The cost of home ownership in the UK is lowest for a decade
The proportion of household outgoings spent on home ownership in the UK is the lowest it has been over the last 10 years while renting is the lowest since 2011, new research has found.
Using data from the Office for National Statistics, hybrid estate agent Emoov looked at all of the components of household expenditure since 2007, across all outgoings associated with owning or renting a property and what percentage of total average weekly household expenditure they accounted for.
The research found that the percentage allocated to paying weekly mortgage interest payments is the lowest they have been since 2007 with rent also seeing a decline to a six year low.
As a percentage of the total household expenditure, the amount of our household outgoings spent on mortgage interest payments has dropped to just 3.77% from 7% plus at the peak in 2007/2008.
Similarly, rent now accounts for 8.52% of our outgoings, the lowest it’s been since 2011 when it accounted for 8.44% of weekly household expenditure.
The cost of running a home has also reduced with water supply at its lowest as a proportion of total household expenditure since 2008 at 1.61%. The price of electric, gas and other fuels in relation to other outgoings has also hit a nine year low and although it is currently much higher than most other outgoings at 4.01%, it has reduced to the same level as 2008.
Finally, the cost of stamp duty is at its lowest level in the last 10 years at just 0.04% of the weekly household expenditure having peaked in 2003 at 0.14%.
However, the cost of maintaining a home is now at its highest at 1.55% in six years, having peaked at 1.59% in 2011 before gradually breaking the 1.5% threshold again in 2017 and the total cost of household goods and services is at a 10 year high, now accounting for 7.09% of total household expenditure.
The amount spent on council tax has also increased, reaching its highest level since 2011 and now accounting for 4.04% of household expenditure.
‘Despite Brexit and a failed snap election, house prices and rent have continued to creep up, remaining the largest financial hurdle for many where renting or home ownership is concerned,’ said Emoov chief executive officer Russell Quirk.
‘While they still account for the largest proportion of our household expenditure, the cost has actually reduced when compared to the bigger picture of our total household outgoings,’ he pointed out.
‘While the proportion of spend in terms of getting a roof over our head may be reducing, the cost of maintaining that roof is highest it has been in a long time. For those looking to get onto or further climb the ladder, it shows the importance of managing costs when trying to save and demonstrates how reducing other weekly outgoings can make all the difference in improving your purchase power,’ he added.