These are the highest figures observed on record, with inclusive rates doubling since 2005.
The findings from the annual Accommodation for Students (AFS) rental report, also suggests that as the number of landlords choosing a bills-inclusive option has increased, the average cost of inclusive rates has dropped significantly from an average of £15.60 in 2005 to just £7.21 in 2014. While this is great news for tenants, Glide warns that landlords may be at risk of undercharging.
Richard Price, head of business development at Glide explains: “Offering bills inclusive is a good way for landlords and letting agents to distinguish themselves in a competitive student market. While in the past they were able to add a significant buffer, many landlords are now dropping their bills inclusive price to stay competitive without a real analysis of the cost, which can fluctuate hugely across 3, 4 and 5 bedroom student houses.”
The provision of inclusive rates is largely consistent across England and Wales, but properties in Scotland have bucked the trend, with only 21% of rental properties offering inclusive rates. However, in the popular student city of Edinburgh 41% of properties now offer at least one bill inclusive, which again, is a marked increase on previous years.
Elsewhere, AFS found 40 university cities with over 55% of student rental properties offering bills inclusive, including Manchester (56%) which boasts a student population in excess of 75,000, Chester (62%), Loughborough (83%) and Liverpool (84%).
Price continues: “There is no doubt that offering a bills inclusive service is as beneficial to landlords as it is to student tenants but landlords should not leave themselves financially exposed even when competing for tenants. The amount of £7.21 is too low to cover utilities. In my experience £10.19 per person per week is a reasonable amount on a 4 bedroom property for gas and electricity.
The amount used per person decreases as the number of tenants increase, i.e. a 5 bedroom property drops to around £9.03pppw and so on. We quote based on usage in similar properties in their postcode over the last two years in order to reduce risk of over usage yet remain fair for tenants.”
72%2 of students today rate inclusive bills as either an essential or important factor when choosing a property. Bills can cause stress and create arguments in a shared house, while landlords can sometimes be left with unpaid bills. Inclusive bills, at the right rate, are an easy solution to avoid these issues.
For student landlords looking to remarket their student properties for the 2015/16 intake it’s useful to be aware of the provision of bills-inclusive rates in their area. In some areas bills inclusive is becoming essential to attract desirable students, but landlords must be mindful that they don’t leave themselves exposed to risk.
Glide enables landlords and letting agents to track if tenants are getting close to their usage allowance, which gives them an opportunity to rein in their usage or to pay a top up charge. This ensures landlords are never left out of pocket and that students are more likely to receive a credit note than a surprise bill at the end of their tenancy.
Glide makes life easier for landlords by giving them one consistent account manager and delivering one easy monthly bill to cover all utilities and services across their entire portfolio of properties – making it ideal for those looking to cut down on their admin. Glide offers landlords the opportunity to provide a bills-inclusive rent or simply refer tenants to receive individual bills for each person to ensure billing responsibility is shared.
