The Financial Conduct Authority has set out proposals to protect leaseholders from building insurance premiums that have more than doubled following the Grenfell fire tragedy.

It says industry data from 2016 to 2021 shows that the average price of premiums for such buildings has jumped by 125% to £15,300 from £6,800.

It adds that “there has been a reduction in the supply of insurance for multi-occupancy residential buildings” in this period “with some insurers leaving the market and a reduced appetite to take on new business among others. This appears to be the result of the falling profitability of this line of business.”

The body says it “expects the insurance industry to work quickly” with the regulator to correct this situation.

Its key proposals include:

* Creating a cross-industry pool to limit the risk to individual insurers posed by certain buildings affected by flammable cladding or other material fire safety risks, aimed at reducing the price of insurance for these buildings

*Increasing the amount and transparency of information available to leaseholders on the pricing of the insurance they pay for

*Making it easier for leaseholders to challenge high insurance costs passed on to them

*And making leaseholders ‘customers’ of buildings insurance

FCA executive director of consumers and competition Sheldon Mills says: “Since the Grenfell tragedy, hundreds of thousands of leaseholders have had to endure the difficulties of living in buildings with known fire safety issues and these problems have been made worse by increases in the cost of their insurance.

“We will consult on measures to improve transparency for leaseholders about the price of their insurance and how leaseholders can be given greater protection.

“We expect the insurance industry to work quickly with us and government to develop solutions to this issue, including developing pooling arrangements and reducing commission, that will make affordable insurance cover more widely available.”

The FCA will provide an update on the progress of its plans in six months.

The City watchdog was asked by the former Secretary of State for Levelling Up, Housing and Communities in January to carry out a review into the market for multiple-occupancy residential building insurance which increased substantially in the wake of the 2107 blaze, which killed 72 people.