The Household Costs Indices report from the Office for National Statistics (ONS) found that in the last five years, mortgaged households had experienced inflation of 37.6%.
The report said higher mortgage interest rates contributed to this inflation.
By comparison, private renter households saw the lowest cumulative inflation over the five years, at 30.7%, followed by outright owner-occupiers at 32.4% and social and other renters at 33.9%.
However, this has eased recently, as the data covering March found that the annual inflation rate for mortgagors and outright owner-occupiers was lower compared to the end of last year, and the lowest of all tenure types. Mortgagors saw this fall from 3.7% in December to 3.6% in March, while outright owner-occupiers experienced a slight increase from 3.4% to 3.6%.
Both private and social and other renter households saw an annual inflation rate of 3.7% in March, down from 3.8% and 3.9% respectively.
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Mortgage interest payments added 0.37 percentage points to the annual inflation rate for mortgaged households in March, while food and non-alcoholic beverages contributed 0.4 percentage points. These were both down from 0.5 percentage points in December.
The ONS said this was offset by higher contributions from electricity, gas and other fuels, and motor fuels.
For people who owned their homes outright, electricity, gas and other fuels added 0.29 percentage points to annual inflation, up from 0.12 percentage points in December.
The report showed that outright owner-occupiers had the second largest expenditure on electricity, gas and other fuels compared to other tenure types. These households also saw the contribution from motor fuel rise from 0.03 to 0.16 percentage points between December and March – however, this was partially offset by a smaller contribution from food and non-alcoholic beverages, which fell from 0.59 to 0.49 percentage points over the same period.
Sarah Coles, head of personal finance at AJ Bell, said: “Waiting for inflation figures for the past few months has been like watching a first-time waiter with an overloaded tray of glasses on a polished floor. We know what disasters are about to unfold, but we’re powerless to stop them. For some groups, the wait has been even more painful, because inflation has been rising faster.”
She said renters and lower earners had faced some “horrible price rises over the past year”, especially as they were less resilient to the additional financial pressure.
Coles added: “Rent rises have slowed in recent months, but because they typically make up 34% of tenant incomes, those smaller rises have still bitten hard. Meanwhile, these groups spend a bigger proportion of their income on the essentials, so the gradual rise in everyday bills has also taken a toll.
“Over the longer term, looking back five years, those with mortgages have cumulative inflation at an incredible 37.6%. This owes a great deal to how low mortgages were during the pandemic and how they rose dramatically in the years that followed. For renters, five-year inflation is a little lower, at 30.7%, but it’s still an astonishing level of price rises.”
