EU-SILC 2006: On housing maintenance expenditure and its influence on household financial situation

29.01.2008

The Central Statistical Bureau carried out a survey on Community statistics on income and living conditions (EU-SILC) (within the survey 4315 households were interviewed), and the data of 20061 show that housing costs2 on average in country reached 49 LVL per single household per month, and in comparison with previous year it has increased by 9.8%.

Total housing maintenance expenditure (LVL on average per household per month)

Latvia

Urban areas

Riga

Rural areas

2005

44.39

49.76

54.99

31.46

2006

48.72

54.61

59.45

35.97

2006 over 2005, in per cent

109.8

109.7

108.1

114.3

Nevertheless, the housing costs has grown, the share of this expenditure in households’ disposable income has not increased, but has slightly decreased from 17% in 2005 to 15.2% in 2006. Such trend has been observed in both urban and rural areas. For almost every third household, total housing costs are financial burden, and are characterised as ‘’a heavy burden’’, according to the survey data.

Answers to the quaestion '' Is total housing cost a financial burden to your household?''
(in per cent)

The graph shows that, the number of answers ‘’a heavy burden’’ is decreasing and the number of answers ‘’somewhat a burden’’ or even ‘’not burden at all’’ is growing. It should be taken into the consideration that, housing costs still are a burden for the poorest households. 47% of households in the lowest quintile group3 mentioned that, it is ‘’a heavy burden’’ to cover housing costs. (In survey of 2005 – those were 49%). To cover the housing costs the poorest households have to pay higher share of their disposable income than richest households.

Total housing expenditure and its share in disposable income by quintiles in 2006

Nevertheless the households of the poorest (first) quintile for housing pay less than others, the rate of their expenditure for housing maintenance reach 32% of disposable income, and crates serious tension in their budgets.

Considerable burden of hosing costs is observed in a single person households, where this expenditure reach 27% of the disposable income, as well as, in households consisting of one adult with children under age of 17 -24%. Especially high this share of housing costs is for single pensioners, for them this expenditure reaches even 32% of disposable income.

According to the survey data, during the last 12 months 12.6% of the households, because of the insufficiency of the money, had debts for bills related to housing (in 2005 – 18%). Significantly more such debts had households with three children and more (30% of those households) and every fourth household (25%) consisting of one adult and children. But only 7.6% of single pensioners had such debts, even though they pay notably higher share of their total income.

In the survey it was found out that, last year (in 2005) local government granted allowances for households so that they can cover the hosing costs. In 2005 3.7% of the households received housing allowances, the number is almost the same as in the data of previous survey (3.8% in 2004). According to the data of EU-SILC, 3.7% of the households in first quintile received local government allowances to cover the housing costs, 7.8% - households in second quintile and 4.9% - households in third quintile.

During the survey the respondents were asked: ‘’Can you financially afford to heat you house?’’ Positive answer was given by 73% of the households, nut negative – by 27%. Almost the same percentage of answers was given in both urban and rural areas. If compared to previous survey (in 2005), the number of households not financially able to heat their homes has reduced (in 2005 – 32%). Still it does not mean that, more than one fourth of the Latvia households did not pay for heating or refused to heat their homes, more likely this is expenditure item, which can not be influenced by the households, and it arise important financial problems. The share of such households not able to afford to heat their homes is noticeably higher among people with lower income.

Share of households not able to afford to heat their homes in 2006
(in per cent)

Prepared by Social Statistics Department
Tel. 67366908
Edmunds Vaskis

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1
In EU-SILC 2006 the data on hosing conditions were compiled for the moment when the survey was carried out, but data on income - in previous year (2005).

Exenditure connected to housing maintenance is fallowing:
   - mortgage payments (only for owners);
   - housing insurance payments;
   - 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).

Only expenditure necessary to pay to live in the dwelling are included. Expenses of the household covered to provide extra comfort (e.g. payments for cable TV, telephone bills, etc.) are not included.

Quintile – one fifth from surveyed households, which are in breakdown in growing sequence according to their available money income per one household member.