What rateable value is

Rateable value (RV) is an assessment of a property’s annual rental value. Between 1967 and 1990, the Inland Revenue’s District Valuer gave one to every property, weighing up things like its size, condition and location. When the rating system was reformed, the government froze rateable values in 1990, so the figure used on a water bill today is the same one set more than thirty years ago.

How it is used to charge for water

For premises without a meter, water retailers are required to bill on that 1990 rateable value. The charge is built from three parts:

• Rateable value, times a clean water rate, for the water supplied.
• Rateable value, times a wastewater rate, for taking it away and treating it.
• Fixed standing charges, for the running costs of the connection.

Add those together and you have the bill. The key point is that two properties with the same rateable value pay the same for water, whatever each one actually uses.

Why it often costs more

Because the charge is tied to a frozen valuation rather than your usage, it can be a long way from what you would pay on a meter. A business that uses very little water still pays the full rateable-value charge, and there is no reward for using less. It also means a quirk of a decades-old valuation can leave one business paying more than a similar one next door.

Newer premises are a special case. Anything built after 1990 has no rateable value at all, so instead of an RV charge it is billed on an assessed charge, an estimate based on the property and its likely demand.

Should you switch to a meter?

For most low and moderate users, a meter beats rateable-value billing, because you only pay for the water you actually use. A meter also makes you eligible for allowances, such as leak and return-to-sewer adjustments, that unmetered charging doesn’t offer. You can usually request one through your retailer.

If your usage is genuinely high and steady, the rateable-value charge might occasionally land in a similar place, but the only way to know is to compare the two.

Rateable value and assessed charges

Rateable value billing and assessed charges are close cousins. Both estimate your water cost from the property rather than a meter. The difference is mainly in how the estimate gets built. The practical effect is the same, because you pay a fixed figure whatever you actually use.

How to move off rateable value billing

If your site can take a meter, you’re rarely stuck on rateable value. Moving to metered charges means paying for measured use, and for a lot of businesses that works out lower. Our business water rates page sets out how metered charges are built.

Start by confirming who bills you through our who is my water supplier guide, then look at whether a meter makes sense for your site.

Where rateable values came from

Rateable values were the basis for domestic rates until 1990, when council tax took over. The values themselves were frozen at that point and never reassessed. So a water charge built on rateable value today rests on a property valuation that can be decades out of date.

That history explains a lot. It’s why two similar properties can carry very different rateable values, and why a bill based on them can feel so disconnected from what you actually use. The number was never meant to track your water consumption. It just became a convenient way to split the cost.

Rateable value FAQs