Cost of running a home falls by 14%

The cost of running a home has fallen by nearly 14% during the past two years on the back of record low interest rates, research suggested today.

The average home now costs £8,059 a year to run in terms of mortgage repayments, utility bills, council tax and maintenance, £155 a week or £22 a day less than in 2008, according to Sainsbury's Home Insurance.

The main factor driving down the cost of running a home is a significant fall in mortgage repayments, which account for 43% of household expenditure, following the steep falls to the Bank of England base rate since October 2008.

Typical annual mortgage repayments are now 28% lower than they were two years ago at £3,466.

There has also been a fall in the amount people spend on gas and electricity, with these bills falling by 9% and 6% respectively during the past two years.

But there has been an increase in all other areas of expenditure, with the cost of maintenance and repairs, and alterations and improvements both increasing by 6%, while council tax bills are 5% higher than they were two years ago and water bills have increased by 3%.

After mortgage repayments, the biggest cost of running a home is council tax, which averages £1,439 a year, followed by home improvements at £1,216 and gas and electricity bills at £757 and £446 respectively.