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The costs of owning a home falls dramatically.

The cost of owning and running a home in the UK has declined by six per cent over the past two years, according to new research by Halifax.

Between April 2008 and April 2010, the average annual cost associated with owning and running a home fell by pounds 544 from pounds 9,564 to pounds 9,020 - in the West Midlands it was even lower with the cost falling to pounds 8,114.

In real terms, after allowing for retail price in.ation, the cost of housing has fallen by nine per cent. Housing costs in the UK are now equivalent to 27 per cent of gross average full-time earnings, down from 30 per cent in 2008.

The fall in the cost of housing since 2008 has been driven by a 19 per cent (pounds 881) decline in mortgage payments (interest and capital repayments). The average mortgage rate paid by existing borrowers fell by 2.13 percentage points between April 2008 and April 2010 from 5.80 per cent to 3.67 per cent.

Regionally, London (pounds 11,762) and the South East (pounds 10,457) have the highest average annual costs of owning and running a home. Housing costs are lowest in Northern Ireland (pounds 7,331).

Home owning and running costs as a percentage of gross average full-time earnings are lowest in London (24 per cent) despite the capital having the highest absolute costs. However, with the level of earnings varying considerably across the capital, housing costs will be much less affordable for a signi.cant number of households. Housing costs are highest in relation to earnings in the East of England (31 per cent).

Over the past year, the average expenses associated with owning and running a home have increased by 1.3 per cent (pounds 116). This is less than a third of the rise in retail prices (5.3 per cent).

Suren Thiru, housing economist at Halifax, commented: "Over the last two years, the cost associated with owning and running a home in the UK has fallen, entirely as a consequence of reduced mortgage payments.

The drop in housing costs has helped to ease the strain on household's .nances, providing some relief to homeowners during the economic downturn."
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Title Annotation:Features
Publication:The Birmingham Post (England)
Date:Jul 1, 2010
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