According to a new report from the Halifax, the cost of owning and running a home in the UK has declined by 6% over the past two years – good news for relocating families. The fall has been driven by the decrease in mortgage payments brought about by lower interest rates.

Between April 2008 and April 2010, the report says, the average annual cost associated with owning and running a home fell by £544, from £9,564 to £9,020. In real terms (i.e. after allowing for retail price inflation), the cost of housing has fallen by 9%. Housing costs in the UK are now equivalent to 27% of gross average full-time earnings, down from 30% in 2008.

The fall in the cost of housing since 2008 has been driven by a 19% (£881) decline in mortgage payments (interest and capital repayments). The average mortgage rate paid by existing borrowers fell by 2.13 percentage points between April 2008 and April 2010, from 5.80% to 3.67%.

Regionally, London (£11,762) and the South East (£10,457) have the highest average annual costs of owning and running a home. Housing costs are lowest in Northern Ireland (£7,331).

Home owning and running costs as a percentage of gross average full-time earnings are lowest in London (24%), despite the capital’s having the highest absolute costs. However, with the level of earnings varying considerably across the city, housing costs will be much less affordable for a significant number of households. Housing costs are highest in relation to earnings in the East of England (31%).

Over the past year, the average expenses associated with owning and running a home have increased by 1.3% (£116). This is less than a third of the rise in retail prices (5.3%).

Suren Thiru, housing economist at Halifax, says, "Over the last two years, the cost associated with owning and running a home in the UK has fallen, entirely as a consequence of reduced mortgage payments. The drop in housing costs has helped to ease the strain on household's finances, providing some relief to homeowners during the economic downturn."