Landlords could charge their tenants 20 per cent more, new research has found. Could landlords be missing out on an opportunity to earn more each month from their rental properties? New data shows that a certain type of listing commands an average monthly rent of £2,028, compared to £1,682 for standard lets – that’s a respectable £346 premium. Despite this uplift, the vast majority of landlords aren’t taking advantage of this add-on. So, what’s putting them off?
New figures reveal that just 16 per cent of rental properties currently on the market in England offer ‘bills included’, even though these listings can command 20.6 per cent more in monthly rent.
Regionally, the West Midlands stands out, with bills-included properties making up 34.1 per cent of rental listings, the highest of any English region. This is followed by Yorkshire & Humber (22.5%) and the North West (21.9%). In contrast, just 9.3 per cent of London’s rental stock is advertised with bills included.
So why are so many landlords saying no to a model that appears more profitable on the surface?
According to the researchers, the likely answer is risk and complexity. The average cost of household bills in England – including council tax, energy, broadband and a TV licence – totals £384 per month, which exceeds the average £346 rental premium. This makes the margin for profit tight, especially during periods of fluctuating energy prices.
There’s also the added administrative burden. Managing bills for multiple properties means landlords must monitor usage, keep track of supplier accounts, and deal with any disputes – tasks many would rather avoid.
Despite the potential benefits for tenants, the data also shows that demand for bills-included listings is relatively low. Just 13.3 per cent of bills included properties have found tenants, compared with 28.2 per cent across the broader rental market.
Tenants in the South East are most inclined to choose bills-included homes, with 21.9 per cent of these listings already let. The East of England (18.5%), West Midlands (13.1%) and South West (12.5%) also show above-average demand. However, interest drops sharply in Yorkshire & Humber, where only 6.4 per cent of bills-included listings have secured tenants.
While the data doesn’t provide a breakdown by tenant type, it’s reasonable to assume that bills-included rentals are more appealing in certain sectors of the market, such as student housing. In shared student lets, dividing utilities between multiple tenants can be both complicated and a common source of disputes. An all-inclusive rent simplifies this arrangement, providing a single, predictable payment that covers all household outgoings – something many students and parents may prefer for budgeting purposes
Marc von Grundherr, Director of Benham and Reeves, which conducted the research, commented: “Offering your properties with bills included is unusual, especially outside of the student lettings market.
“Tenants themselves don’t seem particularly drawn towards bills-included properties. This is likely to be a result of wanting more control and transparency over their household expenses. For example, they may want to be able to select their own suppliers and manage their own usage in order to minimise costs, and when they’re on an all-inclusive deal, this can’t be done nearly as easily.”
Does your portfolio feature any bills-included properties? What are your thoughts on the research?
