Between April 2008 and April 2010, the average annual cost associated with owning and running a home fell by £544 from £9,564 to £9,020. In real terms (i.e. after allowing for retail price inflation), the cost of housing has fallen by 9%. Housing costs in the UK are now equivalent to 27% of gross average full-time earnings, down from 30% in 2008.
The fall in the cost of housing since 2008 has been driven by a 19% (£881) decline in mortgage payments (interest and capital repayments). The average mortgage rate paid by existing borrowers fell by 2.13 percentage points between April 2008 and April 2010 from 5.80% to 3.67%.
Regionally, London (£11,762) and the South East (£10,457) have the highest average annual costs of owning and running a home. Housing costs are lowest in Northern Ireland (£7,331).
Home owning and running costs as a percentage of gross average full-time earnings are lowest in London (24%) despite the capital having the highest absolute costs. However, with the level of earnings varying considerably across the capital, housing costs will be much less affordable for a significant number of households. Housing costs are highest in relation to earnings in the East of England (31%).
Over the past year, the average expenses associated with owning and running a home have increased by 1.3% (£116). This is less than a third of the rise in retail prices (5.3%).
Suren Thiru, housing economist at Halifax, commented: "Over the last two years, the cost associated with owning and running a home in the UK has fallen, entirely as a consequence of reduced mortgage payments. The drop in housing costs has helped to ease the strain on household's finances, providing some relief to homeowners during the economic downturn."
