Many UK families are struggling to make ends meet after paying their mortgage or rent, plus routine household bills, according to our second annual Cost of Running a Home report[i].
And this is even before essential expenses like food and petrol are accounted for, the RSA research revealed.
It found that the average-sized UK home[ii] takes up 83% of total monthly earnings for single-income homeowners (81% for renters) making £27,271 – the Office for National Statistics national yearly average. This leaves just £347 spare each month for everything else, such as keeping the cupboards full, or a car on the road – let alone entertainment, or other non-essentials.
Even leaving aside central London, there are many areas where it costs above the national average wage (£1,818 per month after tax and NI) to run a three bedroom home. These include Croydon (£1,855 a month to own; £2,141 to rent) and many areas of the South East (Worthing: £2,060 to own), the South West and Scotland – where Edinburgh rents run to a staggering £2,500.
Meanwhile, properties in Antrim, Londonderry and Omagh in Northern Ireland are consistently among the cheapest for either owning or renting, coming in below £900 a month. To illustrate the difference at either end of the spectrum, owners in Neath Port Talbot, South Wales, have more than £1,000 left in their pocket each month after household bills – while those in Cambridge fall well short of breaking even (-£418).
It all means the average three bedroom home is effectively ‘unaffordable’ in many areas for national average wage earners, as they exceed 100% of total average earnings for more than a quarter of owners and renters.
So is it better to own?
Some 71% of people in the UK find it cheaper to run a home they own, rather than rent. Overall, there are some 29 towns across the UK where – irrespective of property size – it’s cheaper to own than to rent.
Despite this, the East Midlands is the only region where it is always cheaper to own. In Greater London it’s cheaper for just 23% of homeowners.
Graham Nicholls, head of home insurance at MORE TH>N says: “The report looks at average homes and average costs. Just as last year, it’s clear that most people are financially stretched putting a roof over their heads and paying their bills. With so little slack in the budget, it’s easy to imagine how one unplanned expense could prove to be unaffordable.”
[i] The report looks at the cost of running average homes across the UK based on national averages for either mortgage or rent payments plus the following bills: utility bills, water bills, council tax, TV/phone/broadband, contents and buildings insurance, garden maintenance (including plants and tools), household furnishings (including textiles and appliances plus general house maintenance. Flat service charges were not included in this report due to their wide variation with no national averages available for comparison.
The MORE TH>N CORAH report looked at the average cost of running five different sized properties from a one bedroom flat to a four bedroom detached house for both homeowners and renters in 72 towns across 12 regions. This housing stock represents typical homes for single, couple, retired, and families.
[ii] ONS: The average UK home has 2.8 bedrooms