01 August 2009 Credits: www.skynews.com
Recession Leaves Homeowners Better Off

Homeowners are 25% better off this year compared to 2008, due to low interest rates which have slashed mortgage costs.

Householders have more cash to spend on enjoying themselves



Research by Ernst and Young shows that homeowners have on average £1,075 left every month after meeting all of their fixed costs, such as utility bills.

Jason Gordon, of Ernst and Young, said: "Even though we're still in recession, many UK householders who have not been hit by unemployment have experienced a dramatic upturn in their monthly budgets over the last year."

Household costs fell by 8% in the last 12 months, as reductions to the base rate cut monthly mortgage repayments.

An average mortgage repayment, based on a 25-year loan on a standard variable rate, fell by 20% over the past year, with the average homeowner paying £553 a month.









Despite the falls, some household bills have continued to rise, with council tax increasing by around 3% and public transport costs 6% higher.

Mr Gordon said: "Although a typical consumer with a mortgage may now have more money to spend on a monthly basis, the sharp house price declines of the last 12 months have significantly eroded their overall wealth."

Energy bills remained 53% higher than they were five years ago, despite electricity and gas prices falling by 8% and 5% respectively from their peak last year.

The research revealed that many consumers were using their increased disposable income to pay of debts or increase spending, rather than spending the money.