Gas and electric sub meters

megadishu

I am buying a property with a side extension offering bedroom, sitting room, kitchen, bathroom, parking, garden and own front door. To date the extension has been used as part of the main house.

I want to rent out the main house and separately rent out the 1 bedroom extension as its own unit blocking off the door / putting fire safe door / sound insulation to the one internal entrance from the extension to the main house.

Does anyone know how easy it is and rough costs to put in sub meters for electricity and gas?

Thank you for any advice and information.

Wywth

megadishu wrote: »

I am buying a property with a side extension offering bedroom, sitting room, kitchen, bathroom, parking, garden and own front door. To date the extension has been used as part of the main house.

I want to rent out the main house and separately rent out the 1 bedroom extension as its own unit blocking off the door / putting fire safe door / sound insulation to the one internal entrance from the extension to the main house.

Does anyone know how easy it is and rough costs to put in sub meters for electricity and gas?

Thank you for any advice and information.

If I were a prospective tenant, I would pass your property by as soon as I knew you were charging for electricity via sub-meters.

I would want my own proper meter so that I had the choice of supplier/tariff.

I would urge you to get independent supplies/meters installed. Expect it to cost about £10k per fuel. (but get proper quotes as it all depends on the exact situation) Perhaps you could reflect this expense into your offer price, but it all depends on the asking price and what other interest exists.

megadishu

I am getting a quote for a separate electricity consumer board so the electrics are separate but am not sure if this means I can use different suppliers as it has the 2 separate boards.

I have noted your comment that tenants maybe put off if not able to choose their own supplier.

10k is a huge amount of money as I do not want to permanently divide the property into 2, just want to be able to rent out a 3 bed house and a 1 bed flat. I could build in the rent to include bills but then would be open to the person renting not worrying about their use of power.

ChumpusRex

Just istalling a 2nd electricity consumer unit, just means you split a single supply into 2. It's still 1 supply from one supplier.

Installing a new consumer unit is the expensive bit; if you're getting that done, you should be able to add a sub-meter could for £100 extra.

Sub-metering is seen as bad, and it does mean that your tenant can't choose their supplier. However, things depend on who you are targeting as a tenant.

In general, most tenants that would occupy an annexe will be low users, and for them sub-metering, even with LL on the worst tarriff possible will be a lot cheaper than a dedicated supply on the best tarriff available.

Remember, that the overwhelming majority of the retail price of electricity is the cost of the meter, and account management. Submetered supplies generally work out cheaper for the tenant for this reason. You also tend to end up with cheaper rent, as the cost of installing a new supply is BIG. Moreover, once installed it's difficult to get rid of.

Cardew

Firstly it is illegal to re-sell electricity/gas at more than cost.

Secondly how is the gas to be used in the extension? install a Boiler for heating and hot water?? Don't forget as a landlord you must have an annual safety certificate for gas - in both properties.

With your arrangement the main house would be billed by the Utility company for all the gas and electricity consumed in both units. Some arrangement would need to be made for the tenant of the extension to refund the main house tenant.

That could cause complications if the tenants move in/out at different times or the extension tenant moves out refusing to pay. Also all tariffs now have a Daily Standing Charge, how is that to be apportioned?

Have you thought about water charges with two properties? Also Council Tax, you need to get both properties allocated a new Band.

Wywth

ChumpusRex wrote: »

...
In general, most tenants that would occupy an annexe will be low users, and for them sub-metering, even with LL on the worst tarriff possible will be a lot cheaper than a dedicated supply on the best tarriff available.

Remember, that the overwhelming majority of the retail price of electricity is the cost of the meter, and account management. Submetered supplies generally work out cheaper for the tenant for this reason. You also tend to end up with cheaper rent, as the cost of installing a new supply is BIG. Moreover, once installed it's difficult to get rid of.

I'm sorry but I disagree.

For a low user, one of the worst tariffs would arguably be nPower Standard tariff paid on receipt of bill for gas and Scottish Power Standard (No standing charge, paid on receipt of bill) for electricity

For Midlands region (for example), this has a yearly standing charge for gas of £166.33 and a unit charge of 3.952p
Lets assume the standing charge is split qually between the two properties, so £83.16.

Compare to say Flow Energy who would charge £90.06 standing charge and 3.519 per kWh

The "low user" would have to be using less than 1500kWh per year to be worse off on Flow, and if they only used that little gas they would be about 50% better off with ebico who charge no standing charge but 5.051p/kWh

For electricity from Scottish Power this would cost 26.899 p for the first 225 kWh per quarter, and 13.566 p thereafter .

Compared with say Ebico who would charge 15.897 p /kWh, the "low user" would need to be using in excess of 5100 kWh/yr (the average is only 3300) to be better off with SP.

I agree rents achieved may sometimes be less with sub-meters due to the lower desirabilty of such property.

There is no difficulty in removing separate supplies, assuming the property use later changes to that of a single dwelling house. In fact some suppliers will push to make this happen.

megadishu

Thank you for the latest. Very aware of gas safety and other legal requirements and also have found out that the electricity supply is already separate. As the water is not metered, I will pay for that so no problems. Just the heating to sort out and may go for an electrical option to save other problems.

I most certainly would not profit on any tenants supplies, nor would do anything illegal!! I am most certainly not that type of person or landlord.

Cardew

megadishu wrote: »

Thank you for the latest. Very aware of gas safety and other legal requirements and also have found out that the electricity supply is already separate. As the water is not metered, I will pay for that so no problems. Just the heating to sort out and may go for an electrical option to save other problems.

I most certainly would not profit on any tenants supplies, nor would do anything illegal!! I am most certainly not that type of person or landlord.

If the property is split into two dwellings, then(technically) it should have two water accounts and each should pay Council tax.

I appreciate it is a small house, but if, say, a big mansion was split into 6 flats(as often happens) it would not be acceptable that only one flat would pay for un-metered water and the rest pay nothing, ditto with Council Tax. Same principle!

Unlikely to be discovered in your case unless tenants get upset for some reason.

megadishu

It will be one dwelling not 2 so easier if I just pay for all the water for both parts, certainly would not expect one to pay for the other. Learning loads which is always good!!

Electricians report on its way and now chatting to a good plumber.

Thank you

pooch

megadishu wrote: »

It will be one dwelling not 2 ...

So have you changed your mind about it's intended use?

megadishu wrote: »

...I want to rent out the main house and separately rent out the 1 bedroom extension as its own unit ....

If so, no point having 2 separate electricity supplies.

megadishu

It will be one dwelling but with locked door between the different parts of the property. With just one electrical supply.