Household costs eased to 4.4% in the year to March, from an annual rate of 5.3% at the start of the year, according to official data, although the cost of living was higher for those with mortgages.
Those with home loans had the highest annual inflation rate of 5.5%, “reflecting rising mortgage interest payments,” says the Office for National Statistics Household Costs Index.
The report says mortgage interest payments jumped 36.1% in the year to March, while electricity, gas and other fuel prices fell by 18.3%.
By contrast, the rate for outright owner occupiers was the lowest, at 3.3% in the period.
It says: “Those groups who spent a higher proportion of their basket on mortgage interest payments saw higher annual household cost inflation rates than those who spent a greater proportion on household energy bills.
“As a result, higher annual inflation rates were experienced by non-retired households and mortgagor households, while outright owner occupiers had the lowest rate across tenure types.”
Household inflation for private tenants was higher than social renters over the period, at 4.6% and 4.3%, respectively, “following a period between October 2023 and January 2024, where the two groups had similar inflation rates”.
However, a year ago household inflation for private renters ran at 10%, while social renter’s costs stood at 13.1%.
Last week, the headline rate of inflation fell to 2.3% in the year to April from 3.2%, according to the ONS, reflecting reductions in gas and electricity prices, which partially offset an upward contribution from motor fuels.
