Cost of running a household up 5% over the past year

The average cost of running a household in Ireland has reached almost €16,500 – almost half the average national wage – according to a newly-published report.

The AA’s ‘Annual Cost of Running a Home’ study has recorded a 5% increase on last year, which had been attributed to the significant rise in house prices nationally over the last year.

Director of Consumer Affairs with AA, Conor Faughnan said: “Our calculations are based on a typical Irish house and include costs for mortgage payments, energy and heating, repairs and maintenance.

“The recent surge in house prices affects the 2014 figures. This is partly off-set however by the fact that the typical Irish house has become more energy-efficient.

“The average price of a secondhand house in Ireland during the third quarter of this year was €193,000, up from €170,000 during the same period last year.

“As a result, those who a bought a home during July and September this year are shelling out just shy of €900 more per annum on average on their mortgage repayments compared to their counterparts who bought during the same quarter last year.

“While €900 is a stark increase, recent homebuyers are still dramatically better off each month on average than those who bought a home when property prices were at their peak in 2007.

“At that time the average national house price was €344,000, more than double current prices. As a result, those who bought their home during the peak on average hand over €5,580 more each year on their mortgage repayments alone than those who have recently bought a home,” said Mr Faughnan.

The AA calculates that it will cost €22,012 for those who purchased their home in 2007 to run their homes this year, €6,356 (39%) more than those who bought a new home in the third quarter of this year.

“While you’re locked into certain costs such as your TV licence, mortgage repayments and property tax you can certainly look for better value when it comes to the services you consume.

“When there are multiple players in the market – be it waste collection, electricity or insurance – they are all vying for your business so make sure to shop around and get a good sense of what each is offering,” said Mr Faughnan.

Arriving at the average figure of €16,432 for the year, the AA also factored in a fund for home maintenance and repairs, household cleaning products and the replacement of household appliances in accordance with their warranty periods.

In addition, the average costs of home phone and broadband, a basic digital TV package, the TV licence, the property tax and bin charges were also factored in.