Is “Bills Included” going the way of the Dodo?

Iain Clarke - Metro Prepaid

Peter Hemple raised this question some months back in an article for Property Investor News titled “Is it time for HMO landlords to ditch “Bills Included” once and for all?”

Peter predicts that we may in future see more progressive thinking with ever greater numbers of landlords installing individually metered rooms.

For multi-let properties prepay metering is favored but some landlords are yet to move from to Bills Included – touring pitches and student accommodation would be examples where Bills Included has a strong following.

Bills Included refers to the practice of managing the cost of utilities like electricity by bundling them into the rent or the pitch fee.

Additional fixed recoveries are another option.

There are a variety of bills of course and the most practical course might be to include some of these.

This discussion focuses on electricity. Bills included as a strategy is simple to manage.

The only problem with including electricity in the rental is its serious flaws in failing to reward behavior that manages and conserves energy.

Jim Haliburton writing for HMO Magazine argues that a Bills Included property is easy to spot, all the lights and appliances are left turned on.

Wouldn’t it be better to better manage energy usage through prepay meters’ proven ability to reduce consumption and then offer lower more competitive rentals?

My feeling is that tenants make a decision on the headline rental number and while they appreciate the convenience of bills included, lower rental tips the scale in many cases rewarding the property with metered supply.

I haven’t seen evidence to prove that tenants actively avoid metered parks or properties, in fact at times Metro Prepaid has been called on to supply prepay meters at the insistence of tenants dissatisfied with “Fixed Recovery” charges imposed by landlords.

In these instances the occupants backed their ability to manage their energy usage and spend less than the fixed recovery amount.

This logic holds if you consider that with a fixed recovery occupants are seldom rewarded for conserving energy.

Prepay sub metering is well proven having been used in multi-let properties in the UK for the last 100 years and if implemented in accordance with Ofgem guidelines presents the fairest and most effective tool to manage energy usage.

Energy bills often halve after sub meters have been installed to meter the supply to individual tenants.

These days there is no need to keep coins or supply cardboard top-up cards. Digital prepay meters are cheap to manufacture, when compared to their mechanical coin meter ancestors, convenient to top-up and depending on which model you choose, range from tamper resistant to tamper proof.

Metro prepaid has never been busier serving property owners wanting to upgrade old coin and card meters and those that are finally ready to move away from unmetered supply and throw in the towel on “Bills Included”.