All inclusive rent
All inclusive rent, also called bills-inclusive or bills-included rent, is an arrangement where a tenant pays one combined monthly amount covering both the base rent and some or all of the property's regular running costs. These typically include gas, electricity, water, and broadband, and may also include council tax, a TV licence, and sometimes a cleaning or gardening service. The landlord collects the full amount, settles the relevant accounts with suppliers, and carries the financial risk if usage or prices exceed what has been built into the rent. This arrangement is most common in HMOs, where the landlord managing communal utilities simplifies billing across multiple unrelated tenants and removes the risk of unpaid service accounts in shared spaces.
What all-inclusive rent covers
There is no prescribed list. The landlord chooses which costs to bundle in, and the tenancy agreement must make this explicit. In practice, most inclusive arrangements cover gas, electricity, and water as standard. Broadband is common in student lets and HMOs. Council tax is sometimes included but requires particular care. Council tax liability in law sits with the occupier, so a clause that merely says "bills included" is not sufficient to transfer that obligation clearly, the tenancy agreement must name council tax explicitly if it is to be included.
It is also worth noting that under the Tenant Fees Act 2019, a landlord cannot charge separate administration or handling fees for managing utilities. If inclusive billing is offered, the proper way to recover costs is to build them into the rent and describe in the tenancy agreement exactly what is included, how fair usage is measured, and what happens if caps are exceeded.
The Ofgem maximum resale price rule
When a landlord pays an energy supplier and recharges that energy to a tenant, whether as part of inclusive rent or as a separate line item, they are classed as an energy reseller and are bound by the Ofgem maximum resale price (MRP). Under Section 44 of the Electricity Act 1989 and Section 37 of the Gas Act 1986, a landlord may not charge a tenant more per unit than the landlord pays their own supplier, and the standing charge must be split fairly between all users. No profit margin is permitted on domestic energy resale. Landlords who charge above the MRP, whether by bundling in a flat per-room rate that exceeds actual usage cost, or by applying an undisclosed markup, face civil proceedings for the recovery of the overcharged amount.
In practice, this means inclusive rents that bundle a fixed monthly energy contribution into the rent must be set conservatively enough to remain below the MRP equivalent even in a high-usage or high-price scenario. Sub-meters, instruments of measure that allow accurate per-tenant usage tracking, are the most reliable way to demonstrate compliance if a tenant challenges the charge.
Fair usage caps
Most all-inclusive agreements include a fair usage cap on gas and electricity. This sets a consumption limit above which the tenant becomes responsible for excess charges. The cap must be stated in the tenancy agreement in clear, specific terms, a vague reference to "reasonable use" is unlikely to be enforceable in a dispute. A typical approach is to specify either a monthly energy spend cap (for example, £60 per person per month) or a unit cap (for example, 150 kWh per month per room), with the mechanism for measuring and recovering excess costs set out explicitly.
From working with self-managing landlords across the UK, we find that most disputes in all-inclusive arrangements arise not from excessive usage itself but from caps that were never clearly defined at the start of the tenancy. Landlords who document their baseline utility costs before setting the cap, and who share that documentation with tenants at the outset, rarely face a challenge.
Financial risk and pricing
All-inclusive rent shifts the risk of price rises and usage variation from the tenant to the landlord. If energy prices spike or tenants use significantly more than expected, the landlord absorbs the difference unless a fair usage cap or a rent review clause covers it. The standard approach to managing this risk is to add a buffer of 10–15% to estimated average costs when setting the inclusive rent, and to include a clause in the tenancy agreement allowing the rent to be reviewed if energy prices change materially.
If council tax rates or energy tariffs increase during the tenancy and no review clause exists, the landlord must absorb those increases for the remainder of the fixed term. Should a tenant stop paying rent, the landlord also remains liable to suppliers for all the costs included in the arrangement, utility disconnections resulting from unpaid bills are treated as a landlord management failure, not the tenant's.
Tax treatment
The entire inclusive rent payment counts as rental income for self-assessment purposes, including the portion representing utilities. A landlord cannot report only the base rent and exclude the bills element. The utility costs themselves, gas, electricity, water, broadband, are deductible as allowable expenses, so the tax position broadly nets out, but the gross income figure for reporting purposes is the full amount received. Landlords using August can track the full inclusive payment as a single rent receipt and log utility costs as expenses separately, making it straightforward to reconcile margin and report accurately for self-assessment.
For practical guidance on how to structure an all-inclusive agreement, set fair usage caps, and price in energy volatility, see our guide to bills included in rent.
Frequently asked questions
Can a landlord charge tenants more for energy than they pay the supplier?
No. Ofgem's maximum resale price rules prohibit landlords from charging tenants more per unit than the landlord pays their own supplier. No profit margin is permitted on domestic energy resale. Landlords who overcharge face civil proceedings and may be required to repay the excess.
Can a landlord switch a tenancy from bills-inclusive to bills-exclusive mid-tenancy?
Not without the tenant's agreement. The bills-inclusive arrangement is part of the tenancy agreement and is binding on both parties for the duration of the fixed term. A landlord who wishes to change the arrangement must negotiate and agree the change in writing with the tenant.
Does all-inclusive rent affect how a property is marketed?
From 1 May 2026, under the Renters' Rights Act 2025, landlords must advertise a stated rent and may not accept bids above it. For all-inclusive properties, the advertised rent must reflect the full inclusive amount, and it must be clear in any advertisement what the rent covers.
