Energy prices
Following the article in the last newsletter, Ofgem announced that the energy price cap would rise by 54% from 1st April for mains gas and electricity supplies. Those on standard tariffs paying for dual fuel by direct debit will see an increase of around £693 to just over £1900 per year.
Prepayment meter customers are also affected with annual costs increasing by more, to just over £2000 per year (based on average usage)
The price cap is a cap on a unit of gas or electricity, with standing charges taken into account, not the user’s overall bill so is affected by their consumption. Also, overall costs for those paying by different methods will be higher than these estimates.
The Government announced a package of support for households:
An Energy Bills rebate for all domestic energy customers as a discount of £200 to their electricity bill from October. This will be automatically recovered from bills in instalments of £40 over 5 years from 2023, when wholesale gas prices are expected to start reducing. However, this is not guaranteed, especially with recent events in eastern Europe.
A Council Tax rebate of £150 for households in Council tax bands A to D. This will be automatically applied to bills and will not need to be repaid.
A discretionary fund to support vulnerable households on low incomes that do not pay Council Tax or pay Council Tax for properties in Bands E to H. This will be administered by local authorities when the details are finalised.
What should tenants do if they are struggling?
Households that are struggling should not ignore the problem. They should contact their energy supplier as soon as possible. Depending on their circumstances they may be eligible for extra help such as debt repayment plans, payment breaks, emergency credit for prepayment meter customers, priority support or other financial assistance.
The Breathing Space Scheme allows households time to receive debt advice and find a solution to their debt problems. The National Debtline can be contacted on 0808 808 4000 or www.nationaldebtline.org for more details.
The Citizens Advice consumer service can provide advice on how households can resolve issues with their energy supplier. They can be contacted by calling 0808 223 1133 or via webchat on their website:
Why should landlords act?
The impacts of the price rises on tenants will be immense and for some, crippling. Some will have to make the choice of whether to ‘heat or eat’. If a property is not heated properly, in time there will be damp and mould growth – the property will deteriorate.
Tenants living in damp properties are likely to experience more health issues that could affect their ability to work, and therefore earn. Children’s education is impacted especially if they do not have a quiet, warm space to do their homework, or their health is affected by damp leading to time off sick from school. Older children may avoid spending their spare time in the property, perhaps not time well spent outside of the family environment.
When finances are stretched, choices will have to be made – rental payments may become harder to make. Tenants may consider sub-letting or taking in a lodger, even if this breaks their tenancy agreement.
Under the Minimum Energy Efficiency Regulations a property cannot currently be rented out if it has an Energy Performance Certificate (EPC) rating of F or G. The maximum penalty for breaching the Regulations is £5,000 per property.
The Government have consulted on changes to these Regulations with a view to changing the minimum EPC rating for new tenancies in rented properties to a C by 2025 and existing tenancies by 2028.
Improvements to the insulation of properties will both help to cushion the impact of rising energy prices and will help landlords to comply with Regulations.
