The Cost Running a Home Continues to Rise.

by Mark Johnston

The Cost Running a Home Continues to Rise.

Moving in to your own home can be an exciting time but at the same time it can also be an expensive one.

According to a study by Prudential, an independent financial services company, the average household spends an estimated £508,000 on housing expenses, including mortgages, rent, repairs, energy bills and council tax.

Although the average annual mortgage payment has fallen by £950 or 21 per cent over the past five years, according to new research by Halifax, the annual expense of owning and running a house has increased by £179 over the past year.

Martin Ellis, housing economist at Halifax, states that“lower mortgage payments have largely offset increases in other items of housing related expenditure, such as the substantial rises in electricity and gas bills.”

It seems that water and fuel bills have risen most in percentage termswater bills have increased by an average 5.6 per cent over the past year.

The next biggest percentage rise was in electricity and gas bills, which increased by an average of 4.2per cent.

Five years ago, electricity, gas and other fuels made up 12 per cent of all household costs. This has now risen to 18 per cent as people pay more to heat their homes.

Research carried out for HomeServe, an emergency home repair service, also found that home owners anticipated the average quarterly cost associated with home ownership will go up by 6.4 per cent to £1,552 over the course of the next three months.

Many experts feel that the current strain on household finances is particularly concerning at a time when earnings growth remains weak.

New figures have revealed that it now typically costs around £9,590 a year to run a home, a 1.9 per cent rise on the £9,411 it cost in 2012.

Therefore families in the UK face a lifetime bill of £1.8 million or £29,000 a year to run their home, with energy bills and housing costs the biggest expenses.
New research by the Joseph Rowntree Foundation (JRF) found that families are having to cope with an “unprecedented erosion of household living standards” as the gap widens between the rising cost of goods and services, and their stagnant wages.

Therefore according to housing and homelessness charity shelter almost 1 million people are turning to payday loans in order to cover everday housing costs.

Debt counselling charity Stepchange, warn that “Payday loans may seem like a quick fix, but the huge interest charges mean things can quickly spiral out of control.”

It also appears that many home owners said they had no money put away for emergency outgoings, such as unexpected home repairs or replacing appliances, and said they would be forced to dip in to their savings to cover the costs.

HomeServe Memberships chief executive officer, Jonathan King added “With money tight, many of us do not have the buffer of savings, credit or disposable income to protect ourselves against unforeseen outgoings.”

In conclusion it does seem then there is a ‘growing gulf’ between what people expect their living standards to be, and their ability to achieve it.

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