If you have never lived in your own home, it is often difficult to know how much you will need to budget for utility bills and it is not uncommon for people to get a surprise when they get their first bill. Running a home can be expensive, so Propertyable has looked at the average […]
Lisa Best
24 January 2023
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If you have never lived in your own home, it is often difficult to know how much you will need to budget for utility bills and it is not uncommon for people to get a surprise when they get their first bill. Running a home can be expensive, so Propertyable has looked at the average cost of running a house and the cost of utility bills in the UK.
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Many factors will influence how much you pay on utility bills each money, such as location, usage and the size of your property. There are some standard bills that you will pay as a homeowner and others that are optional. For some, it is possible to search for deals, for others there are fixed charges.
The average costs when running a house in the UK are:
Mortgage or rent is likely to take up the largest proportion of money you will spend on bills. Mortgage repayments are usually taken on the first day of each month. Fixed-rate payments will be the same each month, but if you have a variable rate or tracker mortgage product, your monthly payments can vary in line with interest rate changes. Rent payments will depend on what has been agreed with your landlord.
The average UK house price in November 2022, according to ONS, was £295,000. Assuming a 10% deposit of £29,500, the mortgage amount taken would be £265,500. The monthly mortgage repayment at a rate of 4.5% over a 30-year term would be £1,345.
Council tax will be payable if you own a property or rent it (unless your tenancy type means the landlord pays it). It is payable to the Local Authority where you live and is usually paid monthly, quarterly or annually. The amount of council tax payable is depended on what council tax band the property falls into. For example, if you have bought a house which has been extended to add more bedrooms, your property may now fall into a higher council tax band than your neighbour’s. There are some exemptions and discounts available on Council tax. For more information on this, we would suggest to visit the website of your Local Authority.
The average UK council tax annual bill in 2023 is estimated to be £1,493, or £149.30 paid over 10 months.
The main utilities are gas electricity and water and when you move into a new home you will usually already have a provider that the last owner had. Be sure to find out who the provider is and, if you want to go with a different provider, inform all parties.
Gas and electricity can be paid for together, under a single account, or, if you prefer, you can have a different provider for each. Household bills are usually payable monthly, quarterly or annually. If you move into a home with a pre-payable gas or electricity meter, you will have to pay in advance for usage. Often this can work out more expensive. You can change from a pre-pay meter to a direct debit by contacting the provider. You will likely have to submit regular meter readings to your provider for an accurate bill calculation.
Many homes now have smart meters installed. Smart meters measure how much gas and electricity you’re using via a remote connection to your energy supplier. They come with a home display screen, so you can track how much energy you are using.
The Government’s Energy Price Guarantee Scheme is essentially an energy price cap that means that the average energy bill for a customer on a standard variable tariff will be no more than 34p per kilowatt hour for electricity and 10.3p for gas. The scheme essentially protects customers from increases in energy prices by limiting the amount suppliers can charge per unit of energy used.
At those rates, a household with typical energy use will pay £2,500 for average gas and electricity a year, or £208 per month. However, it is important to note that these rates are only for an average energy bill and may differ according to where you live and how you pay. It is also worth noting that energy bills will still be lower for a well-insulated home that uses less energy than a home that has less energy efficiency.
Other tips for saving on gas and electricity bills are to turn off appliances when not in use, install modern heating controls to time usage, turn the heating down, draught proof and use low energy settings on your washing machine. For more information on the cost of a home, and appliances check out our guide.
Suppliers of water differ according to the region and you have no choice of provider like you do with gas and electricity. You can get a bill for what you use or a set monthly amount, estimated on your property size and occupants, paying by direct debit. The average cost for water & sewage in the UK is £34 per month.
Some tips for saving on water usage include putting a full wash on instead of several small ones, installing a more efficient shower head and installing a water meter.
Insurance cover is a must when buying a house and most lenders will want to know this is in place before the transaction takes place. This is to ensure that the building is covered for the rebuild cost. Contents insurance is not required for a house purchase, but when you add up the cost of all your possessions, it is worth weighing up whether you would be prepared to foot that cost. When renting. Your landlord will likely have landlord insurance, but this will not cover your belongings, therefore it may be worth getting tenants insurance.
The average cost for buildings and contents insurance in the UK is around £30 per month.
There are many options for wi-fi these days so shopping for a good deal and even negotiating with providers is possible, but having a good wi-fi connection is often now regarded as a necessity, especially with more people working from home. Apple TV, Netflix, Disney+ and Prime are all streamed via a wi-fi connection. Average new customer broadband deals as of January 2023 were around £25 per month.
Even if you do not use a landline phone, you will still need one to be active for your wi-fi connection. Average UK landlines cost around £20-£30 per month.
If you want to watch traditional TV channels you will need a TV license. This is payable annually, quarterly or monthly and costs £159, £41 a quarter or £13.25 a month.
You may have to apply for a parking permit for street parking, depending on where you live. The costs of a parking permit may vary according to where you live and what vehicle you have.
As an example, the average monthly cost of a residential parking permit in Islington as of 1st February 2023 ranges from £8.33 to £58.33 per month.
Food shopping is one of the monthly costs that you have more control over adjusting to save money. For example, supermarket own brands are often less expensive than well-known brands. How you shop and how often can also influence your bill’s size. ‘Nipping’ to the shop daily and not having a list can often cause you to spend more on non-essentials than doing one shop per week and having a list and sticking to it.
The average cost of food shopping for one person in the UK is around £44 per week or £189 per month. The average monthly grocery bill for a family of 4 is around £550.
Although optional, many people now pay for TV streaming services including Netflix, Disney+ and Prime. A standard Netflix plan costs £10.99 per month, Disney+ £7.99 per month and Amazon Prime £8.99 per month.
Service charges essentially cover maintenance of communal areas such as gardens and corridors, so are common when buying apartments. Ground rent is payable on leasehold property and is usually an annual fee.
The average service charges in the UK range from £1,800 to £2,000 per year.
Energy bills have risen in recent months due to the wholesale price of gas, but poorly insulated housing stock is also a contributing factor to energy bills in the UK. The UK is now in a cost of living crisis with current inflation around 9.2%. However, understanding what it is likely to cost you before you move into a property enables you to prepare for moving into your own home and not get any unwanted surprises. The costs in this article represent average and your own home may fall below or above these costs.
If you have any questions about home costs, please get in touch with Propertyable today. For more information about buying a house as a first-time buyer, follow this link to learn more.
From mortgages and insurance to viewings, offers, exchange and completion, our Buyers’ Guide will take you through everything, step by step, from start to finish.
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