Shelter warns over landlords keeping a tenant’s £400 energy payment

Shelter warns over landlords keeping a tenant’s £400 energy payment

10:52 AM, 4th August 2022, About A week ago 12

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The housing charity Shelter is warning that the government’s £400 energy rebate may see tenants missing out if their rent includes energy bills because the cash will be paid to the landlord.

They say that tenants are at the ‘mercy of the landlord’ on whether they receive the financial support.

Shelter’s chief executive, Polly Neate, said: “Tenants whose energy bills are included in their rent or service charge cannot directly claim the energy discount.

“Instead, they will be at the mercy of their landlord passing on this much-needed support.”

‘No specific legal obligation for landlords to pass on this support’

She added: “There’s no specific legal obligation for landlords to pass on this support but they aren’t allowed to overcharge tenants for the energy they’ve used or make a profit on it.

“This could be the case if they pocket the government support and continue to charge the same rate for utilities. Landlords can only charge for energy used, the standing charge and VAT.”

Ms Neate continued: “It is unfair that those at the very sharp end of this crisis could miss out on this much-needed support.

“The government is looking into this as they’ve acknowledged it’s not right.

“We urge them to make sure this support goes straight to the people who need it the most, not their landlords.”

Citizens Advice is also warning that some landlords whose rents are inclusive of bills may keep the discount, rather than pass the savings onto tenants.

They said: “With predictions that high prices are set to be a feature of the energy market at least until well into next year, this creates fresh urgency to future-proof protections for renters, including ensuring they can control their energy supply, and aren’t subject to practices which exclude them from the market such as sub-metering.

13% of tenants have their energy bills included in their rent

It’s estimated that around 13% of tenants, that’s around 585,000 households, currently have their energy bills included in their rent.

The government says it expects the discount to be passed on by landlords.

The National Residential Landlords’ Association (NRLA) also say that the discount should be passed on by landlords where tenants incur the cost of increasing energy bills.

However, the NRLA spokesperson pointed out that there will be cases where an all-inclusive rent has been set that will not reflect the recent rise in energy costs.

The spokesperson said: “In most cases, tenants pay their energy bills separately from their rent. As such, they will receive the Government’s support payments directly.

“Where rents include the cost of utilities, and tenants incur the cost of increased energy bills, the savings from the support scheme should be passed on to them.

They added: “The government needs to ensure that its scheme recognises such cases where it is the landlord who is ultimately paying the cost of increased bills, rather than the tenant.”

Package of measures announced by the government

The £400 discount on energy bills is part of a package of measures announced by the government to help households tackle the rising cost-of-living, particularly their energy bills.

This week they published details of how the money would be paid and for tenants who have their energy bills included in their rent, the discount will be paid to their landlord because they are the bill payer.

However, the Government has said it still expects landlords to pass on the discount.

A spokesman said: “In these circumstances, landlords who resell energy to their tenants should pass the discounted payments on appropriately, in line with Ofgem rules to protect tenants.”

For landlords and tenants who would like more information about getting help if they cannot afford to pay their energy bills, Ofgem has published a useful page of advice.



Comments

Chris Bradley View Profile

12:41 PM, 4th August 2022, About A week ago

Surely if the landlord is recieving a fixed rent amount which includes energy, then it's the landlord that will be having to pay the extra energy costs, so the landlord is the one that needs the energy payment.

It's not like it is a monthly payment, it is a one off payment and will only offset a little of the energy charge increases, the landlord will be expected to cover the rest.

Unless tenants want to manage and pay for their own energy bills.

When my student daughter comes home she has no thought for how long she stays in the shower, because her bills are included in her rent. At home when she showers it costs 45p, mine costs 8p, so landlords who include energy in their rent are taking a huge risk these days

Mike

14:05 PM, 4th August 2022, About A week ago

Indeed Shelter is completely wrong, prior to April whatever the rents were they were based on energy bills before April 2022, so when the energy bills went up, landlords were the ones who suffered the brunt of extra cost of energy, so unless Landlords raised rents to cover this extra cost, only then they may be entitled to some rebate in their rents, but I would still hold back that rebate as energy prices are going to go up more from October by another 75% as predicted by experts, so yes I would pocket that rebate and not pass it on to tenants as Landlords cannot increase rent more than once per year.

Ian Narbeth View Profile

14:06 PM, 4th August 2022, About A week ago

Shelter and the Press are conflating two issues. Where "energy bills are included in [the tenant's] rent or service charge " then the landlord bears the increased cost and it is only fair that the landlord keeps the £400. Polly Neate is in effect saying: "Landlords, if your costs go up by, say, £1000 this year you should give the £400 to the tenant so your increased cost is £1000 not £600. Why? Because you are all bastards and the Government should not do anything to help you!"
Where there is a legitimate complaint is if the Landlord is the bill payer but recharges to the tenant the full cost of utilities so that the landlord does not himself pay them. In that situation it would be fair and proper for the rebate to be passed to the person actually paying the bills. Shelter do not draw this distinction and simply demand all landlords take a hit.

Yvonne Francis

14:29 PM, 4th August 2022, About A week ago

But it's not a 'tenant's £400 energy payment'. It's a bill payers energy payment. It's just the sort of nonsense and criticism of landlords Shelter likes to indulge in.

Dennis Leverett

15:09 PM, 4th August 2022, About A week ago

Reply to the comment left by Yvonne Francis at 04/08/2022 - 14:29
Yet another b****y stupid not thought through comment from Shelter. If the Landlord pays the energy its his entitlement if tenant pays its the tenants. How more simple can it get. Honestly !!!!!

Mike

17:02 PM, 4th August 2022, About A week ago

Yes I warned my tenants that I need to put their rents up by £50 each , they declined and agreed to pay only half that, but actually the additional burden was £50 per tenant, per month, from £425 to £475, so I am still short changed, so if I get if I am lucky, I will indeed pocket that money, and to hell with Shelter.
My energy bill went up from £90 per month to £262 per month, that is more than 54%, actual 188% up. So even £400 wont cover additional cost I have to cover up, One tenant decieded not to pay additional £25 increase so he has left, but I can now get a new tenant and charge him the going rate for a room of £500pcm.

Pamthomp33

17:53 PM, 4th August 2022, About A week ago

Our energy bill has gone up by £120 per month, therefore an annual rise of £1,440 even before October and January's rises. If my home was an HMO, I would still have to increase rents even with the £400 rebate but of course the rise would be less than it would have been without it. As per usual, the landlord is perceived as being greedy when in fact, some landlords could be losing significantly due to tenancy terms not allowing them to increase rents more than once annually.

Blodwyn

22:31 PM, 4th August 2022, About A week ago

Our tenant pays her own electricity by a pay as you go method that she p[ays for. As I have no liability for her electricity, it seems to me the Government's payment belongs to her - or have I screwed that up?

Grumpy Old Git

10:54 AM, 5th August 2022, About A week ago

I asked Warrington Borough Council about this in respect of two HMOs where tenants pay weekly rent all bills included and their (edited) reply follows:

"Unfortunately ... there is no eligibility to the payment for the two ... addresses listed below and the Council has no discretion on this part of the scheme. The advice from DHLUC can be found at the following link:
https://www.gov.uk/guidance/council-tax-rebate-factsheet
The relevant part of the factsheet states the following:
11. I live in a House of Multiple Occupation (HMO) and my landlord is liable for council tax. Will I still be eligible for the rebate?
Where the owner of a property is liable for the council tax (for example in a House in Multiple Occupation or residential care home), no-one will be eligible for the rebate in relation to that property. If you are not the liable council tax payer but are impacted by rising energy costs, you may be able to access support from your council’s discretionary fund."

To which my response was:
"Can’t say I am surprised given all the ‘landlord bashing’ that goes on nationally. We try to look after our tenants (as do the vast majority of landlords) and it’s unfortunate there is not more recognition of this nationally, in the media and some of the more ‘aggressive’ local authorities. Tenants are on the end of the line so it’s always them that will end up paying for the errors of those who claim to be protecting their interests!"
Rents are being increased sooner/more than would otherwise be the case!

DSR

11:53 AM, 5th August 2022, About A week ago

Reply to the comment left by Blodwyn at 04/08/2022 - 22:31
as it should be. the person who PAYS the bill gets the discount.

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