Households still feeling the squeeze as cost of running a home climbs by £695 per year

The latest analysis from finance specialists, RIFT, has revealed how UK households are still being squeezed financially as the cost of running a home has increased by almost £700 a year, with sharp hikes to utility bills driving this increased cost. 

RIFT’s analysis shows that the aspiration of homeownership remains an expensive one and one that is only getting more expensive. In the last year alone, the average cost of purchasing a house has increased by 8.8% across the UK, with the average buyer requiring a budget of £46,898 in order to climb the property ladder.

But it’s not just the cost of securing a home that has increased, the month to month costs associated with running a home have also increased. 

RIFT analysed the primary average monthly household costs associated with a property, including the monthly mortgage payment, council tax, utility bills, TV license, broadband, home insurance and maintenance costs. 

Average monthly household outgoings now £1,989

The research shows that, today, the average household is forking out monthly outgoings to the tune of £1,989. Despite improvements to mortgage affordability in recent months, our monthly mortgage payment accounts for a huge 65% of this monthly spend at an average of £1,299. 

With the average cost of maintaining a property estimated at £224, keeping our homes in good order is the second largest monthly outgoing at 11% of the average total households spend, with council tax also accounting for a sizeable chunk at 10% (£190 per month), along with our gas and electricity bills at 8% (£154 per month) 

Cost of running a home up £700 versus last year

And whilst inflation may have eased from a peak of 9.6% in October 2022, the bad news for households is that the cost of running a home has climbed year on year, up by £58 a month or £695 per year compared to just a year ago. 

This increase has been seen almost across the board, with just the cost of broadband falling versus this time last year, down by -4%. 

The cost of our water and sewage bill has seen the largest annual increase at 26%, with our gas and electricity bill climbing by 9%, whilst the cost of home insurance has also increased by 8%.

For those with a car to keep running, the cost of a service and MOT is up 8%, with road tax also climbing by 3%, although there has been a 17% reduction in the cost of car insurance. 

Social aspects also more expensive now

And there’s even more bad news when it comes to spending what little disposable income we have left each month. Everything from gym memberships (+5.6%) to a cup of coffee (+4.5%), the cost of a pint (+1.6%) to a takeaway kebab (+7.6%) have seen an increase in cost over the last year alone. 

Bradley Post, MD of RIFT, commented: 

“The rate of inflation may have eased from the peak seen in 2022, but it remains considerably higher than many households will have become accustomed to prior to the cost of living crisis.

So it’s fair to say that things certainly haven’t gotten any easier in that respect and, in fact, the cost of maintaining and running our homes has become all the more expensive over the last year alone. 

Whilst this increase has been primarily driven by soaring utility bills, almost every aspect related to running a home has become more expensive. 

But it’s not just our homes where we’re feeling the pinch. Many aspects of our social life are also costing us more today, whether that be a pint and a takeaway, a gym membership, or a trip to the theatre.”

Data tables and sources

  • Data sourced from a range of sources which can be viewed in the data tables linked below.