New research from London lettings agency Benham and Reeves exposes a sharp disconnect in the rental market: while landlords offering bills-included tenancies command an average monthly premium of over £340, both supply and tenant demand for such properties remain strikingly low.
According to the analysis, just 16% of current rental listings in England are advertised as “bills included”, despite those that are commanding an average asking rent of £2,028 per month – 20.6% more than the £1,682 average for standard lets.
At first glance, this premium might appear a lucrative option for landlords – particularly those keen to target student renters or short-term tenancies. But dig deeper, and the maths starts to falter.
Benham and Reeves estimate the average monthly cost of bills – covering energy, broadband, council tax and the TV licence – at £384. That’s £38 more than the average rent uplift that bills-included listings currently achieve.
UNPREDICTABILITY FACTORS
Factor in the unpredictability of utility markets, and what looks like a profitable edge can quickly become a margin-eroding headache.
Marc von Grundherr (main picture), Director of Benham and Reeves, says: “Bills-included sounds attractive, but energy price volatility, rising council tax rates and the admin burden mean landlords are right to be cautious. Even with a 20% premium, you can easily find yourself out of pocket.”
LANDLORDS STAY AWAY
Beyond the financials, landlords are simply not embracing the model. London has the lowest proportion of bills-included rentals on the market, with just 9.3% of listed homes offering it as an option. The West Midlands leads the pack with 34.1%, followed by Yorkshire & Humber (22.5%) and the North West (21.9%).
TENANTS NOT KEEN
Nationwide, just 13.3% of bills-included listings have found tenants – less than half the demand level of the broader market, where 28.2% of all rental listings are being snapped up.
Even in the South East, where appetite for inclusive rents is strongest, tenant demand tops out at just 21.9%. In regions like Yorkshire & Humber, demand falls to a meagre 6.4%.
Marc von Grundherr adds: “Most tenants want control and visibility over their bills – not a single bundled figure they can’t manage or negotiate. They want to shop around for cheaper suppliers or cut their usage. Bills-included strips them of that flexibility.”
And he adds: “Unless you’re in student accommodation or operating very short-term lets, including bills is an unnecessary risk. It’s a strategy that works in theory – but too often fails in practice.”
