Annual cost of keeping your home soars to ten-year high of £8,500
ESCALATING energy prices have pushed the cost of owning and running a home in Scotland to the highest level in a decade, despite historically low interest rates, according to new research.
The typical annual expense in Scotland was £8,523 at the start of the year, the highest average total since the Bank of Scotland analysis began in 2002.
The bank’s figures show that rising gas and electricity bills accounted for 92 per cent of the jump in costs over the past year.
Scotland recorded the third biggest increase in the UK in home running costs over the most recent 12 months, behind Ireland and Wales respectively, but the price tag is still lower than the UK average. The bank also found that the average yearly cost of owning and running a home in Scotland rose by 50 per cent over the past ten years, nearly double the 28 per cent increase in consumer prices over the same period.
The figures show in detail that housing costs rose 3.1 per cent – or £257 – from £8,266 in January 2011 to £8,523 in the same month this year.
This figure was slightly ahead of the 2.7 per cent increase for the UK as a whole, but less than the 3.6 per cent rise in consumer prices over the same period.
Despite the decade-high figure, compared with the rest of the country, the £8,523 figure for running a home in Scotland is 9 per cent lower than the UK average of £9,393. Economists concluded that the largest contributor to rising housing costs was a £237 rise in utility bills. The increase in gas and electricity charges was nine times the rise in the cost of home and garden tools, and was the second biggest contributor to the overall jump in housing costs.
The jump in energy costs was in stark contrast with the reduced cost of mortgage repayments, which fell an average of £59 over the past year. Since 2008, they have fallen by nearly a quarter from £3,775 to £2,910.
Nitesh Patel, housing economist at Bank of Scotland, said: “The typical costs of owning and running a home in Scotland have increased over the past year, even though interest rates remain at a historic low. This has happened because the substantial fall in mortgage payments over recent years has been more than offset by increases in most of the other costs associated with home ownership.
Deputy director of the watchdog Consumer Focus Scotland, Trisha McAuley, said the findings are no big surprise, but worrying all the same: “Householders do seem to be being hit particularly hard by increased prices. The fact that most of the extra cost is in their energy bills is of particular concern.
“Despite the underlying trend being for prices of things like electricity, gas and insurance to go up, it is still often possible to get a better deal.”
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