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Property tax rises in UK are driving up home insurance costs

Home insurance costs in the UK are rising as a consequence of higher property taxes, according to new analysis.

Average property insurance bills increased by 2% in the 12 months to April 2017 to reach an average of £121, the latest study from insurance market research experts Consumer Intelligence has revealed.

It is worth pointing out that home insurance costs are rising slower than the rate of inflation, which increased to 2.7% last month, but Consumer Intelligence insists that property insurance costs would be lower if the government had not increased Insurance Premium Tax.

Over-50s householders are seeing the biggest increases at 3.6% compared with just 1% for under-50s and prices are rising fastest in the North East of England and Yorkshire & Humberside at 3.3% and 3.2%. Londoners however pay the highest average bills at £144, Consumer Intelligence said.

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 2% in the last 12 months and we expect premiums to rise further in June when it increases to 12%.

“There is no indication that prices will come down and we expect another year of relative stability although new rules making insurers include last year’s premium with renewals may have some impact on new business rates.”

The table below shows average premiums and price rises around Great Britain: 

REGION

CHANGE IN YEAR TO APRIL

AVERAGE PREMIUM (FIVE CHEAPEST)

North East

+3.3%

£114

Yorkshire & Humber

+3.2%

£125

South West

+2.9%

£115

South East

+2.4%

£123

Eastern

+2.2%

£119

Wales

+2.2%

£114

London

+1.9%

£144

East Midlands

+1.7%

£111

West Midlands

+1.7%

£114

Scotland

+1.6%

£122

North West

+0.9%

£120

GREAT BRITAIN                 

+2.0%

£121

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    Dear Marc,
    Your headline says Property tax rises are driving up insurance costs, but the article does not mention any property taxes.
    Did you mean "Insurance Tax"?
    The article also says that Consumer Intelligence "insists" that property insurance costs would be lower if IPT had not been increased. I would have thought that this was a fact, not an opinion.

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