Thousands of right-to-buy and other leaseholders in Kensington and Chelsea council properties face a near-doubling of their insurance premiums because of the Grenfell Tower tragedy.

The council has written to leaseholders to say buildings insurance premiums will be hiked 86% after Spanish insurer Ocasa hikes its price.

Residents were furious at the extra charge, with one telling the Evening Standard: “This is just unbelievable. The council’s incompetence and penny pinching has led to the tragedy in the tower and now we are being left to pay for it.”

Premiums on a four-bedroom property will rise to £703 a year, a £310 increase. A one-bedroom flat goes up by £240 to £522. The price hikes apply to 2622 Kensington residents who own their council properties.

The council’s letter describes the increase as “frustrating” and blamed it on “a significant and unprecedented loss” Ocasa would be suffering on the policy from the Grenfell Tower fire. A decision taken after Grenfell to raise the amount of cover for relocation costs in the event of future fires will also cost residents more.

The increase in insurance premiums adds to the expected hike in council tax in the royal borough as it faces major bills to cover what it has called “significant additional expenditure” for Grenfell-related adult social care.

However, most costs arising from the disaster will be met by the council’s reserves.

The borough has also set aside £5 million for legal bills arising from the tragedy as it faces a likely maelstrom of claims. It recently admitted spending nearly £21 million keeping survivors in hotels as, more than nine months after the blaze, fewer than a third of Grenfell residents have been permanently rehoused.

The council said that a tribunal is being convened to rule on whether the price hikes for insurance are reasonable and should be paid by individual leaseholders.