Tax hikes and weak pound to drive up home insurance costs
Average annual premiums have been relatively stable in the past year increasing by 1.8% to £124, according to Consumer Intelligence.
But the research firm warns another hike to insurance premium tax (IPT) – due in June – will send prices soaring.
The government has increased IPT three times in the past 18 months with the most recent rise to 10% taking place in October. From June 2017, IPT will be 12%.
The data shows the October rise was one of the main contributors to premiums rising slightly over the past 12 months.
But the weakness of the pound since the EU Referendum is also contributing to more expensive premiums as higher building material costs are increasing the cost of repairs and premiums depending on which contractors insurers use.
However, despite the predicted price rises, home insurance costs are still 7.8% lower than in February 2014.
John Blevins, Consumer Intelligence pricing expert, said: “Competition for business remains intense, so shopping around remains important as there are plenty of insurers who want your business.”