In the Quick Guide to Renting we wrote about the importance of including the cost of utilities and council tax in your housing budget. Depending on the age, size, and other factors, these costs alone can spell the difference in whether the place you have selected is really within your budget.
First let’s take a look at the necessities:
- Electricity – The amount you pay for electricity obviously depends in part on how you use it. Those that conserve and use electricity wisely pay less. Other factors than can influence your usage include the age of the items that use power and the construction of your home. Newer or updated homes are more energy efficient. On average, expect to pay £55 per month for a 1 or 2 bedroom flat and around £85 per month for a 4 or 5 bedroom house.
- Gas – The factors that contribute to your gas bill are similar to those that affect your electricity bill. Expect for your monthly gas bill to be a few pounds less than your electric bill.
- Water – Many homes pay a flat rate for water. Many experts feel that installing a water meter and basing your rate on actual usage is a better alternative. Paying based on actual usage has been shown to encourage conservation and reduce waste and results in lower water bills for consumers. In terms of budgeting, plan on spending about £35 per month for a 1 or 2 bedroom flat. The average for a large house is about £45.
- Broadband access – For some reason broadband access is not considered to be a necessity. In an age where job applications, banking, school work, and interacting with friends and family happens predominately online, a strong argument can be made that broadband is indeed a necessity. Many people bundle services, which most experts say wastes hundreds of pounds per year. Look at how you use the internet and select a service accordingly. Most people select speeds that are five times faster than is necessary for their common tasks. Most companies offer introductory packages with special rates for a limited time. Expect to pay between £16 and £18 per month for line charges plus usage fees.
- Council Tax – Council tax is an annual levy that covers local services such as roads, street lighting, rubbish collection, park and playground maintenance, public leisure centres, and contributes to the cost of local rescue, fire and police services. Council tax can be paid in one lump sum or ten payments throughout the year. The amount of the council tax depends on the size and value of the property. For a 1 to 2 bed flat the council tax will average somewhere between £1000 and £1700 annually; for a 4 bed flat or house the annual cost can be as high as £2700.
Discounts for students, low-income residents and those with disabilities are offered. The government offers online tools to apply for discounts, calculate the amount of tax and to answer payer’s questions.
When selecting a place to live you should also consider other fees and potential fees.
If you are going to have a car and wish to use nearby on street parking it may be necessary to purchase a resident parking permit. The cost of the permit can vary based on your location and neighbourhood characteristics, but expect to pay about £150 per year.
If you do not plan to own a car, be sure to include the monthly cost of transportation.
One other standard fee to take into consideration is a TV license. The yearly fee for a license is £145.50. It is the owner’s responsibility to acquire the license. Failing to get a license can result in a £1000 pound fine if you cannot provide a license when requested by a licensing authority.