Cost of owning and running a home 'down by a fifth' - Halifax » Bill Payments » 24dash.com

The cost of owning and running a home has fallen by nearly a fifth during the past year to its lowest level since 2006, research shows.

The average property cost £7,298 a year to run in the 12 months to April, 17% less than during the previous year, according to high street bank Halifax.

The steep drop in running costs was driven by a 47% fall in mortgage interest payments, as the Bank of England base rate was slashed to a record low of 0.5%.

As a result of the decline, the average mortgage rate to dropped to 3.62%, down from 5.8% in April 2008, and interest payments fell to an average of £1,990 a year.

But mortgage payments were the only area of household running costs that fell during the 12 months, with gas and electricity charges rising by 13% to average £1,409 a year.

Routine maintenance costs also increased, rising by 7% to £350 a year, while both water bills and the cost of repairing properties were 5% higher in April than a year earlier.

Despite their fall, mortgage interest payments are still the single biggest cost of owning a home, accounting for 27% of the total, although this is down from 43% in April 2008.

Electricity and gas bills are the second biggest cost at 19%, up from 14%, followed by council tax and domestic rates at 17%.

Overall, the cost of owning and running a house takes up 23% of earnings for someone on an average salary, down from 28% in 2008.

Suren Thiru, economist at Halifax, said: "With mortgage interest payments declining by almost half over the past year, the annual cost associated with owning and running a home in the UK has fallen significantly.

"Such a sizeable drop in the costs of running a home will help to ease the pressure on household disposable income, providing some relief to homeowners."

All regions of the UK recorded a double digit fall in housing costs during the year, with London seeing the steepest drop at 21%, followed by the South East at 19% and the East at 18%.

Wales and Northern Ireland recorded the smallest decreases, with homeowners in both regions seeing a 13% fall in the cost of running a property.

Unsurprisingly, annual running costs are highest in London, where property is most expensive, averaging £9,180 a year, while they are cheapest in the North East at £6,106.