In a welcome easing of inflationary pressure on property insurers in the UK, overall prices for property repair materials fell in the last quarter by 1.4%, according to Verisk’s Q3 2023 Property Pricing Trends Report.

While some materials experienced an increase in cost such as paint, wall tiles and carpets, the price of some materials went in the opposite direction, with the price of floor tiles, roofing, electrical and masonry products all falling.

The fluctuations in material prices were not uniform across the United Kingdom. In Wales, the Midlands, the Northeast and Southeast regions, prices fell in line with the national average. In the South West, London and Northern Ireland, prices remained broadly the same as in Q2.

Verisk’s research across advertised wages in the last quarter found that wages increased by 3.6%. Most in demand were jobs such as renderers and roofers. There was less demand for plasterers, bricklayers and scaffolders.

Ben Blain, head of property at Verisk said: “As we reported in the last quarter, the worst inflationary pressures on the cost of materials used in property repairs would appear to be behind us. But, with the average price of diesel rising by 8% across the UK and wages still rising for tradesman, it is a mixed inflationary picture for property insurers. This underlines the importance of continuous monitoring within the insurance industry to set and agree fair repair rates with contractors. In a dynamic landscape, insurers need to consider fluctuations in the cost of materials, running plant equipment and labour so they have the flexibility to react and optimise their cost management capability as part of their ongoing duty to customers.

Blain added that for insurers and contractors looking to "up their game" in responding to severe weather events going forward and in ways they can control, agreeing a fair schedule of pricing with contractors is an excellent place to start.

“Last winter was a challenging time for insurers and contractors. Our research showed that the rapid thaw led to a 560% increase in escape of water claims, resulting in a 35% increase in escape of water claim spend. As a result, work-in-progress repairs rose by 10% compared to the previous year, with contractor labour shortages adding to the delays.

"The Construction Leadership Council has said that the availability of most repair materials is back at pre-Covid levels which is helpful in getting on and finishing repair work. Unfortunately, the recent storms means the likelihood is that work-in-progress times will stretch even further which will present a customer expectation management issue for insurers and contractors.”

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