How cost conscious is your block

Most of us have been affected one way or another by the economic downturn – we are certainly less inclined to use our credit cards than we were a few years ago and we are all looking for ways to cut back on the bills,  especially with the rise in VAT looming. Here are some suggestions that could help RMCs and leaseholders keep their costs down.

Utility bills

When you add up all the bills for electricity, gas, telephone calls and water, they account for a considerable proportion of the monthly outgoings. It is always worth keeping an eye on what you are paying for utilities. Consider changing provider if another company can offer a better deal. You will not notice any difference in your supply but customer service and response times to queries can vary enormously between utility companies. Ask around – can friends or family recommend their supplier in terms of cost and service? Changing provider is not a complex process and is quickly completed, but do expect a call to ask you why you are moving to a different company. If you pay your bills by direct debit you will need to contact your bank to cancel your existing arrangement and set up a new one

Gas and electricity

Consider using the same provider for gas and electricity – a dual fuel discount may be available. Look out for special offers: some companies offer additional incentives such as ‘Nectar’ points to new customers which you can then use to pay for supermarket or high street items.

Some quick wins are: • Use low energy light bulbs, switch off lights and don’t leave appliances such as TVs and computers on standby. • Invest in an energy monitor or employ an electrician to do an energy survey of your home for you to identify which appliances use the most electricity. • When buying new appliances choose those that are A- or B-rated for energy efficiency. • If you live in an older block and have open fires, use them, if you have somewhere to store the fuel. A few logs will keep you warm and save you turning up the central heating – but don’t forget to get the chimneys swept if you haven’t lit a fire for a while. Check first that you do not live in an area that restricts the use of solid fuels or a smoke free zone. • If your hot water tank isn’t lagged, do it this weekend. It is cheap and easy and will save you money. • Invest in fully lined curtains and insulation around doors and windows – this will help keep the heating bills down if you don’t have double-glazing.

Telephone and broadband

Telephone calls are another major overhead for many of us, especially if we have teenagers in the house or work from home. There are lots of deals out there and it is worth going to a cost comparison website such as www.homephonechoices.co.uk to find out if you could be paying less for your phone. Check your contract to make sure you’re not tied into a fixed period with your provider. Switching phone companies is a simple process, which shouldn’t take more than 14 days to complete.

You can even do it online. For those with broadband, it can be more cost effective to bundle the cost of a landline and broadband together by using one provider for both – you could even add mobile calls and satellite TV. Sky and Virgin media both offer TV and telecoms packages. If you do decide to change broadband provider, don’t forget to check the speed of your new provider’s broadband service in your area and ask how long it will take to connect you. This is particularly important if you rely on your internet connection for work. If you don’t want to change provider but are keen to keep phone bills to a minimum, look at the small print on your next bill: making off-peak calls is cheaper. Talk Talk offer evening and weekend packages and BT ’s  ‘Friends and family’ gives you cheaper calls to certain numbers. All providers have their own tariffs so check your telephone company’s website for more information.

You might even consider dropping the landline altogether if you can get a good mobile signal at home – there is no line rental on a mobile, contracts are very competitive and you will be offered a new handset free of charge on a regular basis. If you live in a mobile signal blackspot – there are products on the market such as Vodafone’s Sure Signal, that claim to give you a strong mobile phone signal in your home, using your home broadband. It boosts the signal throughout your house for up to four people at the same time. To use, you need a broadband connectionwith a minimum line speed of 1Mbps, plus a 3G mobile phone.

Water

Although UK water companies have been privatised, the market is not open to competition, so you can’t switch provider in the same way as for other utilities. Nor are bills based on the amount of water you use. Unlike gas and electricity, water bills are still based on the rateable value of your home.

The only way to ensure that you are only paying for the water you use is to opt to fit a water meter. Only 37% of UK homes have a water meter but having one installed could save you money – and help the environment. If you know you’re paying for every unit of water you use, you are unlikely to waste it.

The average water bill in England and Wales is around £360 a year. For those households with meters, the average bill falls to around £300. However the price of water differs from region to region and so before deciding to switch to metered water, it’s worth finding out whether or not this would really save you money. A rough indication is to look at the number of bedrooms in your flat – if you have more bedrooms than people, a meter could save you money.

For a quick way to estimate how much you could save, go to www.uswitch.com or the Consumer Council for Water website at www.ccwater.org.uk. Both sites have tools to help you calculate your possible savings, depending on where in the country you live.

Suppliers Every block of flats uses a range of suppliers – some deal with aspects of the block itself, such as gardeners, window cleaners and lift engineers and some are employed by individual residents, such as plumbers, electricians, and cleaners. RMC directors that are responsible for employing suppliers on a regular basis, should ensure that they revisit the costs involved in regular repairs and maintenance on a regular basis. By shopping around not only can you find alternative companies or individuals who might be able to do an equally good job at a better price, but if existing suppliers know that you are aware of the market rate for their services, they may be less inclined to put their rates up.

For individual leaseholders, the cost of employing tradesmen to do small household jobs can be prohibitive. RMCs are in a great position to help leaseholders by encouraging them to pool their resources. Why not employ a carpenter or painter and decorator to bundle a number of small (or not so small) jobs for different residents together over a few days or weeks. This could keep costs down for the tradesman because he may be able to buy supplies in bulk and has less travelling time to and from jobs and as a result may be willing to give a better price. Don’t forget that some tradesmen are also willing to give a slightly cheaper price for cash.

However, cheapest isn’t necessarily best and doesn’t always offer value for money – always check tradespeople’s credentials and use those that are members of reputable trade associations or are professionally qualified. Check they have the relevant insurance cover should problems arise. Never employ anyone who turns up on your doorstep touting for business, no matter how convincing they are.

Insurance It is often assumed that insurance premiums will automatically increase year-on-year. But by shopping around, RMCs or their managing agents should be able to check that they are really getting value for money from their insurance policy, which could account for up to 20% of residents’ annual service charge.

Insurance is a highly competitive business, so if you have a well-run block and haven’t made an unusually high number of claims, there is no reason not to check that you are getting good value from your policy. The best way to ensure that this is the case is to use a reputable broker who should test the market on your behalf on a regular basis, giving you peace of mind that when your renewal date comes around you are not automatically renewing your policy regardless of other available options. If you arrange your own  insurance you can test the market yourself with a little legwork. First, familiarise yourself with the details of your building, its age, type of construction and recent claims history. Next, check the rebuilding or ‘declared’ value of your block, either by looking at your existing insurance certificate or by contacting your insurer.Armed with this information, the next step is to get at least three like for- like quotes from a range of brokers who specialise in blocks of flats insurance. You will need a detailed breakdown of the features of each policy so that you can compare them with your existing cover. 

Managing agents Don’t assume that your managing agent is the only one who can offer you a good service for a reasonable price. Even if you are satisfied with your managing agent, talk to others in the area – find out what services they can offer and what they charge. Don’t take their word for it though. Ask them which blocks they manage in your area and talk to the residents to find out if they are happy with the service they are getting. 

Right to manage If you and your fellow residents wish to exercise your right to manage under S20, going to a company that specialises in taking you through the process can be costly. Instead, why not consider going down the do-it-yourself route? You could save considerable sums of money and increase your knowledge and understanding of the leasehold system at the same time. If none of your leaseholders has the time or the inclination to do the legwork that is involved, you may find that by doing a lot of the necessary research and acquiring appropriate documentation yourselves, you could save a considerable amount in professional fees.

Service charges The level of service charges is affected by the annual expenditure necessary to keep a residential block in good order and sufficiently insured. If these costs are monitored on a regular basis then service charges should remain reasonable. However, problems arise when some leaseholders do not pay or are late in paying their service charge and the RMC falls into arrears. This is bad news for the whole block – repairs cannot be carried out, suppliers can’t be paid and everyone suffers. One way to ensure that this does not happen is for the RMC to set up direct debit payments for residents. This way the cost of service charges is made more affordable by spreading payments across a number of months and the RMC can plan ahead knowing that it will have the money it needs to maintain the block to a high standard.