Agents, landlords and tenants alike face the prospect of higher bills because of the Russia-Ukraine crisis.
In terms of energy costs, an analysis by business consultancy Hargreaves Lansdown shows that while the UK gets far less gas from Russia than the rest of Europe – at around three per cent – this will not prevent sky-high prices on the international markets.
“We’re incredibly dependent on gas, because more than a third of houses have gas central heating, so the impact will be widespread” warns Sarah Coles, senior personal finance analyst at Hargreaves Lansdown.
“We’re already facing eye-watering price rises in April, when the energy price cap rises 54 per cent – or almost £700 a year. If wholesale gas prices continue to rise, it could mean more price hikes are on the way when the price cap changes again in October” she adds.
Energy regulator Ofgem is currently consulting on possible changes to the way the price cap operates after this point. Among the options are switching to review the price cap every three months, or sticking with six months but allowing more regular reviews in exceptional circumstances.
The worst case scenario means another possible rise in October, and then another one as soon as January 2023.
In terms of petrol costs for agents, landlords and tenants, she says the global oil price is already edging closer to $100 dollars a barrel, which will quickly feed through to garage forecourts.
“We have seen petrol and diesel hit record highs, with petrol hitting £1.49 last weekend. This action is highly likely to push it past £1.50. Diesel has already breached this milestone, and is on its way even higher” explains Coles.
She adds: “The government could do something about this, because it’s responsible for the lion’s share of the cost of filling up the car: 40 per cent of the overall cost is fuel duty and 17 per cent is VAT.
Coles also warns that food prices are likely to rise – Russia and Ukraine export substantial amounts of wheat, corn and sunflower oil which – if such exports stop – will push up global food prices including those supplied to the UK.
This could hit less well-off tenants.
