Gas and electricity bills across the UK are set to increase by 54%. So, what can you do?
Landlords with bigger properties are braced for a fresh wave of rental arrears as energy bills rise this month. Energy bills are expected to rise by 54% to just under £2,000 a year*. It will be the biggest rise in living memory and many tenants and landlords are understandably worried.
Here's some more information about what landlords can expect as well as some tips on how to make your rental property more energy efficient and potentially save money.
Which types of landlords will be hardest hit?
The increase in energy bills affects each and everyone of us but there are some landlords who face tougher decisions than others. Buy-to-let investors who own HMOs let on a room-by-room basis. They also tend to include energy bills and council tax within the price of the rent, and so face a difficult choice of whether to shoulder the costs or raise the monthly rent for their tenants.
Is this the final energy rise?
The regulator, Ofgem, announced the energy cost increase several weeks before the war in Ukraine had started and the conflict has further exacerbated the situation. Cornwall Insights has predicted that the next price cap increase in October will jump to over £2,900 a year for the average energy user**.
What can landlords do to mitigate the effect of rising bills?
If you’re a landlord of a HMO or numerous HMOs and you expect your energy bills to increase significantly, then you do have the option of increasing rents. A good agent can help with this and our lettings department has helped our landlords achieve an 8% increase in rental growth in just one year. This is one way of offsetting the rising costs.
Is there anything we can do to decrease the rising bills?
Energy efficiency is already high on the government's agenda, and landlords are potentially going to have to comply with new EPC ratings set to come into play over the next few years. Savvy landlords will need to invest to increase their EPC ratings to minimum rating of C on all new and existing tenancies by 2028. If you’d like to learn more about how you can make your rental property more energy efficient and potentially save money, we’ve created a guide to give you a starting point
What help is available?
Provided that you pay council tax, and your property is in bands A-D, you will receive a £150 rebate in May. Your most recent bill will tell you which band your house is in. Those who live in homes in bands E to H may also qualify if they receive certain benefits. If you’re worried about how the energy bills increase could affect you, get in touch with us anytime. We also have an article on exactly how to insulate your property.
How will the Spring market affect landlords and investors?
There's some brilliant news on the horizon for landlords and investors. The capital growth that we've seen recently means that the money you’ve put in bricks and mortar is gaining in value. Rents have also increased dramatically since the start of the pandemic; they’re now close to an average of £1,000 a month. Renters are now paying £62 a month more than at the beginning of the pandemic***, according to Zoopla's Rental Market Report. Many investors are in fact undercharging for their area and property type. If you’re a landlord with a property to rent, it’s worth getting a fresh valuation this Spring to see how much you could charge for your property. It’s free and takes less than 60-seconds.