Homeowners feel the strain as building insurance costs rise 25%

Joy Agwunobi

Homeowners across the United Kingdom are facing a significant increase in the cost of building insurance, with fresh data from financial comparison platform Go.Compare revealing a 25 per cent year-on-year increase in average premiums.

According to Go.Compare’s latest Home Insurance Price Index, the average cost of buildings insurance rose sharply from £167 in the Q1 of 2024 to £208 in Q1 2025. This marks one of the most substantial hikes in recent years, attributed to a combination of external economic pressures and environmental challenges.

While building cover has seen the most rise, the report notes a relatively modest 4 per cent increase in the cost of combined buildings and contents insurance policies. These premiums climbed from an average of £224 in Q1 2024 to £232 in Q1 2025. Meanwhile, contents-only policies remained stable, holding firm at a median premium of £63 over the same period.

Nathan Blackler, a home insurance expert at Go.Compare, explained the factors driving the spike in building insurance costs, stating, “This rise in the cost of buildings insurance won’t be welcome news to homeowners, but it’s also not entirely unexpected. The 25 per cent increase over the past year has been driven by several contributing factors — including an uptick in extreme weather events, rising inflation, and soaring rebuilding costs.”

The report also underscores the wide variation in home insurance premiums based on property size and location. Larger properties naturally command higher premiums, with the average cost for a one-bedroom home pegged at £175, while homes with five or more bedrooms attract average premiums of £433 for combined cover.

Geographic location is another key determinant of insurance costs. Northern Ireland stands out as the most expensive region in the UK for home insurance, with the average cost of combined buildings and contents covering reaching £424. In contrast, the North East offers the most affordable rates, with a median combined policy cost of just £184.

Blackler emphasised that while some insurance cost factors are beyond homeowners’ control, there are proactive steps individuals can take to minimise their premiums. “Opting to pay annually rather than monthly can save money, as insurers often charge interest on monthly payments. Additionally, bundling buildings and contents insurance with the same provider could lead to discounts,”he noted.

Go.Compare also shared several expert-backed tips to help homeowners reduce their insurance costs:

Avoid automatic renewals: Failing to shop around at renewal time can result in higher premiums. Consumers are encouraged to set reminders and compare options before their current policy ends.
Maintain your property: Staying on top of general upkeep such as fixing leaks or trimming overgrown trees can reduce the likelihood of claims and keep premiums lower.
Time your purchase wisely: Purchasing a new policy around 28 days before the renewal date can often unlock more competitive pricing.

As the UK insurance market continues to respond to economic pressures and climate-related challenges, homeowners are advised to stay informed and vigilant to avoid unnecessary costs and ensure adequate protection.