Annual cost of owning and running a home on the rise

The typical annual cost associated with owning and running a home in the UK has risen by 1.9 per cent from £9,411 in 2012 to £9,5901. The increase was, however, less than the 2.7 per cent rise in consumer prices over the same period.

This was the third successive annual increase in the cost of owning a home following the decline recorded between 2008 and 2010, which was driven by the reduction in mortgage rates during this period.

Overall, the average annual costs of owning and running a home are now two per cent (£184) higher than five years ago. This increase is significantly lower than the 18 per cent increase in overall consumer prices since 2008.

Water bills have increased by an average 5.6 per cent (£27) over the past year. The next biggest percentage rise was in electricity and gas bills, which increased by an average of 4.2 per cent (£70). Six of the 11 housing expense categories tracked have risen in cost over the past year.

Total annual costs of owning and running a home are highest in London, at £12,094. This is 26 per cent (£2,504) above the UK average and 52 per cent (£4,124) higher than in Northern Ireland (£7,970), which has the lowest costs.

But mortgage payments have fallen by nearly a quarter since 2008. The average annual mortgage payment has fallen by £950 over the past five years from £4,521 in 2008 to £3,571 in 2013. This decline largely reflects the fall in mortgage rates since 2008.

In contrast, the cost of each of the other 10 housing expenditure categories tracked has risen since 2008. Electricity and gas bills have risen most (up by 57 per cent, or £626 a year), followed by home and garden tools (25 per cent) and water supply and miscellaneous dwelling services (22 per cent).

Nonetheless, mortgage payments remain the largest single component of housing expenses. Electricity and gas charges account for the second highest share, followed by council tax payments.

Halifax housing economist Martin Ellis said: “The typical costs of owning and running a home have again increased slightly over the past year, although this rise was below the general increase in the cost of living.

“Overall, the cost of owning a home has increased by two per cent over the past five years, representing a significant decline in real terms.

“Lower mortgage payments have largely offset increases in other items of housing-related expenditure, such as the substantial rises in electricity and gas bills.”