Students to Face Even Higher Interest Rate Charges After RPI Increase
20th Apr 2018
So you've found your house, and now the only thing that lies between you and your long summer holiday are exams. Well, not quite. Before leaving university for the summer you would do well to start planning your household bills for the next academic year.
For those moving out of halls and into a private student house, it may come as a surprise that under most tenancy agreements, the wide array of bills will soon be your responsibility. Before long, you may start to think twice about running the tap whilst brushing your teeth, or leaving every light on in the house because it's far too much effort to turn them all off one-by-one. Further, for a large number of students in the UK, tenancy agreements start on 1st July so you are financially liable from that point forwards.
You will be pleased to know however with a small amount of forward planning as a household, you can vastly reduce the stress come day one of your tenancy next academic year. StuRents takes a whistle-stop tour of the household bills you will encounter as a student living in a private house. Beyond this, we take a look at the various methods you have of managing and paying these bills as a diligent household.
Check your tenancy agreement
Your tenancy agreement will highlight which bills you are responsible for. Whilst it is most common for you to be responsible for all bills, some landlords may take care of certain aspects such as water or perhaps internet. It is also increasingly common for landlords to price "bill-free" rental prices. Regardless, step one is to know which bills you are taking on before you can make arrangements for them.
Decide on a method of bill management
There are a variety of options available for you to manage your bills. Each has its own merits and drawbacks and the chosen solution will largely depend on the dynamics of the household and the extent to which housemates trust one another.
Shared bank account: The simplest method is to set up a joint bank account. Bear in mind that this can take time, and completion thereof will require all housemates to be present before the account can be opened. Sharing an account allows all direct debits for bills to be channeled out of one place and ensures that all housemates are jointly liable for paying the bills. In parallel to setting up all direct debits, each housemate should then set up a monthly standing order to the joint account to comfortably cover the cost of bills. The downsides to this method are that you run the risk that one or more housemates fail to keep up with monthly payments, and secondly, bills are rarely static, meaning that the monthly amount paid in per tenant will have to account for fluctuations in bills due to usage (most commonly on gas and electricity bills).
Electing a 'bill master': Requires a housemate that is pushy and willing enough to constantly chase payments when required. Whilst for most this is a good result, the system can often lead to household friction and for the 'bill master' the process can be very time-consuming. The added downside is that the bill master, being the sole named account holder, is taking on the financial risk of all utilities on behalf of the entire household.
Each tenant pays a different bill: A very popular method which results in smaller balancing off payments between housemates at the end or during tenancy
Packaged bills: There is an ever-increasing list of companies that are offering bill-consolidation products specifically for the student sector (now also offered through StuRents) that can offer students fixed priced bills on an individual basis. The household needs to agree to the package being paid for (gas, electricity, water, internet, TV etc.) and is then required to set up a monthly direct debit for the agreed amount. On closure of the account, the household then settle the balance between fixed price paid and actual billed consumption. This is an increasingly popular method and effectively works to outsource the stress of dealing with all individual bills in return for a monthly direct debit.
Bill-free rents: Alternatively, negotiate a bill free rental price with your landlord or agent and leave the payment and maintenance of all household bills to them. Be mindful in this method that costs are then less transparent so be sure to keep on top of expected bill prices to ensure that you are paying a fair market rate for your utilities.
Your main bills as a student will be gas and electricity, water, broadband/phone and TV. As a student, you will be pleased to know that you are exempt from paying council tax. To ensure that your exemption is applied, first check with your landlord. In some universities, this process is managed by the university, whereas in others, you will be required to notify your local council directly.
Gas and electricity: First things first, make sure you take meter Readings at the very start of your tenancy. It is this Reading that will form the start of your payment terms. Ensure you continue to take Readings during your tenancy and compare with your estimated Readings that you are billed against monthly or quarterly. Doing so will avoid a potentially hefty bill at the end of tenancy. Of course, ensure you also check the Reading on departure so you can close out your bills correctly.
When setting up your gas and electricity bills, make sure you shop around. There are plenty of comparison sites online and you can also search online to find who the suppliers in your area are. Many utilities offer considerable discounts for purchasing online, with further discounts on paperless billing and direct debit payments.
Water: The most common method of payment is via a fixed water rate. This is calculated basis the rateable value of the property you are renting. Alternatively, if you are a low user of water as a household you can always request, with the permission of your landlord, to have a meter installed which will charge based upon your consumption.
If using a meter (or just simply save water wastage), you may wish to follow some simple tips to cut down on daily usage.
1) Avoid using the toilet as a waste bin to cut down on unnecessary flushing
2) Check all pipes and taps for leaks
3) Turn off the tap when shaving, doing the washing up or brushing your teeth
4) Take shorter showers and fewer Baths
Internet: The first and most important advice is to get this process rolling early. Setting up a new internet contract can take up to 6 weeks and even longer at the start of term when local providers are inundated with students all wanting to connect at the same time. Get ahead by doing this before leaving for the summer. Even if this means paying for unused months, it could be worth it to avoid the stress of being without internet for the first two months of your tenancy! As a bonus, you could try and persuade your landlord to take on the internet contract before you move in. This makes a lot of sense as your landlord can pass on the cost to you in your rent, whilst ensuring that the service runs continuously across tenancies to relieve stress.
There are a range of sites available to compare internet packages. Choose one that is competitively priced, whilst ensuring the contract period best suits your tenancy length. Early cancellation fees can often apply.
Should you wish to also purchase additional television packages or a telephone line, such as through Sky or Virgin Media, bundling-up can provide considerable cost savings versus purchasing each product individually.
TV License: If you watch live TV, you need a license. This means that if you only watch catch-up TV online, you do not need a license. If living in halls, each student would need to purchase their own license. One of the benefits of living in a private house is your TV license can be shared as a household. This can be a considerable cost-saver, especially in large student houses. Paying for the year upfront can bring good savings, and you can also apply for a refund for unused months on the annual fee. To do this, go to the TV licensing website directly. If you watch live television without a TV license you could be prosecuted and fined up to £1000.
Other bills: Aside from the key household bills covered above, you will also need to consider whether you take out contents insurance. Beyond this, you may wish to look at whether it makes sense to take out a joint contents insurance policy between your household. This latter option is less common as you will all be looking to secure possessions with differing risks and therefore premiums. Not taking out contents insurance exposes you to not being able to claim in the unfortunate event that valuable items of yours are lost, broken, or worse, stolen.
You can do endless research as a household to ensure you get the best rates across all of your bills. The most important elements however are to start early, get organized and agree upon a system to manage the payment and maintenance of these bills as a household during your joint tenancy.
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