Mortgagor owner occupier households had the highest annual inflation rate of 6.3%, reflecting increasing home loan interest payments, the Office for National Statistics said
Households with a mortgage faced the biggest rise in costs in the year to December 2023, reveals new data.
Mortgagor owner occupier households had the highest annual inflation rate of 6.3%, reflecting increasing home loan interest payments, the Office for National Statistics said.
UK household costs, as measured by the Household Costs Index (HCI), increased 5% on average, down from 8.3% in September 2023, with housing the biggest contributor.
By comparison the Consumer Prices Index (CPI) increased 4% in the year to December 2023.
Like CPI, HCI tracks the price of goods and services consumed by all households in the UK, but also include changes in mortgage interest rates, stamp duty and other costs related to the purchase of a house or flat.
Private and social renters experienced similar rates of inflation since October 2023, dropping to 4.9 and 4.8% respectively in December 2023.
The annual rate for outright owner occupier households dipped below private renters in October 2023 and remained the lowest of the tenure types in December, at 4%.
The Office for National Statistics said private renters had the lowest cumulative rate in the four years to December 2023, of 21.2%, compared with between 24.8% and 26.4% for other tenure types.
The ONS said that groups who spent a higher proportion of their basket on mortgage interest payments, or a lower proportion on electricity, gas, and other fuels where prices were dropping, saw higher annual inflation rates.
Those with lower inflation rates were more affected by food and drink, and recreation and culture, but this was offset by dropping energy prices.
The annual inflation rate for high-income households (decile 9) increased 5.6% compared with a rise of 4.5% for low-income households.
Nonetheless, this does not take into the account the cumulative effect of sustained high prices.
While high income households experienced the highest annual rate of inflation in the most recent three months, their costs over four years were 24.5%, while low-income households had a cumulative rate of 25%.
