Deciding who pays what in a shared house

Deciding who pays what in a shared house

Sharing a house with others can be great fun, but there are hurdles that you’ll have to overcome, too. Whether you’re sharing with strangers, students, or your best friends, working out who should pay what should be one of the first things you do. If you get it wrong or forget about it, you could end up paying more than your fair share, and even end up arguing with your housemates over a water bill. Having open, honest discussions from day one makes sense - that way, everyone will be on the same page and pay their fair share.

Below, we’ve put together some tips on deciding who pays what in a shared house… 

Paying the rent

As soon as you move into your rented house, decide how the rent is going to be split. For HMOs or student accommodation, it’s often the case that rooms are let individually, but if you are sharing with friends, you might all decide to split it. Know who is on the tenancy - that way, you’ll know who is liable to pay if one housemate stops paying their way or moves out.

Tenancy agreements can be quite complicated, so we recommend speaking to your landlord or lettings agency and explaining your circumstances. For their protection, they might decide to split the rent equally between X housemates rather than taking one money lump sum.

The easiest way to pay the rent is to divide it between the number of people in the house. If you’re paying £1,200/month and there are six people living in your house, each is liable for a £200 monthly rent bill. There are downsides to this, of course; some might be sharing rooms or only live in the shared house part-time, and you might take the only car parking space.

Alternatively, you could charge different monthly rents based on bedrooms. Sit down with your housemates and decide a price for each room. If you’re adamant about a room with an en-suite, for example, you might want to contribute more to the monthly rent to compensate. 

Another option is to split the rent based on income. This won’t be appropriate for students, but if you’re living with your partner or friends, you could contribute based on salary. If one of your housemates is earning considerably more than the others, they might pay a higher percentage of the rent, though outside of romantic relationships, this can cause tensions.

Splitting the bills in a shared house

The chances are that you’re moving into a shared property where utility bills - everything from gas and electricity to broadband and TV license - aren’t included. Keeping on top of these bills can be a headache, as most come out at different dates of the month, and there are significant consequences to not paying them on time. Nobody wants their electricity to be cut off when they’re on the final level of a new game on the PlayStation. Super frustrating. 

What’s important to note is that, for household bills, whoever is named on the account is solely liable for paying them. You might decide to cover the electricity for example, whilst your housemates pay for a broadband and TV package. But if they forget to pay the bill or can’t afford to, you’ll have to go without WiFi, even though you’ve paid your share.

One solution is to choose a designated bill payer and have everyone set up a standing order every month to cover their share of the bills. Depending on your relationships, you could set up a joint account to make life easier, though this can affect your credit score down the line.

As with rent, you could split the bills based on income or need. If your partner is earning more than you, they might want to pay more of the bills or a higher percentage. Likewise, if you’re living with someone who works from home, they might decide to cover the broadband bill on their own as they need it for their 9-to-5. Discussing ahead of moving makes sense. 

Finally, you might want to consider a bills package provider like Billing Better. Our service will group together all of your utility bills and split the payments equally between housemates. The biggest benefit is that you’ll only pay once per month, which makes it easier to manage your money, and 48-hour broadband installation is available. What’s more, we throw in a free subscription to Amazon Prime to thank you for using us. Endless deliveries and TV shows!

Groceries and day-to-day spending

Another consideration to make when sharing a house is grocery shopping and day-to-day spending. It’s so frustrating when you buy a milkshake from Tesco and wake up to find that someone else has drunk it. Or when you buy a new sofa for the living room but never get to sit on it. Though it’s not ideal, it’s best to shop for yourself, have separate shelves in the fridge and make sure all house purchases related to furniture or entertainment are split.

Having a takeaway? Only pay for what you eat. Modern banks like Monzo have a Split the Bill feature, where you can pay your share of a grocery delivery or takeaway in a few taps.

Nobody wants to micromanage their finances, so setting a clear action plan before you move in makes the most sense. Wherever you’re going, we wish you good luck in your new home!