A government freeze on energy bills will take effect from Saturday, 1 October. However, the £2,500 figure, which will be in place for two years, will not apply to the average household. We – like our readers – will obviously also have an interest in how this will affect people renting properties and more importantly, our own tenants.
So, what exactly is being proposed?
It is anticipated, that energy bills will be frozen at 27% above the current price cap – which was set in April – but households will still get a £400 discount as well, called the Energy Bills Support Scheme, in October.
Most households will receive this as a discount on their next six bills, or as a payment direct in their bank account. In addition, pensioners are also entitled to a £350 winter fuel allowance. Those on disability benefits are also being given an additional £150, and low-income families on benefits have received £326 so far, with another payment due soon.
But the £2,500 figure refers to a ‘national average family using 12,000 kWh a year paying by direct debit’. Those who use more, you will pay more. People who pay for their energy usage differently – for instance via pre-pay meters, or who pay after receiving a bill, will also pay more. Many – but not all -tenants pay in this way.
Whilst this government intervention in the market is welcome, it remains to be seen how this will affect renters overall and importantly, relieve the cost of living crisis that is currently impacting tenant’s ability to pay their rent.
There is a corresponding initiative by the government to support businesses with their energy bills (see related article). However, it is not entirely clear how this will affect shared accommodation (HMOs) where the energy usage is typically paid for by the landlord. It is important that this remains affordable to the landlord, so that – in turn – rental prices can be kept reasonable for the tenants. Otherwise, there is a risk that the investment property will no longer be profitable and will therefore have to be sold or rents will have to be increased significantly.
We will be watching this area closely and reporting any developments to our readers.
