Home premiums drop for third consecutive month

Home insurance premiums continued to drop in February 2025, new data from Pearson Ham has revealed.

Published today (5 March 2025), the data showed that prices fell 1.3% during the month, marking the third consecutive month of reductions.

Price reductions were consistent across all UK regions, with the East Midlands experiencing the most significant decrease (-1.6%).

Bungalows (-1.4%) and larger four-bedroom properties (-1.4%) saw the largest declines, reinforcing patterns observed in late 2024.

However, despite these recent declines, premiums remain 2% higher than they were at the same time last year, reflecting the longer-term impact of inflation on home insurance pricing.

Frances Luery, product manager at Pearson Ham, said: “The continued decline in home insurance premiums is a welcome relief for policyholders after a period of sustained inflation. However, it’s important to recognise that prices are still higher than they were a year ago.

“Many may see these reductions as a sign that the market is recalibrating, but it’s too early to draw that conclusion. The impact of recent extreme weather events has yet to be fully realised and we may see further adjustments as claims data filters through in the coming months.”

Motor premiums

Meanwhile, motor insurance premiums also continued to decline, but at a slower pace.

Prices fell by 0.9% in February 2025, marking the smallest monthly decrease in the past 12 months and bringing the annual movement rate to -19.3%.

The moderation in monthly declines suggests the market may be stabilising after a prolonged period of falling rates, Pearson Ham said.

Stephen Kennedy, director at Pearson Ham, said: “After a year of steep reductions, February’s smaller decrease is a signal that insurers are recalibrating their pricing strategies.

“The biggest reductions continue to be seen among older drivers, while regional and vehicle value differences highlight the complexity of pricing trends in today’s market.

“The question now is whether this slowdown marks the bottom of the cycle, or if external pressures – such as claims costs and regulatory factors – will drive further adjustments in the months ahead.”