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Warning to landlords offering ‘bills included’ rental properties

A lettings agency says demand for ‘bills included’ properties in London has rocketed since April - despite it costing tenants large sums.

Benham and Reeves analysed current rental stock available across the capital and found that currently, just five per cent offer to cover the cost of bills within the monthly rent. 

Availability is at its highest in Brent, where 12 per cent of all current rental properties listed on the market include the cost of bills within the monthly rental cost, followed by Hounslow and Barking and Dagenham on 10 per cent. 

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With the cost of our energy bills, in particular, spiralling in recent months, it’s no surprise that demand for these rental homes is also high. The agency found that 34 per cent of rental properties that include the cost of bills within the rent paid have already had a let agreed, up from just 26 per cent in April of this year. 

But do they offer a saving to tenants? 

The average rent for a London rental where bills are included currently stands at £3,045 per month, a 51% increase on the £2,023 in April 2022. Rental properties without the cost of bills covered are understandably more affordable at £2,460 per month, although this cost is still up 43% since April 2022.

The average cost of our monthly bills is now £321 across the capital, up 34 per cent since April alone. 

Despite this increase, those paying their rent and bills separately are still only forking out £2,781 per month. That’s £265 less a month than the average rent for a property with bills included, a difference of £3,175 per year.

What’s more, back in April, the cost of paying bills and rent in one payment was just £59 (£711 per year) compared to those paying their rent and bills separately. That’s an increase of £206 per month or £2,464 per year since April, for those opting for the convenience of a rental home with bills included. 

Director of Benham and Reeves, Marc von Grundherr, comments: “Many tenants prefer the convenience that comes with a rental property where all running costs are covered in one monthly payment along with their rent. Of course, this rental cost is going to be higher than a property where bills aren’t included and landlords may well charge more as a contingency for a less stringent approach to managing the consumption of gas, electricity and water.  

“However, as our research shows, just months ago it equated to an additional £59 per month which is a very manageable increase for such a heightened level of convenience. But since then, the cost of living crisis has spiralled out of control and the cost of running our home has been one of the driving factors behind this. 

“Now the increase in asking rents for bills inclusive rental properties is huge, having increased by over £200 per month since April alone.

“It’s important for landlords to consider just how much they may be in line to pay should they find themselves with a tenant who plans to work from home this winter, as it could leave them out of pocket even when charging a rental premium to cover the increase in running costs. 

“At the same time, any landlord who does opt to keep the bills in their name may also find themselves liable should their tenant fail to cover these costs.”

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    Bills included, no no no

  • George Dawes

    With the way electric is going you’d be mad to do bills included

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    Now the government have stabilised gas and electric prices for 2 years those of us who include utilities can realign our rents with somewhat more certainty.
    For the last year it's been pure guesswork.

    I've just received the annual estimate from Octopus for gas and electric.
    Assuming those estimates are correct and usage doesn't increase, water and Council Tax don't have more than an inflation linked rise and broadband does, most of my HMOs should be somewhere around £50 to £70 per person per month more expensive for utilities than they were last year.
    That's a figure I can work with and to a large degree have already factored in. Judging by comparable rents on SpareRoom most other HMO landlords have adjusted their rents by an appropriate figure and the demand for these rooms is huge, so certainly in this part of the country tenants are being realistic.

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    I'd never do it. Way to risky. Who is watching when they run the electric heater all day.

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