Costs of running your home soar as energy bills rocket
The cost of owning and running a home in the Westcountry has reached its highest level in four years – putting household budgets under increasing strain.
Soaring energy bills were mainly to blame for yearly household bills in Devon and Cornwall peaking at £9,310 in January of this year – a 2.7 per cent annual rise and the highest figure since 2008.
The figures from the Halifax showed the region was the fourth most expensive in the country behind Greater London, the South East and the East of England. They do not account for the additional financial costs of living in rural areas such as the high price of motoring.
Bob Drabwell, chairman of Cornwall Senior Citizens Forum, said many costs were on a "runaway train".
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"Energy bills are almost out of control," he said yesterday. "The weather hasn't been too bad but if it suddenly got worse we would back to the old question of do you heat or do you eat because you can't afford to do both.
"People are not cutting back on luxuries, they are cutting back on essentials. Prices are on a runaway train and we can't stop it. The whole thing is out of control."
The report by the Halifax, based on a range of official statistics and surveys, showed a 89 per cent of the total rise over the last year came from an average £218 hike in gas and electricity bills – deepening the problem of fuel poverty which is already acute in many areas of the region.
Electricity and gas bills have risen by 145 per cent over the last decade and at £1,653 a year they take up almost a fifth of household costs, accounting for the second biggest share of expenses, having overtaken council tax, which takes up 15 per cent of outgoings.
Household budgets have also come under intense pressure from high inflation which has driven up other living costs – exacerbated in areas like Devon and Cornwall where housing costs are high and wages low.
One effect has been the rapid growth of foodbanks in the region, which are distributing tons of food to those in need every month.
The fledgling Bideford Foodbank is already taking referrals but needs to find premises in the area before it can help.
Volunteer Terry Thorpe said people were being referred from all walks of life, not just the unemployed, and fears demand could grow further with changes to benefits for working families.
"I think that is going to have an enormous impact," she said. "There is a very big take up of working tax credits in this area because of low wages. How are they going to cope?
"It will come down to heating, eating or buying the kids a new pair of shoes. Something has to give. We live in one of the most expensive areas of the country but we don't have the wages to support it."
The Halifax report showed that since the peak of the housing market, mortgage payments have dropped as a share of housing costs over the last four years from nearly half (48%) to just over a third (37%) by January this year, although they still take up the biggest chunk of expenses.
Typical annual mortgage payments have dropped by 23 per cent or more than £1,000 over the past four years, to £3,485 in January this year, due to falls in mortgage rates as well as flat house prices.
Several lenders have also cut the amount people can borrow on an interest-only mortgage, while many have recently announced mortgage rate rises which will affect more than a million borrowers in total, blaming the increased cost of funding a mortgage.
Martin Ellis, housing economist at Halifax, said: "The typical cost of owning and running a home has increased over the past year, returning the overall level to that of four years ago.
"This has happened despite the substantial fall in mortgage payments over recent years, as all the other costs associated with home ownership have risen.
"The prospect of declining consumer prices inflation through much of 2012 may help the costs associated with running a home to ease as well, providing some welcome relief to homeowners."