’The slowing rise of home insurance premiums should certainly be welcome news for UK households,’ says commercial director
The cost of home insurance in the UK continued to rise in the final quarter of 2024, but at a slower rate than in previous months, according to the latest data published by price comparison website Compare the Market today (18 February 2025).
Its research revealed that between October and December 2024, home insurance premiums increased by 14% year-on-year, down from the 21% rise recorded between July and September that same year.
The average home insurance premium climbed to £225 during the last three months of 2024, up from £197 for the same period in 2023.
While premiums for this line of business are still on the up, Compare the Market’s latest statistics demonstrated a continued slowdown in the pace of premium hikes across the country.
Regionally, Northern Ireland saw the largest increase in home insurance costs in Q4 2024, with premiums rising by 31% to an average of £451.
London (25%), the south east (18%) and Scotland (17%) also experienced significant increases in home cover costs.
Despite these recorded premium upticks, all of these regions saw a slower rate of premium growth in 2024’s Q4 when compared to Q3 last year.
“The slowing rise of home insurance premiums should certainly be welcome news for UK households,” said Helen Phipps, commercial director at Compare the Market.
“Home premiums are being pushed up partly by the high levels of payouts seen in the past year, which have been driven somewhat by flooding and higher building costs.”
Flood prone properties
Homeowners with properties that have previously been affected by flooding continue to pay higher home insurance premiums.
Read: What to do about homeowners shunning home insurance?
Read: Home insurance prices coming down for first time in 19 months
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However, these increases have also decelerated according to Compare the Market’s findings. Between October and December 2024, the average home premium for previously flooded homes rose by 17% year-on-year to £489.
This represents a slower increase compared to the 30% jump the price comparison website recorded between July and September last year.
Compare the Market suggested that rising claims costs, inflation and supply chain challenges are contributing factors to ongoing premium increases for this line of business.
Phipps continued: “The rising number of payouts combined with inflation and strained supply chains are leading some in the insurance industry to expect UK home premiums to continue rising in 2025.”
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