Government will bring in a law to force landlords to split £400 energy rebate

Government will bring in a law to force landlords to split £400 energy rebate

8:01 AM, 14th October 2022, About A year ago 38

Text Size

The government has updated its guidance on how the Energy Bills Support Scheme will hand £400 to tenants who have an all-inclusive rent agreement.

They also reveal that legislation will be brought forward to make landlords pass on the energy bill savings.

The Energy Price Guarantee started on 1 October to help reduce the unit cost of gas and electricity so a typical household will pay, on average, around £2,500 on their energy bill a year – for the next two years.

However, the savings per property will be based on usage and the average household will save around £1,000 per year.

When the scheme was announced, various charities and housing organisations, including Shelter, demanded that the government make landlords hand over the money to their tenants.

Actual savings and bills could be lower or higher

The government makes clear that the actual savings and bills could be lower or higher depending on usage, as well as the size of the home, how it is insulated, how much energy is being used and how many people are living there.

The scheme sees £400 being paid in six monthly instalments directly to the energy supplier.

In addition, the most vulnerable households will receive £1,200 of support if they receive certain benefits.

Now, the new guidance makes clear how the £400 discount will be applied for those without direct domestic electricity connection and those living in park homes.

Tenants who pay for their energy as part of their rent

This is what the updated guidance says about tenants who pay for their energy as part of their rent:

Your landlord will benefit from the Energy Price Guarantee if they have a domestic electricity and/or gas contract with a licensed electricity and/or gas supplier and should reflect this in the price they charge you from 1 October.

Similarly, they will receive the Energy Bills Support Scheme and should pass it on to you. We will act now to introduce legislation to ensure this happens.

Your landlord should pass on the discount irrespective of how you pay for your energy use.

If they charge you based on your usage, they must do this at the same price as they pay, including the Energy Price Guarantee (see Ofgem’s guidance on ensuring customers are being charged no more than they should).

If, on the other hand, you pay an ‘all-inclusive’ rent incorporating a fixed charge for energy use, your landlord should pass the Energy Price Guarantee and Energy Bills Support Scheme benefits to you if provided for in your tenancy agreement.

If your landlord has a non-domestic contract, they will benefit from the Energy Bill Relief Scheme and should pass the savings on to you.

In addition to making the rules for landlords and letting agents clearer, there was some confusion when the scheme was unveiled as to whether the government would bring in legislation to enforce the rules – and now the updated guidance makes clear that a law will be introduced to compel landlords with all-inclusive tenancies to pass on the scheme’s savings.


Share This Article


Comments

Luke P

9:41 AM, 14th October 2022, About A year ago

So is the money for covering electricity/utilities or just to general ease any cost-of-living burden...?

Alistair Cooper

10:14 AM, 14th October 2022, About A year ago

No problem at all ; we’ll just increase the rent by more than the rebate in the 1st place taking into account Gas has risen in excess of 450% and electricity by some 270% even with the new ‘capped’ rates ; then gladly give our HMO tenants back £11 a month for 6 months! The admin cost will outweigh the refund
What ‘benefit’ has the all inclusive landlord really had ?

Graham Turrell, Landlord & Entrepreneur

10:40 AM, 14th October 2022, About A year ago

I'm now immune to the absurdities of this Government's stoked-up political, opportunistic and blinkered red mist against landlord survival. If they legislated that the landlord is required to dance around naked in the property's back garden on Hallowee'n for the tenants' entertainment and ridicule, I'd just add it to the to-do list.

NewYorkie

10:40 AM, 14th October 2022, About A year ago

Let me get this right. The tenant pays rent based on the previously lower cost energy and can therefore use as much energy as they want, because they don't need to worry about the increases. The landlord is now paying for that energy use based on the massive increases, and was hoping for a little help from the government, but must now hand the rebate to the tenant who does not deserve it.

Carol

10:55 AM, 14th October 2022, About A year ago

Reply to the comment left by NewYorkie at 14/10/2022 - 10:40
Fully agree with your sentiment. We are not allowed to increase rent in HMO's with all inclusive bills, have to pay higher costs and now have to give a rebate. The insanity is never ending.

Harlequin

10:59 AM, 14th October 2022, About A year ago

Reply to the comment left by Carol at 14/10/2022 - 10:55
Really? how did I miss this, I think things change so thick and fast I need to just pack up and leave this business. I had an inspection for my HMO yesterday, his concentration was on keyholes - I've removed key locks and replaced with thumb locks, no key and mechanism disabled but I have to cover the keyhole - it is part of the door handle. Likewise front door - key hole still showing and must be covered 'incase someone tried to lock themselves in' - with no key and no mechanism, hardly. Also have to supply 4 double sockets in each bedroom - really? but then I always knew that I had to provide for and treat my tenants better than my children.

Harlequin

11:00 AM, 14th October 2022, About A year ago

Reply to the comment left by NewYorkie at 14/10/2022 - 10:40
Surely the rebate goes to pay the bill - not physically handed back to the tenant - who hasn't paid gas or electricity?

reader

11:28 AM, 14th October 2022, About A year ago

The above sentiments seem to reflect the uncertainty of the situation, once the regulations have clarified the position no doubt how fair things really are will be apparent.

If we are to act fairly one must remember that fairness means being fair to both sides. So all those tenants that are paying based on historic costs might like to pay based on present costs or even the amount of the extortionate direct debts the energy companies charge.

Fearing something like this and the huge costs of inclusive services I changed all my ASTs to separate rent from utility costs, the latter being charged by way of a utility charge that is reviewed twice a year on 1st April and 1st October. but is paid at the same time as the rent per week or month. And I updated electricity metering to new electronic meters that are charged at the contemporary rate.

Martin Thomas

11:37 AM, 14th October 2022, About A year ago

I despair of this government but more so, the idiot civil servants that seemingly don't have the wit or intelligence to come with any advice on policy that is sensible and workable.

So my understanding of this is as follows; if a landlord put up the all-inclusive rent on 1 April 2022 to cover the hike in energy costs, he then can't put it up again in October to cover the further increase in energy costs.
The tenant's rent is based on the energy costs existing from April to the end of September but even though the energy costs have increased by an additional 25% from 1 October and the landlord can't recover those costs from the tenant, the government says that the £400 rebate should go to the tenant.
That is totally unjust and yet another example of ministers and civil servants listening to the bleatings from Generation Rent and Shelter and not considering what happens in the real world.
It is so clear that if the landlord can show that his costs have increased by at least £400 and not been covered by an increase in rent, then the £400 rebate should be given to the bill payer, ie the landlord.

Luke P

12:00 PM, 14th October 2022, About A year ago

We live in an age of 'simply' *willing* your ideals into existence. Even if they won't work/have been proven not to work, you just have to *believe* a little bit harder and it'll all work out... 😒

1 2 3 4

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now