by Mark Johnston
The annual cost of running a home is at its highest for 4 years, despite falling mortgage repayments. The cost has soared to a ten year high.
Martin Ellis, housing economist at Halifax, said “the typical costs of owning and running a home has increased over the past year, returning the overall level to that of 4 years ago”.
This figure comes from a report from the Halifax and confirms the experience of millions of home owners who have now found that they can barely afford to pay household bills.
The housing costs shown in the report include everything from the monthly mortgage bill, council tax, water bill, electricity and gas bill to the household insurance costs, which amount to an average of £9,393 a year, which is the highest total since 2008 when the figure was around £9,406.
These figures have shown that the annual household bill has risen much faster than the average pay rise.
Despite the high decade figure, compared with the rest of the country Scotland’s annual costs are 9% lower than England and Wales at just £8,532.
The fact that bills have reached their highest levels in 4 years is extraordinary given the fact that the average mortgage repayment has slumped. In 2008 the annual repayment bill was £4,521; this bill is now around £3,485, drop of more than £1,000.
It seems that despite mortgage repayment costs falling, escalating energy prices have pushed the cost of owning and running a home to their highest levels in a decade.
The Bank of England’s figures have shown that rising gas and electricity bills have accounted for 92% of household costs over the past year.
Research shows that the average cost of electricity, gas and other fuels is £1,653 a year, this is a jump of £218 compared with last year and 4 years ago when the average bill was £1,101.
Also in a new move by the government, which will add more financial pressure on to households, millions of home owners who want to build a conservatory, replace a broken boiler or install new windows will be forced to spend hundreds of pounds more on ‘green projects’. This is expected to add at least 10% on to the cost of any building project in the home.
Those home owners who do not have the money to pay for this work will have to borrow it under the governments ‘green deal’ and then pay it back for years to come through an extra charge on their energy bills.
A spokesman for the Department for Communities and Local Government (DCLG) admitted that the measure would be ‘mandatory’ unless the home already had a high energy performance rating.
Critics believe the scheme is yet another grab from incomes of people who are already struggling to heat their homes and make ends meet.
Tim Yeo, Tory MP and chairman of the energy climate change committee, stated “if people are spending their own money on a new boiler, compulsory intrusion is not appropriate”.
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