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Tenants whose energy consumption is covered by all-inclusive rent need more transparency over their usage to ensure they do not get ripped off by landlords, a campaign group has stated.
Dan Wilson Craw, deputy director at Generation Rent UK, was speaking following the recent announcement of the government’s Energy Price Guarantee which will cap domestic bills at £2,500 per year. Including the £400 discount announced in May, this will keep bills at around £2,100 for the typical household.
Under guidelines issued by the Department for Business, Energy and Industrial Strategy (BEIS) landlords which charge an all-inclusive rent incorporating energy costs are “encouraged” to come to an agreement with their tenants on how to reflect the Energy Price Guarantee in rent levels.
BEIS added that it is exploring a “full range of options to ensure this happens, including using the planned emergency legislation”.
According to Citizens Advice 13% of private tenants pay for their bills as part of their rent. Wilson Craw said applying the Energy Price Guarantee to these customers will be “quite complicated” and without more transparency over their energy usage, it will be hard for renters to negotiate a fair deal.
He told Utility Week: “It’s a section of the market we don’t know a huge amount about. A lot of the arrangements are quite informal. Tenants won’t necessarily know their full rights so it can be hard to negotiate with landlords in that situation.
“This is not necessarily all landlords in that situation but there might be a lot of landlords there who are willing to pull the wool over their tenants eyes and try and get away with pocketing that £400 but then also raising the rent by an unaffordable amount.”
As well as calling on the government to impose a rent freeze to fight the cost-of-living crisis, Wilson Craw suggested arrangements could be made so a tenant who pays an all-inclusive rent has access to the energy account for their property to see how much their usage is.
He added: “It’s hard to know if you’ve got a good deal. Your landlord might be very fair, passing on only the increase in bills taking into account the £400, but it’s very hard to know as a tenant if your landlord’s doing that. Especially when rents go up it’s often a negotiation between the tenant and the landlord.
“Landlords are looking at what rent they could get if they re-let the property in the open market. In a lot of cases in a lot of parts of the country at the moment that’s potentially a big increase. But, at the same time, landlords might want to hang on to the tenants they have got. There’s a lot of different factors going into the negotiation.
“The fact that energy bills for these tenants are so opaque at a time when they are rising so fast just makes it really hard to know if you are getting a good deal. It needs a lot more transparency.”
The cost-of-living crisis will be discussed in more detail at the Utility Week Forum in November. For more information and to book your place click here.
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