It’s been widely publicised that inflation in the cost of building supplies and labour has reached its highest level for many years.

Our insurer partner AXA has outlined the concerns this raises about the ability to keep sums insured at a level that will cover the significant inflationary pressures currently being experienced.

The latest ONS data published by the Department for Business, Energy and Industrial Strategy for June 2021 shows that the cost of materials year on year increased by 14.70%.

The causes of this increase are many and varied. Some are short-term shocks such as the pandemic and the Suez Canal blockage. Others are more permanent such as the impact of Brexit and long-term commodity pricing based on global supply and demand.

In response, although AXA’s Flats contract states that they will track the Household Rebuilding Cost Index prepared by the Association of British Insurers, they’ve temporarily adjusted the index applied to offer better protection to customers.

AXA strongly encourage customers consider getting a professional revaluation of their properties completed by a RICS qualified surveyor; indexation is always an average and relies on the original Declared Value being correct.

If you have any questions relating to your insurance arrangements please contact us on 020 3907 7866.

Source: AXA Insurance