Energy bill rises should give pause for thought before buying a period property - Sarah Coles

I live in a town with an awful lot of really stunning Victorian mansions and when I leave my ugly 1960s semi-detached house and walk past them, all I can think about is the gas bill.

Well, that and the size of the stepladder required to change a light bulb.

It's easy to assume that people who can afford to live in such lovely homes can afford to heat them but that’s a gross over-simplification.

Nationwide crunched the numbers on it this week.

Right now, after April’s horrible hike in the energy price cap, things are bad enough for people living in the most energy-efficient properties (rated A-C), who now pay an average of £1,700 in energy bills.

However, for those in the least efficient (rated F-G), they’re horrendous – with average energy bills of £3,900. That’s £325 a month.

After the hike in October, that’s going to look like small change.

Energy bills for the average property (rated D) will rise by £1,250 (even after you take account of the £400 discount being paid in instalments from October).

Those rated A-C face a £1,000 rise, those rated E will see bills rise £1,700 and those rated F-G face an extra £2,700 a year. That’s an eye-watering bill of £550 a month for the least-efficient homes.

The Office for National Statistics looked at the kinds of properties that tend to fall into each energy-efficiency category and discovered that the age of a property is the single biggest factor.

Almost all homes built since 2012 in England and Wales have a high energy efficiency rating – compared with 12 per cent of those built before 1900 in England and 8 per cent of those the same age in Wales.

The next most important factor is size.

Flats and maisonettes are most likely to be in the most efficient bands and detached homes are the least likely to be. It means that big, detached, older homes are costing people dear.

On average, more people live in older properties in Yorkshire than elsewhere in England – with 16 per cent of properties built before 1900.

It’s a figure only beaten by the North West, South West and London.

Meanwhile, fewer live in the most energy-efficient homes – only 38 per cent in Yorkshire, compared with 42 per cent overall.

If you’re planning to buy a period property, it should give you food for thought.

And it’s not just the energy bills you need to worry about.

Because so many people want to buy a beautiful old home, you’ll pay a premium for them compared to something less desirable.

The price of houses is still growing faster than the price of flats too, so a big, older property is going to mean hefty monthly mortgage payments.

If you’re already a proud owner of a home like this, then if you have a mortgage, you also face the fact that mortgage rates are rising.

If you’re on a variable-rate deal you’ll feel the squeeze every time the Bank of England raises rates.

And while the vast majority of people are protected by fixed-rate deals, if you’re coming to the end of one right now, it’s another financial shock to bear.

The average rate on a two-year fixed-rate mortgage is currently over two percentage points higher than it was two years ago and the average rate on a five-year fixed-rate mortgage is 1.5 percentage points higher than five years ago.

For older people, who have already paid off the mortgage, energy prices are the real horror show.

They tend to spend longer at home than people of working age and, in some cases, being less mobile around the home means feeling the cold more too.

Research by the University of York shows that 86 per cent of pensioner couples in the UK could be in fuel poverty by January 2023.

The impact of living in a cold home goes way beyond the financial aspects.

Hypothermia is the most well-known and terrifying threat but it’s not the only problem. Being cold can raise blood pressure and thickness, which increases the risk of heart attacks and strokes.

It may also encourage people to move less once they’ve found a warm spot, which affects flexibility and can make symptoms of arthritis worse – which can put them at a higher risk of falls.

We’re still waiting for an announcement from the Government to find out exactly what help is going to be forthcoming for people facing the brunt of energy price rises.

There has to be more help for older people and those living in homes which risk becoming dangerously cold.

It’s miserable that we’ve had to wait so long, and worry so much, while the political wheels have been turning at a glacial pace.

So when the new Prime Minister is announced on Monday, they can’t afford to hang about.

We need decent support for those who need it, and we need that support now.

Bad news on the cards

Credit card borrowing grew atits fastest rate for 17 years in July, according to the Bank of England.

Horrible hikes in the cost ofliving mean more people arerelying on their credit cards to make ends meet – and this is just the start of it.

Our research shows that thoseon higher incomes are far more likely to have lockdown savings to fall back on to cover any shortfall.

It also shows that those on the lowest incomes simply can’t borrow more, so their problem debts are likely to emerge as missed bills rather than card borrowing.

It's the middle earners who are increasingly relying on credit cards to help make ends meet. And while borrowing to close the gap is a temporary fix, it’s no real solution.

More than two-thirds of UK parents are worried about paying for food, energy and fuel over the next year and are being “pushed to the edge”, separate recent research has suggested.

Parents described feeling “overwhelmed”, a “let-down” and a “failure” as cost-of-living pressures make it increasingly hard for them to afford essentials, research for Nesta found. More than half the parents surveyed were worried about affording their rent or mortgage payments (58 per cent), credit card and personal loans (53 per cent) and childcare (52 per cent).

Over time, your mounting debts are only going to add to your problems. It’s worth noting that we haven’t yet amassed impossible levels of debt overall.

We currently have £62 billion of borrowing sitting on our cards, compared to £72 billion before the pandemic.

However, card debts have climbed significantly from the pandemic low point in March 2021 (£54 billion) and borrowing is likely to keep building as times get even tougher.