Billing Better work within the lettings space to help agents, landlords and tenants to set up their bills and manage void period admin. This report is based on the information available in early February, but as we know from what happened last Autumn, energy prices can change at the drop of a hat (or Prime Minister).
The cost of living crisis has shone a bright light on the cost of energy and how it has increased over the last 12 months. In October (2022), the cost of energy increased for the average household to £2,500 per year after the government intervened to put in place the Energy Support Scheme - as we all know, it could have been a lot worse!
The first part of this scheme - alongside the £400 government rebate - comes to an end on 31st March 2023 which will, as things stand, see energy bills rise by a further 20% to £3,000 per year (based on an average home size energy usage).
The combination of this 20% increase plus the £400 government rebate (paid by suppliers in £67 per month installments) will see a large increase to monthly payments, so how does this impact your landlords and tenants?
1. Void period bills for landlords
Your landlords will pay the standard variable tariff energy rates for their void periods - this means that their tariff will equate to around £3,000 per year based on the average home size.
Because of the large increase in the cost of energy, it’s now more important than ever that letting agents and landlords provide meter readings to energy suppliers as close to the check out (and then check in) dates as possible.
The reason for this is because many energy suppliers will provide bills based on estimates assuming that someone is living in the property without the context of an empty void period.
2. Landlords offering their homes with bills included
Unless a landlord is on a fixed energy tariff, their energy bills will increase by around 20% as of 1st April. If a landlord has factored this into their charges to their tenants, then this wouldn’t be an issue, however if they haven’t then the landlord may need to have a difficult conversation with their tenants about increasing their monthly payments (subject to correct legal process).
3. Your tenants (already in tenancy)
Much like landlords offering their homes with bills included, unless the tenant is locked into a fixed tariff, their energy bills will increase by 20% from April onwards.
There are rumours of green shoots of recovery within the energy pricing space, so it may be that in the coming months, tenants (and landlords) will be able to switch and fix onto prices that are better than the Energy Support Scheme.
* Billing Better provide a free comparison tool which can be sent to all tenants (in tenancy or new) to offer the best prices available for energy and broadband.
4. New tenants moving in
When a tenant moves into a new property, there’s currently no reason (because all energy prices are the same) or ability to switch energy suppliers (because energy suppliers are not wanting to take on new customers).
This means that your tenants will need to know who their energy supplier is when they move into their new home so that they can quickly set up their bills for their new home.
Another option could be for your tenants to bundle their bills into a single monthly payment (organised by Billing Better) to help your tenants to budget and get their bills set up from moving day.
Looking for a solution which both manages all void period administration for your landlords which also helps your tenants to set up their home? Feel free to book a demo here.