Squeeze That Won't Ease: Pressure on Pockets from Running a Property

Oct 23, 2013, 04:00 ET from HomeServe

WALSALL, England, October 23, 2013 /PRNewswire/ --

Latest HomeServe Cost of Homeownership Index reveals continuing squeeze on family finances

  • Just 4% have seen the pressure on their pockets ease
  • Eight-point increase in those unable to pay for any unexpected outgoings
  • Brits have just £110 available in their accounts at the end of the month - and 15% have nothing

Millions of Britons are finding the price of running a property increasingly unaffordable despite their best efforts to cut the cost of living and of homeownership, new research reveals.

HomeServe released the latest figures from the Cost of Homeownership Index - a major longitudinal study of household costs and expenditure and homeowners' attitudes towards them- revealing that over one in three homeowners (36%) are finding it more difficult to run their property compared to the start of the year, with fewer than one in 20 (4%) feeling things have improved as 2013 has progressed, despite cautious talks of an economic recovery.

The extent to which household finances are being stretched is laid bare by the average Briton having just £110.03 available to them at the end of the month - a figure which includes any overdraft available to them. One in seven ends the month with no money whatsoever available in their bank account, a figure which rises to one in five 25-34-year-olds (19%).

As a consequence, nearly one in two homeowners (45%) admits they would be unable to pay any unexpected emergency outgoings in the coming three months - an eight-point increase from the start of the year.

Behind this is the fact that one in three homeowners (30%) has not had a pay rise in the last three years or more, with the majority of those who have enjoyed one (57%) having below-inflation increases of two per cent or less.

At the same time, seven in 10 (68%) believe that prices have been rising faster than their wages and a significant proportion of Britons have had their incomes stretched to the point where they cannot be stretched further. A third (35%) have struggled to cut their cost of living this year, with a similar proportion (32%) finding it harder to make ends meet as the year has progressed and two fifths (39%) saying they would struggle to cut outgoings any further.

A small wonder that 49% are worried about the cost of bills this winter - and that 33% could not afford to take a holiday this summer.

Britons' lack of an emergency fund means that one in six homeowners (16%) have had to delay paying for home emergency work needed on their property because they were unable to afford it. No fewer than six in 10 (62%) currently have no funds set aside for an emergency, with a fifth (20%) having to take out a loan from friends and family, the bank or even a payday lender, and one in seven (13%) putting it on a credit card.

HomeServe Memberships CEO Jonathan King said: "It's startling to see that the cost of living and of homeownership has so outstripped people's incomes that millions have to live from pay cheque to pay cheque, without any buffer to turn to should the worst happen.

"In such circumstances, a large unexpected outgoing can easily push people over the edge. With the average cost of a boiler repair, for instance, more than £300, a £48 annual insurance policy can provide peace of mind and save hassle and hardship."

Advice to cut the cost this winter:

  1. More radiant radiators

To make your radiator more effective, put aluminium foil between the radiator and the wall. This acts as a heat reflector instead of allowing it to pass straight through the walls. If you have high ceilings, shelves above the radiator can also help.

  2. Get on your high horse

Use a clothes horse instead of drying your clothes on the radiator directly, stopping heat reaching the rest of the room and also making the boiler work harder to reach the desired temperature, increasing the amount of energy used.

  3. Don't touch that dial

If your home is cold first thing in the morning, turning up your thermostat to a higher level won't make it heat up more quickly. Instead, set the boiler to come on a little earlier, this will use much less energy.

  4. Be ECO friendly

The Energy Company Obligation was introduced this year to help reduce the amount of energy we use and help those living in fuel poverty. It provides a series of grants to people in certain circumstances and postcodes for insulation and more efficient boilers. Visit your energy company's website to find out if you're eligible.

  5. Get it covered

If your boiler breaks down in the middle of winter, as well as the discomfort of being without heating and the hassle of finding a tradesman, putting things right can also be costly - the average price of a repair is more than £300 according to uSwitch. Boiler cover can cost just £48 a year and currently includes a free service, which can help find problems before they strike.

  6. And shop around

Many people use the heating cover provided by their gas company. But there are other options on the market - the savings calculator on HomeServe's website (switch.homeserve.com) will show just how much you could save - and on-line purchases of HomeServe's Cover 8 currently comes with £100 cashback. (Subject to Terms and Conditions)

Notes to editors:

1. Findings based on research by Canadean Consumer on behalf of HomeServe, August 2013, among a representative sample of 2,005 UK adults.

2. HomeServe Membership Limited, is authorised and regulated by the Financial Conduct Authority (FCA) for insurance mediation activity.

About HomeServe

With over 2,700 directly employed and sub-contracted engineers, Homeserve is a national emergency home repair service backed by a 24 hour claims handling and repair network

HomeServe's new tradesmen service provides households with access vetted tradesmen who are qualified to carry out hundreds of different jobs around the home

HomeServe also offers insurance cover for plumbing, drains, electrical wiring and gas central heating.

SOURCE HomeServe