The monthly costs of homeownership – Essential bills you can’t ignore in the UK

Like the inevitability of death and taxes, running a home in the UK has several unavoidable expenses you must factor in while budgeting for the month. While some may be variable and economised by adjusting consumption habits, the bulk will most likely be a fixed amount you must put away monthly. Let’s look at some of the most common bills homeowners pay in the UK.

Mortgage repayments

Mortgage instalments are among the biggest payments for families or individuals who have bought homes with loans. While most financial experts suggest not spending more than 28% of income on mortgage payments, in cities like London, Nationwide reported mortgage payments sometimes going as high as 40% of the family income.

First-time buyers usually pay the highest share of their income in mortgage payments. The monthly amount will depend on how much you’ve borrowed from the lender and the repayment terms, such as fixed-rate, variable rate or interest-only options. Use our mortgage calculator to understand how much you will likely pay for a property.

Council tax

Every residential postcode belongs to a specific council that provides essential services like road infrastructure, waste collection, maintenance of public parks and other amenities. As a homeowner, the value of your property will determine your tax band, which usually ranges from A (least tax) to H (highest tax).

D is the mid-range tax band, and according to Gov.UK, the average annual payment for this band is £2,171, which comes to an average tax bill of £180 per month. Your local property agent can help you calculate your tax band and update you about the discounts you can avail of.

Utilities – Gas, electric, water and broadband

As of April 2025, according to Uswitch, the average annual electricity bill in the UK is nearly £730, while the average gas bill is around £804 per month. These figures have been calculated on average consumption and exclude standing charges; therefore, the monthly bill for gas and electricity combined this year averages £127. Remember, your property’s Energy Performance Certificate (EPC) rating will significantly impact consumption and your bill.

Water bills have two components: fresh water supply for daily use and sewage or wastewater treatment. According to Water UK, households will see an increase of up to £10 in monthly water bills this year, taking the average annual forecast to £603, which is nearly £50 monthly. According to MoneySuperMarket’s latest report, the average monthly cost for a consolidated broadband package is around £49. This expense includes your phone bill, TV license and streaming services.

Home insurance (buildings and contents)

According to the Association of British Insurers (ABI), an average household in the UK owns things (furniture, electronics, clothes, etc.) worth nearly £52,000; therefore, protecting them is essential. Also, the physical structure of your home requires cover against natural calamities, subsidence or vandalism. The national average for combined home insurance that covers the structure of your home and your belongings ranges between £35 to £45 a month.

Maintenance and emergency funds

Emergencies like a busted boiler or gas leaks may require you to set aside a special fund for urgent maintenance and repairs. While a 10-year NHBC warranty usually covers new-build homes, it is advisable to keep aside an annual budget of up to £1,000 for maintenance and repair-related expenses for older properties, even though you may not necessarily use it.

Other potential costs

While there are some straightforward fixed monthly expenses to run a home smoothly, every household must also factor in the hidden costs of owning a house in the UK. For instance, leasehold property ownership includes ground rent and service charges, averaging around £2,300 per year in England and Wales. Similarly, parking charges may vary depending on supply and demand ratios. Some lenders also require mortgage applicants to have life insurance that pays for the asset in the event of death.

Homeownership in the UK provides immense security, with the rights of all homeowners protected by law. To ensure your property’s safety and the uninterrupted delivery of key services, you will need to budget properly and pay all these bills on time.

At Benham and Reeves, we always look out for the best interests of homebuyers and advise them on the key financial requirements when making such big decisions. Check out some of the costs of buying a UK property and our investment guide for overseas investors. We offer a range of services, and you can contact us to learn more about investing in the UK and London.