UK home insurance prices: renewal quotes may rise despite annual falls

What happened

UK home insurance prices began to edge upwards in June 2026, according to Defaqto, raising questions for households approaching renewal after two years of falling competitive quotes. Its measure rose 1.0% that month, the first monthly increase recorded during the downward cycle. The findings concern combined buildings and contents insurance, rather than buildings-only or contents-only policies, and were reported by Insurance Business America on 26 August 2026.

Across the second quarter as a whole, Defaqto’s measure still fell 0.7%. A 0.4% reduction in April and a further 1.2% fall in May preceded June’s increase, according to the company’s Market Pricing data, published on 15 July 2026. That sequence matters because a quarterly figure combines movements over three months: it can remain negative even when prices have started rising towards the end of the period.

Defaqto said most large providers it monitored increased rates during the quarter, while larger reductions from a smaller group kept its competitive average down. Individual insurers’ quarterly movements ranged from a 3.1% reduction to a 3.0% increase. Its measure averages the five most competitive quoted premiums, so it should not be read as a simple average of every insurer’s prices or as the amount every household paid.

A separate measure from the Association of British Insurers, or ABI, put the average premium paid for combined buildings and contents cover at £383 in the second quarter. The ABI recorded its first quarterly increase since early 2025, although the figure remained about 2.0% lower than a year earlier. Unlike Defaqto’s competitive quote measure, the ABI tracker measures prices actually paid, so the two datasets describe different parts of the market.

The background

The recent increase followed substantial reductions in Defaqto’s quoted-price measure. At June 2026, it was down 1.3% over six months, 7.0% over a year and 14.4% over two years, according to the company. These comparisons explain how insurance can remain cheaper than at an earlier renewal while becoming more expensive than quotes available just a few weeks before; the starting date changes the comparison.

The ABI’s longer-running figures show the earlier rise in the cost of cover. Its average combined premium paid was £300 in 2022, £341 in 2023 and £395 in 2024, compared with £383 in the second quarter of 2026. Those earlier figures cover full years, whereas the 2026 figure covers one quarter, so they provide historical context rather than a like-for-like annual comparison.

Defaqto director Stephen Kennedy said claims costs remained high and external pressures continued to create uncertainty. Insurance Business America also reported elevated rebuilding and repair costs, with labour shortages extending claims timelines. For households, the price of a policy and the time needed to resolve damage are separate concerns; Property Pulse UK’s coverage of subsidence claims and long repair waits examines the practical difficulties that can follow a claim.

The Defaqto release did not separate its findings by property type or flood risk, according to the source report. It therefore provides no basis for calculating a specific increase for an older house, a flood-exposed address or a home at risk of subsidence. Property-level questions require separate evidence, as explained in coverage of planned Flood Performance Certificate trials in England, rather than an assumption that a national pricing movement applies equally to every home.

Read moreHome insurance after flooding costs £239 more a year in comparison study

What people are saying

Kennedy’s assessment was that the long period of price reductions had slowed markedly. He said insurers increasingly had to balance the need to compete for customers against protecting their margins. That describes a commercial tension rather than a single instruction followed across the industry: a provider seeking more business can make a different pricing decision from one concentrating on the profitability of its existing policies.

Kennedy expected upward pressure on home insurance premiums in the near term, but did not predict a repeat of the sharp, widespread increases associated with the earlier pandemic and inflation cycle. His expectation was for smaller adjustments aimed at particular parts of insurers’ business. This was a forecast about the likely shape of future pricing, not a published schedule of increases or a guarantee about any individual renewal.

Defaqto product manager Francis Luery highlighted the differences between providers rather than the quarterly average alone. He expected those differences to become more pronounced as insurers made their own decisions about where to expand and where to change prices. Over 12 months, the provider movements reported by Defaqto already ranged from reductions of about 13.0% to an increase of roughly 1.0%, illustrating how far individual pricing decisions could differ.

Luery also expected more customers to compare alternatives at renewal if they saw their premiums rising. For brokers, he said that could generate more requests for quotes while making it harder to retain customers whose existing insurer had increased prices. His comments concerned an expected response to changing prices; the report did not provide a measured increase in customer switching or quantify how much households might save by moving.

What happens next

Defaqto pointed to its wider pricing data as one reason to watch subsequent home insurance figures closely. It said home insurance had historically followed changes in motor insurance pricing after a delay of several months, while its motor index had already risen for two consecutive quarters. That historical relationship is a possible indicator, not proof that home insurance will follow the same course; the supplied figures do not establish what happened after June.

For a household comparing renewal options, the useful comparison is between policies covering the same needs, not simply between an individual quote and the national average. Buildings insurance generally covers the structure, while contents insurance covers belongings, and the excess is the amount the policyholder contributes towards a claim. Checking those features alongside the annual price helps avoid treating a cheaper policy with materially different cover as an equivalent offer.

A change in how a property is used also needs attention independently of market prices. Someone preparing to let a former home should check that the proposed insurance is suitable for that use rather than assuming an ordinary home policy remains appropriate. The checks are set out in Property Pulse UK’s guide to insurance before letting a former home; the Defaqto findings should not be treated as a separate measure of landlord insurance pricing.

On the cost side, Insurance Business America identified further increases in construction materials, energy or transport as potential sources of pressure on insurers. Those were risks to future pricing, not confirmed increases included in a forecast. Subsequent releases will need to show both whether competitive quotes keep rising and whether premiums actually paid follow them, while property-specific renewal offers will remain the evidence households need for their own budgets.

Why this matters

For homeowners budgeting for renewal, the main issue is the gap between a market average and the offer for their own property. Defaqto’s findings show that a falling quarterly measure can coexist with increases at most large providers it tracks. Comparing suitable policies can help households assess their options, but the figures do not promise a saving or predict a particular renewal bill. Cover and excesses remain important alongside the price.