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Last Updated: Saturday, 13 August 2005, 01:05 GMT 02:05 UK
Household bill costs 'rise by 5%'
Council tax bill
Households will face higher council tax bills in coming years, Halifax says
UK household bills have risen by more than four times the rate of inflation as a result of surging council tax bills, a study by the Halifax says.

According to research based on data from the Office for National Statistics the annual cost of running a home rose 5% to an average 5,948 for 2003/4.

During 2004, the rate of inflation was just 1.1%.

But council tax costs surged 11% to 921 on average, accounting for 30% of the overall rise, the bank said.

"The cost of owning and running a home has increased much faster than the rate of inflation," Tim Crawford, Halifax group economist, said.

Unsurprisingly London was the most expensive region with homeowners paying an average 7,691 annually to own and run a property.

That compares to just 4,358 in the North East - the cheapest region, and the UK average of 5,948.

Rates pressure

"Council tax continues to be a key driver of rising housing costs, while in the past year higher mortgage servicing costs have also been important," Mr Crawford added.

Until earlier this month the Bank of England had been engaged in a cycle of interest rate tightening, which saw the cost of borrowing hit a high of 4.75%, in turn leading to higher repayments for mortgage holders.

As a result mortgages made up the single largest expense for homeowners in 2003/4 at an average 1,795 - or 30% of household costs.

With rates holding steady at 4.75% for 12 months since August 2004, Halifax has estimated that the average cost of running a home rose by 6% in 2004/5 to 6,303 - mainly driven by higher mortgage and council tax costs.

However, the Bank's recent decision to cut rates to 4.5% should lead to a "likely fall in mortgage servicing costs" in coming months, the Halifax said.

As a result it expects household expenditure to rise by just 2% in 2005/6 to 6,406, with falling mortgage costs partially offsetting rises in council tax and utility bills.




SEE ALSO:
Subdued market hits house prices
08 Aug 05 |  Business
Consumer inflation climbs to 2%
12 Jul 05 |  Business
Homes reassessed for council tax
01 Apr 05 |  England
Water bill rise comes into force
31 Mar 05 |  Business
Regulator agrees power price rise
29 Nov 04 |  Business
Consumers 'struggle to pay bills'
25 Oct 04 |  Business


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