Households across the UK are feeling the pinch of the ongoing cost of living crisis, with fresh warnings that fuel bills could exceed mortgage repayments.
Experts have warned that utility payments will match and in some cases, be more than the fees paid for their mortgage.
This could become a grim reality in the New Year, as energy prices quadruple in the space of six months.
Advert
A forecast made by Auxilion says energy bills could cost an eye-watering £6,823 per year for the average household by next April, which equates to approximately £569 a month.
The crisis is laid bare when considering the average annual energy bill was £1,400 in October last year.
Data from trade body UK Finance revealed that homeowners with fixed-rate mortgages will pay £741 a month on average, meaning the difference between mortgage and energy costs could only be £172.
Advert
However, for those with a standard variable rate (SVR) mortgage, whose average payment is £516, they could end up paying £53 more on heating their home than their mortgage, in what would be a watershed moment in this crisis.
Those with tracker mortgages, which are aligned alongside the Bank of England’s base rate, will have £50 added to their current costs.
People that rent are also facing soaring prices, with estate agents Hamptons reporting the average monthly cost of a newly-let property reached £1,166 in July. This figure increases to a staggering £2,008 for Greater London.
Incredibly, the price of an average two-bed home at £1,068pcm is now the cost of what you would pay for the average three-bed property 16 months ago.
Advert
Meanwhile, the price of £929pcm is now what you would get for an average one-bed property – the cost of a two-bed two years ago.
The banking sector is taking steps to mitigate the effects of the crisis, with Lloyds Banking Group saying it had put aside £377million to cover loan losses, while Barclays has done the same to the tune of £341million.
It is a situation which has been laid bare by Citizens Advice, with Chief executive Dame Clare Moriarty, saying: “Every single day at Citizens Advice we’re already helping people in the most heartbreaking circumstances, trying to scrape together enough to feed their kids and keep the lights on. This will get far, far worse unless the Government acts.
Advert
“It’s becoming increasingly clear that skyrocketing prices will swallow up all of the help that has been announced so far.”
Ahead of the colder winter months, families may have to choose between 'eating and heating', with the UK government being urged to act swiftly to mitigate the situation.
James Hilsum