How much does it cost to run a house per month?

Picture of our first home in London

There may come a point in your life where you will want to move out of your parent/ guardian’s house and into a place of your own, with friends, or complete strangers! Each of these will have various factors to consider before taking the leap, but one of the most important is understanding the associated costs involved in running a house.

It is worth noting that it is difficult to give an accurate cost as there are many factors that affect the overall cost, such as location, property type, if you are renting or buying, and if you are house sharing. Therefore, in this article, we will outline the key bills that you will likely face in both renting and buying.

The average cost of running a house per month is £1,575. This is based on a 2-bedroom house in South East London with mid-level expenditures. If you removed service charges, this drops to around £1,400.

Average household bills that you may pay per month

  • Mortgage or Rent
  • Buildings insurance
  • Content insurance
  • Any Service charges or ground rent
  • Parking permits
  • Electricity
  • Gas
  • Water
  • WiFi
  • Landline
  • TV License
  • Council Tax
  • Shopping

Mortgage or Rent

This will typically be the largest bill that you will have to pay when you move into your own place. Mortgage payments will usually come out on the first working day of each month and you must ensure that payment is made, else you may end up with some hefty fees and can affect your credit score. It helps to set up a direct debit, so you do not have to worry about doing this every month.

The amount you pay each month will be based on your mortgage type. If you have a fixed rate, your payments will be the same each month across the term. If you have a variable rate or base rate tracker, it may pay to keep a little extra in your account each month to ensure you are covered for any fluctuations in the interest rate.

However, if paying rent, you only need to pay a set rate that is stated in your rental agreement at the beginning of the tenancy. The price may change every couple of years in line with inflation, so you should check this in your contract/ with your landlord.

You may have a set date that you need to have your rent paid by, which can end up being before the end of each month, as your Landlord may have Buy to Let mortgages to pay at the beginning of the following month. Some Landlords may be flexible with payment dates; however, it is best not to risk this.

Average mortgage cost: £850.00

Buildings & contents insurance

If you are buying a property, you will need to pay for Buildings Insurance, and this is a must when applying for a mortgage. Some mortgage lenders will also require that you have buildings insurance before you even exchange contracts! The insurance cover must be enough to rebuild the entire house should any detrimental incident occur.

You may not need to pay for buildings insurance if you are buying a leasehold property as this is usually included in the service charges, explained below

Contents insurance is not a must, but is a good to have – What good is having buildings insurance to rebuild your home but not having cover to replace all your belongings?

You will often find most insurance companies will offer both Buildings and Contents insurance together, however, you don’t have to have them both from the same company should you find a better deal elsewhere for one or the other. I prefer having them both with the same company as it makes my life much easier!

If you are renting, you may not have to pay for either of these as many Landlords will pay for both. Some landlords will only pay Buildings Insurance (because they must) and will leave it up to you on whether you pay for contents, or in this case Tenants Insurance. It is best to check your contract so you know who this responsibility lies with.

Average buildings and contents insurance cost: £19.00

Service charges or ground rent

The purpose of service and ground rent charges are to cover any maintenance and management of the communal areas of the land/ building and to pay for the lease. This includes gardens, lobbies, stairways, etc.

If you are buying a house on a freehold, you do not need to worry about any ground rent or service charges as you will own the land. If you purchase a property that is on a leasehold, typically found with flats/ apartments, you will have to pay these either monthly or quarterly.

Ensure you or your solicitor look over the lease details fully to ensure no hidden clauses and that there is ample time left.

Average service charge cost: £180.00

Council Tax

You will have to pay council tax if you are both renting or buying where you can only get a discount if you are living on your own or if you have a disability. The amount you must pay will depend on the Council Tax band that your property sits in and you can pay this either yearly, quarterly, or monthly.

If you feel that your property is in the wrong tax band and should be in a lower band (because why would you argue it to be in a higher, right? ) you have the right to do so and fight your case. You should also be ready to accept that you may end up discovering that your property should, in fact, be in a higher band. Higher band = higher cost -> Risk vs reward.

There are certain exceptions for individuals who do not need to pay council tax. This list includes students, armed forces, foreign diplomats, and several others. See the Gov website for the full list

Average council tax cost: £184.00


Just like your rent or mortgage payments, there is no real way around paying for utilities – They are what keep your house running! The main utilities that you will need are electricity, gas, and water, however, you can find properties that only use electricity for power and heating.

Gas and Electric

You will often find that most companies offer both Electric and Gas together on one bill, but you can choose two separate companies should you prefer. You will likely be given the option to pay for your energy monthly, quarterly, and yearly and the amount you pay will depend on the plan you select; the amount you pay can be either fixed or variable rate (based on the amount you use each month).

If paying a fixed rate each month, it pays to provide accurate meter readings to your provider as you may be using much less than anticipated, therefore may be due credit on your account. We do this regularly and have received several credits to our account over the years!

One other option to be aware of is Pay as You Go meters for both Gas and Electric. These are the meters where you top up a key/ card at your local Pay Point with any amount and do so as and when you need it. Unlike with the above, where if you don’t pay on time you will still have power for a while, if your money runs out on the meter, so does your power!

Average energy cost: £55.00


The rate you pay for water will depend on the local authority and the area you live in as some locations have low water availability, therefore, costs may be higher. Unlike insurance and energy providers, you do not have the option to shop around for different suppliers because each is allocated to where you live.

The amount you pay can either be fixed or based on the amount you use each month. If you are paying a fixed rate, will base the price you pay will be calculated on the size of the house, the number of bedrooms, and how often you are in the house. From that, you can use as much water as you want!

You should also provide accurate meter readings every month, like with energy readings. Also, if you live in a large house with a few people, you should get a meter fitted. This is due to the price being calculated on the estimated number of occupants /usage.

Average water cost: £20.00

Wifi, Landline, and TV

Although not a necessity, Wi-Fi is more and more being considered a basic human right. Even if you do not use the archaic home phone, you will have to pay for line rental as most Internet Service Providers use this to provide you with a connection.

You will usually get a good deal as a new customer when signing up to a new ISP, so it is usually worthwhile to shop around each year or haggle with your existing provider.

If you are part of the generation who do not have a Netflix, Amazon Prime, Apple TV, or any other online platform that doesn’t live stream, and prefer the traditional TV, you will have to pay for a TV License. And if you want more than the standard 4 channels, you may want to look into a TV package (typically bundled together with your Wifi).

The yearly cost for a TV licence alone is £157.50, or £13.12 a month. If you are really looking to save money on your TV license, the annual cost for a black and white set is £53.00 – Bargain, right?

Average Wifi, Landline, TV cost: £65.00

Parking permits

Dependent on where you live, you may need to pay for a parking permit if you own a car and do not have a driveway or an allocated spot. Paying for a permit does not guarantee you a specific spot but allows you to park within a certain distance from your home.

There is no set cost on the amount you may need to pay for your permit as this will be determined by where you live/ your local authority. It is worthwhile looking into this before you decide on a certain property as the fees can be quite substantial.


The final expenditure that you can’t get around is shopping and this can eat away your budget.

The cost of shopping can vary massively as it will be dependent on your own lifestyle, diet, and budget. There are many ways to reduce your shopping bill, such as purchasing different items from multiple locations through to hunting for those yellow labels, however, we find it easier to shop from the same place go save on time.

Average shopping cost: £250.00

What is the average cost of running a home per month?

The average cost of running a house per month is £1,575. This is the average cost between the low end and high end charges. The low end is just the essentials and the high end is everything.

  • Low end monthly cost of essentials: £1,378
  • High end monthly cost: £1,773

Essentials being: Rent/mortgage, Gas, Electric, Water, Insurance, council tax, and shopping.

Just to reiterate, our costs are based on living in a two-bed house on the outskirts of SE London and we have shown the average household bills that you would pay in the UK.

Recommended Articles