House upkeep costs creep forward

According to economists the cost to run and own a home in Scotland has increased by £116 in the year to March. Mortgage payments have fallen but the increase in repairs and the cost of energy has increased overall by 1.4% to the average of £8,600. Costs were lower than three years ago Bank of Scotland research showed because of the reduction in the mortgage rates but that amounted to only about a £159 average.

This fall is smaller than in any of England but bigger than Northern Ireland or Wales. The cost of owning and running a home in London dropped by almost 6% which can be explained because of the high share spent on mortgages from household income.

The overall cost of mortgages with the lowered interest rates and capital repayments has fallen by over 21% to about an average of £796. That fall continue to March with a fall of over 3%. Nevertheless other costs have increased by 13% in three years to March including inflation putting up by 10% the average prices.

The fastest of any household cost to increase are the gas and electricity bills with a 19% increase since 2008. Maintenance and repairs increased by 17%. In the three years, the cost of renting a home has increased by 10%.

Earnings growth is quite weak and that makes it difficult for household finances to not be overly strained at this time. The utility bills increase has added to the strain as well as maintenance costs.

Glasgow University reported on the housing market and has called for the need of fundamental and urgent reform in the housing market in order to avoid the ups and downs of rollercoaster boom and the bust.

Lenders should be pressured to lend responsibly and take more time and steps to ensure the borrowers are aware of what they have to pay and better know what they really can afford. The report also seeks reforms in mortgage insurance, including the government and lenders to prepare to meet mortgage payments if borrowers have lost income because of redundancy or illness.