More than a third of rental properties in the North East are being advertised with bills included as new research reveals a sharp regional divide in how landlords structure tenancies.
Analysis by LegalforLandlords finds 34.4% of rental listings in the North East include household bills, compared with just 8.6% in Scotland.
Across Britain as a whole, only 14.9% of available rental properties are advertised on a bills-included basis, leaving tenants responsible for household bills in more than 85% of listings.
The findings are based on an analysis of rental properties advertised on Zoopla on 1 September and suggest the all-inclusive model remains concentrated in particular parts of the rental market.
REGIONAL DIVIDE
London accounts for 23.9% of all bills-included properties identified by the research, the largest share nationally, followed by the South East at 13.2%.
However, those figures reflect each region’s contribution to Britain’s total stock of bills-included properties rather than the proportion of rentals within those regions offered on that basis.
LegalforLandlords suggests differences in the type of rental stock could help explain some of the variation.
Bills-inclusive arrangements are already common within parts of the student market, while some build-to-rent operators bundle utilities and other services into their rental proposition.
Sim Sekhon (main picture), Group CEO of LegalforLandlords, says: “Bills-included renting clearly isn’t a single national trend. In the North East, it accounts for more than a third of rental listings, while in Scotland it is less than one in ten. That’s a substantial difference in how landlords are approaching the rental proposition.
“There are also parts of the market where including bills has become a much more established part of the offer. Student accommodation has long used the simplicity of bills-inclusive renting as an attraction, while build-to-rent operators can use it alongside other perks to make their developments stand out to prospective tenants.”
LANDLORD RISK
Including utilities can give tenants greater certainty over their total monthly housing costs but transfers the risk of fluctuating bills and consumption to the landlord.
That calculation is becoming increasingly relevant as energy costs rise.
Sekhon adds: “For tenants, having bills included can make budgeting simpler and give greater certainty over monthly outgoings. For landlords, it is a very different proposition because they take on responsibility for costs that can fluctuate and consumption they cannot fully control.
“With the energy price cap rising again in October, the economics of that decision are becoming even more relevant. But there is no one-size-fits-all answer. What works for a student property or a build-to-rent development may look very different for a traditional private landlord.”
