Home insurance premiums reached an all-time high this year but a rise of just 4% in July 2023 could signal a “return to normalisation”, finds Pearson Ham Group

• Home insurance premiums rose by 26% in the last 12 months but the monthly increase of 4% in July 2023 signals the potential for less severe increases in pricing ahead.
• Nationally, properties in London saw the largest home insurance premium increase at 4.7% in July 2023, resulting in a rise of 28% over the last 12 months.

Pearson Ham Group has found that prices for combined buildings and contents home insurance increased by 4% in July 2023. The monthly analysis signals a likely slowing in the rate of increase for home insurance premiums going forward, after the proliferation in pricing over the last 12 months.

The culmination of home insurance price increases over the 12 month period has resulted in  home insurance prices now being 26% higher than this time last year, an all-time high.

Geographically, homes in London saw the largest rate of increase in home insurance premiums at 4.7% in July 2023. The monthly increase in London home insurance premiums resulted in the overall rise over the last 12 months to reach 28%, 2% higher than the national average of 26%. By comparison the lowest increase in home insurance premiums were in Wales, although still relatively high at 24%.

Pearson Ham Group’s home insurance analysis also found that premiums rose above the average rate for larger properties. Properties with four or more bedrooms saw their home insurance premiums grow by 28% over the year.

Stephen Kennedy of Pearson Ham Group, said:

“Home insurers have had a to address many challenges. Not least inflationary pressures,  increasing claims and the impact of regulation to pricing. All of which have resulted in home insurance premiums reaching an all-time high.

“The unprecedented rise in home insurance premiums over the past 12 months will be felt by consumers but relief may be in sight. The lower monthly rate seen in July signals a change, and perhaps a return to normalisation in pricing. If not that, it at least suggests a reduction in the level of premium increases expected in the coming months.”

Tips for buying home insurance

1. Shop around to find the right home insurance. When shopping around, don’t rely solely on one comparison site. Different comparison sites may offer better premiums.
2. Offers from your local insurance brokers and some of the large insurers will not be available on price comparison sites, so you should consider approaching them.
3. Check for items in your cover that you might be insured for elsewhere. For example, accidental damage is often an additional extra on home insurance policies.
4. For buildings and contents policies, there is typically a compulsory excess and a voluntary excess. Insurers generally reduce the size of your premiums if you opt for a higher voluntary excess.
5. Understand whether the premium will be paid for annually or monthly. If you can afford to pay annually, it may provide a decent saving.