The cost of running a home now almost half household income according to research by MORE TH>N as part of its second annual ‘Cost of Running a Home’ report. The study found that owning a three-bedroom home in the UK comes with average annual running costs of £18,197 (£1,516 per month), with rented three bedroom homes slightly less expensive at £17,657 per year (£1,471 per month).

This means that almost half of the net monthly income for families with two people earning the national average wage is being spent on house running costs (42% for homeowners and 40% for those who rent), leaving just over £2000 of leftover income to cover all other expenses each month.

The study also provides a regional breakdown of how costs vary across the UK. The cheapest monthly running costs for a one bedroom flat were found to be £330.61 (owned) in Northern Ireland’s Omagh, which contrasts sharply with £4,299.50 for a one bedroom owned flat in London’s Westminster at the other end of the spectrum.

For a household with two working adults each earning the average UK annual salary, this means that between 40% (rented) and 42% (owned) of post-tax earnings are being spent purely on household bills and the rent or mortgage.

Overall, the figures work to reveal that families today either need the head of the household to be earning significantly more than the average UK salary, or for both parents to be working, just to make ends meet. This is evidenced in the below table which demonstrates how much leftover income families might have for a range of different wage-brackets if they were running the average UK three-bed property.

Rented (average UK running cost – £17,657)

Annual Salary

Net monthly take-home

%ge spent on house running costs

Leftover monthly income

£27,271 (national average)

£1,818.7

81%

£346

£40,000

£2,531 

58%

£1,060

54,542 (2 x national average)

£3637.4

40%

£2,166

£70,000

£4,032

36%

£2561

 Owned (average UK running cost – £18,197)

Annual Salary

Net monthly take-home

%ge spent on house running costs

Leftover monthly income

£27,271 (national average)

£1,818.7

83%

£302

£40,000

£2,531 

60%

£1,015

54,542 (2 x national average)

£3637.4

42%

£2,121

£70,000

£4,032

38%

£2516

MORE TH>N’s Cost of Running a Home research also found significant variations in the costs of running the same-sized homes in 72 towns across the UK. Most stretched are households in the highest region of Greater London, where 70% of properties cost more than £1,818.7 per month to run – the average UK net take-home after tax.

Removing expensive central London3 out of the data, the report also reveals the stark contrast in the monthly costs to live in a three-bedroom home in different parts of the country of the 72 towns and cities that were surveyed: 

Monthly Costs

First

Second

Third

Cheapest – home owners

£813.51 – Neath Port Talbot

£856.27 Antrim, NI

£861.48 Derry/Londonderry

Most expensive – home owners

£2236.18 Cambridge

£2082.68 Stratford-Upon-Avon

£2059.99 Worthing

Cheapest – renters

£841.18 Omagh, NI

£880.36 Derry/Londonderry

£890.10 Antrim, NI

Most expensive – renters

£2157.93 Oxford,  

£2141.20 Croydon

£1924.82 Cambridge

 So whilst a family with two people earning the national average salary in Omagh, Northern Ireland would be left with £2,796 disposable income each month, this figure contrasts sharply with a family trying to run the same size home but in Oxford (£1,480), Croydon (£1,496) and Cambridge (£1,712.58) respectively, illustrating the gulf in house running costs that spans the UK.

Graham Nicholls, head of home insurance at MORE TH>N, said “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 – spending most of their income before buying other regular necessities such as food, commuting, petrol or insurance.

 “With so little slack in the budget, it’s easy to imagine how one unplanned expense could prove to be unaffordable and we would encourage homeowners and renters to protect their home and possessions to guard against unexpected bills.  Having the right insurance in place, as well as keeping up with the wear and tear on your home, offer peace of mind and prevent bigger bills down the road.”

 he Association of British Insurers reports that one third of UK households do not have buildings insurance and one quarter do not have contents insurance – putting millions of households at risk for a large unexpected bill.

Nicholls continues “The insurance industry pays out over £8m a day for household claims but the cost of protection in terms of buildings and contents insurance is affordable – we offer a combined five-star product from an annual cost of £834.

The MORE TH>N Cost of Running a Home Report was compiled independently and the results show significant variations in the costs of running the same sized homes in 72 towns across the UK, contrasting the cost of average household bills plus payments for rent or a mortgage.

The report reveals an average fall in costs of 7% for those who own and 6% for those who rent when contrasted with 2016, but this statistical average masks strong regional differences. Greater London, the South East and most of the South West and Scotland all cost above a solitary national average wage income to run a three bedroom home:  

Examples of monthly costs above national average: 

Ø  Greater London – Croydon: £1,855.36 (own); Croydon £2,141.20 (rent)

Ø  South East – Eastbourne £1,836.13 (own); Basingstoke £1,714.32 (rent)

Ø  South West – Bristol £1,604.50 (own); Exeter £1,764.24 (rent)

Ø  Scotland – Aberdeen £1,744.25 (own);  Edinburgh £2,507.37 (rent)

 The 2017 report shows for 71% of people in the UK it’s cheaper to run a home if you own the property, rather than rent. The East Midlands is the only region in the UK where it is always cheaper to own than to rent any sized property, whereas in Greater London it’s only cheaper to own for 23% of homeowners. 

There are 29 towns across the UK where, irrespective of property size, owners spend less on their total bills than renters: Aberdeen, Antrim, Belfast, Birmingham, Boston, Bradford, Burnley, Carlisle, Exeter, Glasgow, Glossop, Leeds, Leicester, Liverpool, Manchester, Neath Port Talbot, Newcastle, Northampton, Nottingham, Paisley, Perth, Peterborough, Plymouth, Richmond, Scarborough, Sheffield, Stoke-on-Trent, Taunton and Welton.

Overall 89% of all homes, regardless of size, generate bills that are in excess of half of the mortgage or rent payment.

The cheapest monthly running costs for a one bedroom flat are £330.61 (owned) in Northern Ireland’s Omagh.  This contrasts sharply with £4,299.50 for a one bedroom owned flat in London’s Westminster. Conversely, the running costs for a four-bedroom detached house across the UK varies from £968.53 (rented) in Northern Ireland’s Omagh, £1,517.39 (rented) for Inverness, Scotland; £1,325.83 (rented) for Swansea in Wales and £1,940.15 (rented) for Leeds, West Yorkshire. 

In 2017, there are just two towns where you can rent and live for under £650 a month – a one bedroom flat and monthly bills in Omagh, Northern Ireland costs £592.04, and in Antrim £625.45.

For those with mortgages there were 15 towns where monthly outgoings were under £650 which has now fallen to 15: Aberdeen, Antrim, Barrow-in-Furness, Belfast, Bradford, Derry, Lisburn, Lowestoft, Neath Port Talbot, Omagh, Paisley, Scarborough, Stoke on Trent, Sunderland, Telford. This is down from 17 in 2016.

 

2017 MORE TH>N COST OF RUNNING A HOME REPORT

Own vs rent:

•           Across UK, it’s cheaper to own and run a one bedroom property than rent, with six exceptions: Cambridge, Norwich, Croydon, Richmond, Westminster and Blackpool

·       Regional variations stark – over one quarter of average wage earners cannot afford average home across UK –  (29% owners, 25% renters)

 Compared to 2016: 

•       Cost of running a home – irrespective of size – has risen in seven regions: East Anglia, East Midlands, Greater London, North, North West, South West and West Midlands.

•       Renters living in one or two bedroom flats across the UK pay more for their accommodation and household bills compared with those who have a mortgage – with just a handful of exceptions from the 720 properties analysed – this has not changed since 2016.

•       Two adults on the national average salary living in a three or four bedroom house in any region will pay almost half their monthly take home pay on household bills, rent or mortgage which is the same as 2016.  

•       In 2016 for those with mortgages there were 17 towns where monthly outgoings were under £650 which has now fallen to 15.

•       Rising rent and falling mortgage repayments in the last 12 months were revealed in the data. Thanks to falling mortgage costs, 28% of people pay less on their mortgage than their monthly bills. In comparison, 3% of renters spend more on their bills than their rent each month. 

Key regional differences:

1.     Northern Ireland: 

Cheaper to own than rent in every town across the region for all property sizes bar the four bedroom detached homes in Bangor, Derry, Lisburn and Omagh.  However overall more than a third of all homes in the Northern Ireland (34% all sizes) are more expensive to run in 2017 vs 2016.

2.     Scotland

For properties with one or two bedrooms costs have risen across the board in Edinburgh regardless if you own or rent and overall a third of all homes in Scotland (all sizes) are more expensive to run in 2017 vs 2016.

3.     Wales

Cost of running a two bedroom flat has risen for renters everywhere in Wales bar Cardiff (down 26.12%) – biggest increase was in Bangor up 38.83%.  Overall 48% of homes in Wales (all sizes) are more expensive to run in 2017 vs 2016. 

4.     West Midlands:

For one-two bedroom properties it’s always cheaper to rent than own anywhere in West Midlands. However, overall nearly two thirds of all homes in West-Midlands (65% – all sizes) are more expensive to run in 2017 vs 2016.

5.     East Midlands: 

The only region in the UK where it was always cheaper to own and run ANY size property rather than rent. 62% of homes in the East Midlands (all sizes) are more expensive to run in 2017 vs 2016.

6.     East Anglia

Cambridge and Norwich are just two of six towns in the UK where it is still cheaper to pay rent and bills for a one bedroom flat than have a mortgage. 55% of homes in East Anglia (all sizes) are more expensive to run in 2017 vs 2016.

7.     Yorkshire and Humberside

Cheaper to pay mortgage and bills than rent in any sized property across the region bar York.  However, overall 47% of homes in Yorkshire (all sizes) are more expensive to run in 2017 vs 2016.

8.     Greater London:
Croydon, Richmond and Westminster are just three of six towns in the UK where it is still cheaper to pay rent and bills for one bedroom flat rather than have a mortgage. More than half of all homes in Greater London (54% – all sizes) are more expensive to run in 2017 vs 2016. 

9.     South East

Cost of renting and running a four bedroom detached home have fallen everywhere across South East however, overall more than a third of all homes in the South East (35% – all sizes) are more expensive to run in 2017 vs 2016.

10.  South West

For those starting on the property ladder, cost changes were some of the lowest in this region for one-bedroom flats – all single digits rises or falls regardless if owning or renting.  However, overall more than half of homes in the South West (52% – all sizes) are more expensive to run in 2017 vs 2016. 

11.  North West: 

90% of all homes in the North West were cheaper to run for homeowners rather than renters, however overall more than half of homes in the North West (58% – all sizes) are more expensive to run in 2017 vs 2016.

12.  North

Cheapest property to run was a one bedroom flat in Sunderland – costs for owners were £606.20 contrasting with costs of £728.17 for those who rent. More than half of all homes in the North (52% – all sizes) are more expensive to run in 2017 vs 2016.

The 12 regions and their six towns featured in the report are:

East Anglia: Cambridge, Cromer, Ipswich, Lowestoft, Norwich and Peterborough

East Midlands: Boston, Glossop, Leicester, Northampton, Nottingham, Welton

West Midlands: Birmingham, Hereford, Stoke on Trent, Stratford upon Avon, Telford and Worcester

North West: Blackpool, Burnley, Chester, Liverpool, Manchester and Warrington

North: Barrow in Furness, Carlisle, Middlesbrough, Newcastle, Penrith, Sunderland

Yorkshire & Humberside: Bradford, Leeds, Richmond, Scarborough, Sheffield and York

South East: Ashford, Basingstoke, Colchester, Eastbourne, Oxford and Worthing

South West: Bournemouth, Bristol, Exeter, Plymouth, St Austell and Taunton

Greater London: Croydon, Enfield, Harrow, Redbridge, Richmond and Westminster

Wales: Aberystwyth, Bangor, Cardiff, Neath Port Talbot, Swansea and Wrexham

Scotland: Aberdeen, Edinburgh, Glasgow, Inverness, Paisley and Perth

Northern Ireland: Antrim, Bangor, Belfast, Derry/Londonderry, Lisburn and Omagh