Burden imposed by housing maintenance expenditure is increasing

07.03.2012

Data of the survey EU Statistics on Income and Living Conditions1 (EU-SILC) 2011 show that housing maintenance expenditure2 has grown, as has its share in the disposable income. In 2011 housing maintenance expenditure reached LVL 90 per household member per month. The sum is the same as in 2009, nevertheless it should be considered that household disposable income has diminished, resulting in the continuous rise in the share of housing maintenance expenditure.

Total housing maintenance expenditure on average per month and its share in household disposable income in 2005-2011

It should be taken into account that in the EU-SILC survey the payments actually made were found out, and they did not include the rent and public utility arrears.

Households with the lowest income (1st quintile3) had to bear noticeably higher housing expenditure burden. These households in 2011 spent 35% of their disposable income to cover the hosing maintenance expenditure (a year before the payments did not exceed 30%), whereas households with the highest income (5th quintile) spent 12%. It means that poorest households have to carry disproportionately heavy housing expenditure burden.

In 2011 the share of households, for which housing maintenance expenditure is a heavy burden, has increased noticeably. The share of households, for which such payments impose a heavy burden, continued to grow from 35% in 2009 and 41% in 2010 to 44% in 2011. Such a high housing expenditure burden has not been observed since 2005, when the EU-SILC survey was launched. Totally 89% of the households (86% a year before) answered that housing maintenance expenditure is a heavy burden or a slight burden for them.

Households belonging to the 1st quintile found it much more difficult to cover the housing maintenance expenditure.

Distribution of answers to the question “Is total housing expenditure a financial burden to you household?'' by quintile groups, 2011
(in per cent)

Regardless the local government efforts to help poorest households in meeting the housing expenditure, not always they are able to cover the payments. 23% of the households in 2011 due to the lack of financial resources were in arrears for utilities during the last 12 months (22% in 2010). The highest share of such households was recorded among the households consisting of one adult with children aged below 17.48% of such single-parent families due to the lack of financial means were in arrears for utilities4.

Share of households that during the last 12 months because of the lack of money were in arrears for utilities
(in per cent)

According to the EU-SILC 2011 survey data the total number of households, which during the last 12 months were in utility arrears, reached 196 thousand, and it is 4% more than a year before or 34% more than two years ago.

 

Prepared by Viktors Veretjanovs
Income and Living Conditions Statistics Section
Tel. 67366609


Methodological explanations

1 Survey was carried out from March till July 2011, surveying 6.6 thousand households, and all questions on housing maintenance expenditure were asked considering the seasonality of heating.

2 In EU-SILC survey the amount of housing maintenance expenditure includes following expenditure:

- rent for housing (only for tenants);
- housing property tax (only for owners);
- heating, electricity, water supply and sewerage, waste disposal, etc. payments connected with housing;
- expenditure for current housing repair and regular maintenance;
- expenditure on housing (not property) insurance (if such are paid).

3 Quintile – one fifth from households, which are broken down in growing sequence according to their disposable cash income per one household member.

4 Utilities include payments for water, gas, electricity and heat. Here also payments for waste management are included. Public utilities do not include telephone bills.