid by those in London, with the average being £144. In comparison, those in the North West have seen prices rise in the last 12 months by just 0.9 per cent.
Despite the sharp price growth, the overall costs of home insurance is 7.7 per cent lower than in February 2014, which is when Consumer Intelligence released its first analysis.
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 two per cent in the last 12 months and we expect premiums to rise further in June when it increases to 12 per cent."
Landlords should compare property insurance options to ensure they keep prices as low as possible while still offering good levels of cover.