Households as cheap to run as they were 3 years ago
Not all appears to be doom and gloom in the recession this week as Halifax have revealed that the cost of running the average house fell from ?8,766 in 2007/8 to only ?7,298 this year. However, although the average went down, not everyone is better off. Only those who own their homes and receive a variable or tracker mortgage were affected, as the falls are directly related to income rates. If you?re a tenant or unfortunate enough not be on a fixed rate mortgage deal, you?ll have seen the cost of running a house rise rather than fall.
This is because despite cheaper mortgage prices, just about everything else has increased in cost. Energy now costs a massive 13% more, water 5% and council tax and other domestic rates have risen by 3%. Even with these rises though, the massive 47% saving on variable deals still meant that costs were down on interest repayments thanks to continued cuts by the Bank of England.
Halifax economist Suren Thiru said: “Such a sizeable drop in the costs of running a home will help to ease the pressure on household disposable income, providing some welcome relief to homeowners. Those living in London saw the biggest fall in housing costs over the past year, although the average annual expense of running a home in the capital remains higher than elsewhere.”
This follows other news this week that retail sales are climbing once again, and that the Council of Mortgage lenders expect to see a 10,000 house reduction in the number of houses being repossessed.
However, Chris Tapp director of Credit Action, a UK debt charity stated: “For a lot of people, things are still very tight and for significant numbers, life has become more, not less expensive. For those who don?t have mortgages, as well as borrowers on relatively high fixed rates or SVRs, this does not mean an awful lot, and it doesn’t take account of higher pressure on incomes from pay cuts or unemployment.”