As the rate of inflation rises to a two-year high of 4.5 per cent, new research from Halifax shows that the cost of housing is now at its most expensive level for the past three years.
The housing costs covered in the survey include mortgage payments, council tax, utilities, maintenance, insurance, goods and services and other essentials. The average annual cost is now £9,083, £127 more than three years ago.
Electricity and gas charges proved the main reason for the increase, with a 19 per cent rise over three years, while maintenance costs have also risen steeply, up 17 per cent.
While prices have risen in most of the categories used by Halifax, the low cost of mortgages means the high increases in other areas means costs have fallen somewhat.
If mortgage costs were excluded from the calculation then housing related expenditure would have increased by 13 per cent between March 2008 and March 2011, greater than the rise in inflation over the same period (10 per cent). In addition, those paying rent rather than a mortgage have seen their housing costs rise by 10 per cent over the same period.
Suren Thiru, housing economist at Halifax, commented: “Household finances remain under pressure with the significant drop in mortgage payments since 2008 mostly offset by increases in other household bills. Rising utility bills have been a clear driver behind this, along with increases in maintenance costs and council tax charges. The current strain on household finances is particularly concerning at a time when earnings growth remains weak.”
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