The cost of keeping a roof over our heads has raced ahead of inflation to top £10,000 a year for the first time, a study has found. Rising council tax and utility bills, along with soaring mortgage repayments, mean the average householder is now paying 16 per cent more than two years ago.

The figure is way ahead of the official inflation rate over that time of around 2 to 2.5%. It led to calls for vulnerable groups such as the elderly - whose pensions are inflation-linked - to be given greater help to pay their bills.

The two-yearly study, by Sainsbury's Bank, looked at the cost of mortgages, utility bills, council tax, insurance, maintenance and improvements.

It found that the annual total rose £1,389 since 2003/4, taking the figure to £10,048. The biggest proportion is spent on mortgage repayments which, driven by biggerloans to pay for rising house prices, have risen 17.3 per cent to £5,928.

And the average council tax bill, based on figures from the Office of the Deputy Prime Minister, is up 16.2 per cent to £1,056.

Rises in utility bills have been particularly punishing. Gas bills have gone up 58%, taking the average to £522 a year, and electricity bills are up 32% to £338. Water and sewerage bills have also been rising, with the average up 17.6% to £294.

Pensioners' groups say the increase in utility bills has hit the elderly especially hard. They say the fact that pensions are linked to the Government's official inflation rate fails to recognise the real increase in the cost of living for millions of OAPs.

Age Concern director Gordon Lishman said: 'The Government should increase the state pension so that pensioners have enough money to cover basic living costs such as heating their homes.All older people should be able to heat their homes without being worried about the bills they're likely to face.

'Many pensioners live on a low, fixed income and are hit particularly hard by hikes in their fuel bills.'

The Government uses two main measures for inflation, the Retail Price Index and the Consumer Price Index. The RPI is used as the benchmark for benefits and pensions. The CPI is the Government's favoured measure for the cost of living.

All the items listed in the Sainsbury's Bank survey are included in the RPI basket. The CPI does not mortgages or council tax.

The study suggests that the combined impact of the rises is affecting how much householders can afford to spend on maintenance. It found the spending on a property in this area had fallen 8 per cent to £393.

This has had an impact on the high street, especially among many DIY retailers, where profits have collapsed, stores have closed and thousands of jobs lost.

 

Copyright © 2005 First Mortgage Trust