Research from London lettings and estate agent, Benham and Reeves, has revealed that it’s not just London house prices that have climbed considerably in recent times, with the total paid in council tax by London homeowners and tenants hitting almost £5bn a year – £1.2bn more per year compared to just five years.
Last week it was reported that inflation has surged to a 30 year high and with gas and electricity costs set to climb higher yet, the cost of living has become increasingly difficult for many.
Those living in London already face some of the highest house prices and rental values in the nation, with the capital also home to the highest household expenditure and this squeeze on affordability has no different when it comes to the amount of council tax they pay.
Household council tax costs
The research by Benham and Reeves shows that the average Londoner pays £1,374 in council tax per year, up 26.8% in the last five years,
Richmond is home to the highest council tax cost per property at £2,065 per year while Southwark has seen the largest increase over the last five years at 36.8%.
Total council tax costs
In total, London’s current council tax bill is a huge £4,993,798,878 per year based on the average cost per household and the total number of dwellings across the capital.
Barnet is home to the highest sum of council tax paid on an annual basis, with £258.5m paid across the 146,730 homes in the borough. Croydon is also home to one of the highest total council tax bills at £252m per year, followed by Bromley (£225m), Ealing (£195m) and Lambeth (£1782m).
But it’s not just the increasing cost of council tax per household that is pushing up this total, in the last five years an additional 150,000 homes have been built within London which has contributed to a £1.2bn increase in the total sum of council tax paid across London.
Tower Hamlets has seen the largest annual increase in council tax costs over the last five years, with the total sum paid per year increasing by 48.6%. Southwark (45%), Barking and Dagenham (41.4%), Lewisham (41%) and Croydon (38.9%) are also amongst the boroughs to have seen the largest uplofts in the total sum of council tax paid.
Director of Benham and Reeves, Marc von Grundherr, commented:
“Council tax is one of the core costs that many homebuyers fail to consider when looking to buy a home and the sum owed each year can differ drastically depending on where you choose to live.
Much like our home insurance or energy bills, it’s also subject to change and the average London homeowner has seen council tax bill increases squeeze their cost of living by a further £300 a year in the last five years alone.
So it’s an important one to consider when it comes to the ongoing affordability of your home, as unlike an expensive phone contract or comprehensive TV package, it can’t be dodged.”
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