Tom Melhuish 7 min read

Are business water rates cheaper than domestic?

Domestic water rates are, on average, 8.7% cheaper than the equivalent default out of contract business tariff. Our study finds that in 2021 an average household property pays £515 per year on water rates compared to £564 paid by an equivalent business property on default rates.

How expensive is water in my area?

The British water network is not one interconnected system. The country is divided into regional water and wastewater networks managed by separate water wholesalers. The amount that users pay for water services in each region depends on the scarcity of water and the cost of maintaining the local water network.

Our study compared the household metered water rates compared to the default business water tariff in each region. All regions show the same pattern that the household rates are slightly cheaper than the default business rates.

See our graph below:

Are business water rates cheaper than domestic?

Where is water most expensive in Britain?

The most expensive region for water rates is the South West where users pay 40% more than the national average. In Devon and Cornwall, the water company maintains thousands of miles of pipes to serve only a small population, pushing up average bills.

Where is water cheapest in Britain?

The cheapest area for water rates is the Thames Basin, where users pay 25% less than the national average. The region includes London and is densely populated, reducing the average cost of maintaining the work network for each user.

How much does water cost for a small business?

Small businesses generally pay water rates under a measured water and wastewater tariff from a business water supplier. Under these tariffs, businesses will pay a combination of standing and volumetric charges that depend on the amount of water used by the business.

Our study has found that a business occupying a property that is the same size and uses the same amount of water as an average household will be charged a slightly higher rate for water than households based upon the default non-household tariff rates.

Small businesses can benefit from switching from the default tariff to more competitive tariffs offered by alternative water suppliers. To see how much your business can save Compare Now.

Are business water rates higher than households?

Yes, our study has found that, by comparing an average household to a comparable business property, default business water rates are, on average, 8.7% more expensive.

The default business water rates assume that a business has stuck with the default water supplier allocated upon deregulation in 2017. The default water rates increase above inflation each year.

Businesses can save up to 20% on their business water rates by moving to alternative contracted rates offered by alternative business water suppliers. See if your business can save by making the switch today.

Our study of domestic versus business water prices

We started by considering the water usage of the average household property. The home we considered uses the average UK household consumption of 350 litres of water each day. We used a standard small water meter size of 15mm and a property surface area, including a garden of 70 square meters.

Using the AquaSwich business water comparison model, we assumed that this property is used by a business and calculated the default business rates for the property in each wholesale region in the 21/22 year.

We then compared the business water rates for these properties against each region’s published household water rates for the same year.

Our study has not considered unmetered water rates as these rely on rateable values, an estimate that each council made of the value of individual properties in 1991. These historic valuations are highly subjective, meaning that the water rates vary significantly from one property to another.

Our study, for simplicity, also considered only regions where the wastewater wholesaler and water wholesaler are the same company. To find out who is your local wholesaler, check out Ofwat’s guide.

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