In a house let room by room in England, bills usually work one of two ways: the rent includes bills, or you pay the bills and recharge each tenant a share. Either way, the landlord is usually the person liable for council tax when each tenant rents only their own room, and if you resell gas or electricity you can't charge more than you paid, under Ofgem's maximum resale price rules. Write your method into each tenancy agreement and keep records of what every bill cost.
This guide explains the options, how to split fairly and the rules that limit what you can charge.
The two ways bills work
Bills-included rent
You hold the accounts for energy, water, broadband and council tax, pay them, and charge each tenant one rent that covers everything. It's what most sharers expect in a house let room by room.
Pros: one payment for tenants, no recharging, easier to advertise, fewer disputes about who used what.
Cons: you carry the risk. If usage or prices go up, your margin shrinks, and you can't simply change the rent mid-period. Rent increases for assured tenancies go through the statutory process: at most once a year, with at least two months' notice on Form 4A.
Bills recharged on top of rent
You hold the accounts and recharge each tenant a share of each bill. The rent is lower, and tenants pay for what the house uses.
Pros: you don't carry usage risk, and tenants have a reason to be careful.
Cons: more admin, more room for arguments, and you must stay within the resale rules for energy. The amounts and method should be clear in each tenancy agreement.
Tenants hold the accounts
Sometimes tenants set up and pay the bills themselves. That's common where a group rents a whole house on one joint tenancy, but awkward in a house let room by room, where tenants come and go at different times and nobody wants their name on the account when they leave.
Council tax in a shared house
Usually the landlord pays
Council tax normally falls on the people who live in a home. But the Council Tax (Liability for Owners) Regulations 1992 make the owner liable instead for certain types of property. "Class C" covers homes lived in by people who each rent only part of the house, such as their own room, and homes built or adapted for people who aren't a single household. In practice that means that in a typical house let room by room, the bill comes to you.
GOV.UK explains the general rules on who has to pay council tax. If you're not sure how your council treats your house, ask them in writing and keep the answer.
When the tenants might pay instead
If a group rents the whole house on one joint tenancy, the tenants don't each rent only part of the house, so the council may treat them as the residents liable for council tax instead of you. It isn't automatic: it can depend on how the house was built or adapted and how your council classes it. Ask the council and keep its answer. See tenancy agreement for a room for the difference between individual and joint tenancies.
Recovering council tax through the rent
Because you're liable, you can't send each tenant a separate council tax bill as if they were. Most landlords include council tax in the rent and say so in the tenancy agreement.
The Tenant Fees Act 2019 limits what landlords can charge tenants on top of rent. Its list of permitted payments includes:
- council tax paid to the council (not to you);
- gas, electricity, other fuel, water and sewerage, where the tenancy agreement requires the tenant to pay;
- broadband, phone and TV services, where the tenancy agreement requires it, but anything above your reasonable costs counts as a banned payment; and
- a TV licence paid to the BBC, where the tenancy agreement requires it.
GOV.UK's guide for landlords puts it simply: you can ask tenants to pay for utilities, internet, phone, TV licence and council tax "they have agreed to pay". So whatever you do, write it into the tenancy agreement from the start.
Reselling gas and electricity
The maximum resale price
If you buy gas or electricity from a supplier and charge your tenants for it, you're reselling it. Ofgem sets a maximum resale price: you can't charge more than you paid for it, including standing charges.
For resident landlords letting to lodgers, GOV.UK puts it simply: "You can only charge the amount you've paid for gas and electricity plus VAT or you could face civil proceedings". The same principle applies when you recharge energy to tenants in a house you don't live in.
Bills-included rent
Whether the maximum resale price applies when energy is included in a fixed, all-inclusive rent (rather than recharged by usage) is less clear, and the guidance doesn't spell it out. The safe approach is to make sure the energy element of the rent reflects what you actually pay, and to keep the bills.
Water and broadband
Water isn't covered by Ofgem's rules; reselling water has its own separate rules, so get advice before charging tenants anything other than your actual cost. Broadband is a service you buy, and the Tenant Fees Act treats anything above your reasonable costs as a banned payment. Recharge only what they cost you, and say how in the tenancy.
Ways to split a shared bill
When you recharge, pick a method, write it into each tenancy agreement, and stick to it.
Equally between rooms
Divide the bill by the number of rooms let during the bill period. Simple and easy to explain. It works well for broadband, where everyone gets the same service.
By room size
Larger rooms pay a larger share. It can be fairer for heating, where a big room costs more to heat. You need a record of each room's size.
By number of people
A room with a couple pays more than a room with one person. Fairer for water and hot water, where use follows people.
Part periods and empty rooms
Decide in advance what happens when a tenant moves in or out mid-bill. The usual approach is to share the bill by days occupied. If a room is empty, its share is normally yours, not the remaining tenants'.
Fair-use limits
Some bills-included tenancies have a "fair use" clause: if usage goes above a set level, tenants pay the extra. Be careful. The clause needs to be clear, fair and in the agreement from the start, the extra charge must stay within the resale rules for energy, and it must be a payment the Tenant Fees Act allows. We haven't found official guidance on how far these clauses can be enforced, so take advice before relying on one. A clause that tenants don't understand causes more trouble than it saves.
Worked example
Names and figures are made up to show the method.
Priya lets a four-room house. Rooms 1 to 3 have one tenant each; Room 4 has a couple. Rent excludes energy and water, which Priya recharges. Broadband and council tax are included in the rent.
The quarterly electricity bill is £420 (example figure), including standing charges.
- Equally between rooms: £420 ÷ 4 = £105 a room.
- By number of people: five people, so £84 each; Room 4 pays £168, the others £84.
- By room size (example sizes): Room 1 is 14 m², Rooms 2 and 3 are 10 m² each, Room 4 is 16 m². Total 50 m². Room 1 pays 14/50 × £420 = £117.60; Rooms 2 and 3 pay £84 each; Room 4 pays £134.40.
Priya's tenancy agreements say heating and electricity are split by room size. She charges exactly the bill total, no more, and keeps a copy of the bill with the split. When the Room 2 tenant leaves halfway through the quarter and the room stays empty for a month, Priya pays Room 2's share for that month herself.
Council tax is billed to Priya because each tenant rents only their own room. It's included in the rent, so tenants never see a separate charge.
Choosing what's right for your house
There's no single right answer. A few questions help:
- Who are your tenants? Professionals and students moving in at different times usually prefer bills-included rent. A settled group renting together may prefer to manage bills themselves.
- How old is the house? Poor insulation and old heating make usage harder to predict, which makes bills-included rent riskier for you.
- How much admin do you want? Recharging means splitting every bill and chasing every share. Bills-included rent moves that work into setting the rent.
- Do you have smart meters? Accurate readings make recharging and changeover readings much easier.
If you change approach for new tenants, write it into each new agreement and keep the old arrangement for existing tenants until their tenancies end or change.
Records to keep
- every bill, with the period it covers;
- how you split it and each tenant's share;
- what you added to each tenant's account and what they paid;
- meter readings at each move-in and move-out.
Meter readings at changeovers are the single most useful habit: they settle most arguments before they start. Take them as part of your start and end of tenancy inventory.
How Rentap helps
Rentap lets you split a shared bill (electricity, gas, water, broadband, council tax or anything else) between the rooms equally, by room size or by the number of people. If you recharge, you can add each share to the tenants' accounts, so it shows alongside their rent and payments. You can keep the house's expenses with their receipts, and your start and end of tenancy inventories have room for notes and photos, such as meter readings. Rentap doesn't check the resale rules for you. See rent tracking and pricing.
Related reading: how to price a room, lodger or tenant and the glossary of letting terms.
Sources
- Council Tax (Liability for Owners) Regulations 1992, regulation 2 (legislation.gov.uk)
- Council Tax: who has to pay (GOV.UK)
- Ofgem: resale of gas and electricity, maximum resale price guidance
- Rent a room in your home: rent, bills and tax (GOV.UK)
- Tenant Fees Act 2019 (legislation.gov.uk) and Schedule 1: permitted payments
- Assured periodic tenancies: rent and other payments (GOV.UK)
- Assured periodic tenancies: rent increases (GOV.UK)
- Assured tenancy forms for privately rented properties from 1 May 2026 (GOV.UK)
Last checked: 10 October 2026. This guide is general information, not legal advice.