How can landlords and tenants get support with rising energy bills?

Household energy bills have been rising rapidly in recent months and are set to increase further in the winter.

How are landlords and tenants being affected, what support is available, and what can be done to keep bills down?

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Energy price cap rises – what’s the impact for landlords and tenants?

The energy price cap is the maximum price suppliers can charge consumers for each unit of gas and electricity they use.

It increased by 54 per cent in April 2022 and is set to rise again in October.

Cornwall Insight estimates that the average annual household energy bill could rise to over £3,500 in October, up from £1,971 in April.

It’s also been predicted that the next time the cap is reviewed in January 2023, average annual bills could rise beyond £4,600.

According to energy company E.on, one in eight households are struggling to pay their energy bills and this could rise to 40 per cent by October.

Rising bills are likely to cause problems for many tenants in the coming months, while landlords who pay bills on their tenants’ behalf could also be affected financially.

Why have energy costs increased so much?

The cost of gas and electricity has been rising steadily since 2021 and the end of Covid-19 lockdowns.

The war in Ukraine has reduced gas supply from Russia, impacting costs.

Rising energy costs have led to some suppliers going out of businesses. As a result, energy regulator Ofgem has been increasing the price cap to stop this happening to more suppliers.

Unfortunately this means higher bills for consumers.

The Energy Bill Support Scheme – what do you need to know?

Landlords and tenants can access the Energy Bills Support Scheme, which is part of the government’s £37 billion Help for Households cost of living package for the winter.

Almost 30 million households across the UK will receive a £400 discount to put towards their energy bills. The discount will be split like this:

• £66 discount applied to October and November energy bills
• £67 discount applied from December to March 2023

Households don’t need to apply for the discount. It’ll be delivered in different ways, depending on whether you pay for your energy bills through Direct Debit, payment card, or a meter.

Higher energy costs – what do bills-included landlords need to consider?

If you charge your tenants rent inclusive of bills, you have to meet maximum resale price rules. This means you can’t charge tenants more than the price you’re paying for it.

As a result, you’ll need to pass the £400 discount on to tenants in the form of a lower monthly payment.

Ahead of the next price cap rise and the introduction of the Energy Bills Support Scheme, it could be beneficial to contact your tenants.

You can explain how the discount will work with their inclusive bills and also get an idea of whether they’re struggling with the rising cost of living.

If you charge tenants more than you should for their energy, or don’t pass on their £400 discount, they’re being advised to contact Ofgem.

How can landlords and tenants reduce energy bills?

Rising energy bills are highly likely to affect most households, however there are some things landlords and tenants can do to minimise their impact. Here’s an overview:

• install energy efficient appliances and lighting
• install a smart meter so tenants can track consumption
• improve insulation and draught-proofing
• look for a better energy deal and switch supplier

Read our guide to improving your rental property’s EPC rating for more tips.

Are you concerned about rising energy bills? Let us know in the comments below.

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