Rik Smith, Head of Tenant Services at Goodlord, outlines in this tips piece how agents can support tenants with rising energy bills as the UK's energy crisis continues to bite.
Amid reports of soaring energy prices and collapsing providers, tenants are likely to be worried about rising costs and the implications of their current supplier going bust. And whilst the government has assured it’s not an issue of supply, tenants may need guidance from their agents during this period of uncertainty.
Here, Rik Smith, Head of Tenant Services at Goodlord, outlines his suggestions for how agents can support tenants through the months ahead.
Point fuel-poor tenants towards the financial support they’re entitled to
If your tenants are struggling to keep up with the bills, it’s important that they are aware that most suppliers do have support available for low income and fuel-poor households. This includes the Warm Home Discount, which provides eligible households with a £140 discount, as well as Winter Fuel Payments and Cold Weather Payments, which will help ensure those most vulnerable are better able to heat their homes over the colder months.
Having an open and honest discussion with your tenants can help you to gain an understanding of their situation, allowing you to offer the right level of support. Some of these payments will be made automatically, but others need to be applied for, which means speedy action could make a big difference. As a first port of call, tenants should contact their energy supplier, who will be able to help tenants access financial support, and ensure they’re on the cheapest available tariff.
Outline what happens if their current supplier goes bust
Nine energy suppliers have gone bust so far this year, affecting 1.9 million households and the reality is that more energy suppliers will go under this winter. Let your tenants know in advance that there's no need to panic if this happens, and their power will not be cut off.
The government and Ofgem have stated that the current crisis "is not an issue of supply" and "the UK benefits from having a diverse range of gas supply sources with capacity that can more than meet demand”. Instead, within a few days a new supplier will be appointed and your tenants will be switched over on a new "deemed" contract, with energy supplies continuing as normal.
Advise your tenants to take a meter reading as soon as they hear about their supplier going under (or better still, take a photo of the meter with the reading and serial number visible) and then to sit tight until the new supplier gets in touch. They should do this rather than looking to switch supplier immediately as this could create additional complications.
Encourage your tenants to find out what price increases means for them
As the price of energy continues to rise, advise your tenants to check who their supplier is and what tariff they are currently on using a recent energy bill. If your tenants are on a standard variable tariff or prepayment meter, they will be subject to the Energy Price Cap increase on 1 October 2021 of 12% on 1 October 2021.
This will affect approximately 15 million households (over 50% of UK households), according to Ofgem. Those on standard variable tariffs paying by direct debit will see an average increase of £139 from £1,138 to £1,277. Prepayment customers will see an average increase of £153 from £1,156 to £1,309.
If possible, Ofgem recommends "shopping around for a better deal", although these will be hard to come by at the moment. But if they're on a fixed rate tariff, the price per unit of energy is locked in for a specific period, usually 12 or 24 months, and as such, they are probably best to remain on their existing plan until the end of their contract. Ensure that your tenants are making informed decisions about their next course of action.
Improve the energy performance of your properties
Despite properties needing energy to be comfortable, there are other steps that landlords and agents can take to ensure their properties are as efficient as possible, keeping costs down for tenants. Making sure that the windows and doors are fitted properly to keep heat in is an easy assessment to make, and routinely servicing boilers and heating systems can be beneficial in avoiding costly repairs and recognising when improvements are needed.
The energy performance of properties is so often determined by their ability to retain heat. Smart meters and low-energy bulbs can also help to make a difference, so check in with your tenants to see if any extra steps can be taken to improve the energy efficiency of their home or the appliances within them.