A growing number of tenants are seeking homes with bills included so they can more easily plan their monthly outgoings, so is it the way forward for landlords?
One of many trends proliferating across the UK rental market right now is that of tenants wanting to go all in on their monthly rental payments. Rather than move in and sort out and pay all the bills themselves, growing numbers want to make a lump sum payment to cover everything.
While this has always been a popular method of payment in student accommodation, its growth in the general private rented market is new, according to recent Rightmove data.
The term ‘bills included’ is now the most searched requirement on the property portal, overtaking searches for pets included which became particularly popular after the pandemic. In August 2021, searches for ‘bills included’ wasn’t even in the top five, says Rightmove.
The research indicates that landlords may get a lot more hits right now if they offer contracts with bills included, and it could give them a greater choice of tenants as a result.
Bills included is top priority
Even people’s desire for gardens and garages has been trampled by the wish to have all the bills and rent included in one easy payment.
The cost of renting has continued to increase over the course of the pandemic, along with recent soaring energy bills, so having a predictable monthly outgoing for tenants might be understandable. The average asking rent outside London is now £1,126 per calendar month – 19% higher than two years ago.
Landlords who are keen to stay ahead of the curve and secure the best tenants from their homes have had numerous trends to follow in recent years. As mentioned, pets became a buzz word for many landlords, as well as home-working spaces with the increase in remote working.
Outside space has also become more of a priority for many since the series of lockdowns left people craving the great outdoors. People also seek more square footage in their homes, having spent more time than ever within their own four walls.
But all-inclusive tenancies with bills included are a new avenue for most landlords in the market.
The pros and cons for landlords
One of the most obvious benefits right now, of course, is the fact that offering bills included will ramp up the popularity of your property. This is good for landlords, because the more interest you have, the more choosy you can be about which tenants you decide to proceed with.
Particularly for landlords who rent out city or town centre flats that tend to attract more millennial and Gen Z tenants, the idea of bills included can be even more appealing. The same applies for landlords with HMOs (houses in multiple occupation), as it can be a key selling point.
It also means that the chance of tenants defaulting on bills, which can cause problems for the property owner, is diminished because the bills are always paid.
On the flip side, one of the cons to consider is that it adds to your responsibilities if you offer bills included. You have to set up each utility bill and manage it, switching suppliers when needed and keeping an eye on offers. You can employ an agency to do this for you, but this costs money.
It’s also important to factor in any likely future bill rises, because if you agree a set price with your tenants, it would be difficult to change this while the tenant is in a contract. It is recommended that you price the property carefully, potentially with an agreement that bills can be amended if they increase.