Tenants’ energy bills now equal an extra month’s rent

Tenants’ energy bills now equal an extra month’s rent

0:01 AM, 15th April 2024, About 2 months ago 7

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For the first time since 2017, tenants in Britain are paying the equivalent of an extra month’s rent annually due to soaring energy bills.

The research from Hamptons also reveals that the average annual energy bill for a rental property now sits at £1,331, exceeding the average monthly rent of £1,330.

This financial squeeze is expected to ease slightly in the coming months with projected energy price drops.

However, the firm says that rising rents are likely to absorb these savings – and a future government might consider tighter EPC rules for rented homes again.

‘Tenants have found themselves squeezed financially’

Aneisha Beveridge, the head of research at Hamptons, said: “During the last two years, tenants have found themselves squeezed financially from all sides.

“While their ability to afford the rent is typically tested when they move into a new home, increases in rents have come alongside big hikes in energy and food bills.

“Even though increases in these costs are slowing and, in some cases, reversing as inflation nears its 2% target, living costs remain much higher than two years ago.”

She added: “When the number of rental homes on the market is up 30% on last year and the number of potential tenants is down by a fifth, rents would normally be falling.

“But these year-on-year comparisons mask the longer-term picture, where supply is down, and demand is up.”

Rents to rise by 64% by 2025

Experts predict energy bills will fall by 17.4% over the next year, but rents are forecast to rise by 64% by 2025 – nearly three times faster.

While the pace of rental growth has slowed, rents remain significantly higher than pre-pandemic levels, especially outside London.

The West Midlands became the first region outside the South to see average rents surpass £1,000 per month.

Hamptons also says that while falling energy prices might take some pressure off the political agenda – energy efficiency in rental properties might return with a potential change in government.

Ms Beveridge said: “In the short term at least, falling energy prices are likely to see the issue drop down the political agenda.

“Therefore, minimum EPC standards for rented homes look unlikely to be introduced by the current government.

“But with a potential change of government, in the medium-term, landlords


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Comments

Paddy O'Dawes

7:25 AM, 15th April 2024, About 2 months ago

Interesting, in September there was an article suggesting a 25% increase by 2026 so that's doubled plus in 6 months and with a reduced timescale. Using this trend rents will skyrocket 100% by the end of the year. Either way are there any LLs around that would see that level of rise as sustainable or even more encouragement to get out of the PRS based on almost guaranteed default by a huge swathe of current or future tenants.

Michael Booth

8:28 AM, 15th April 2024, About 2 months ago

Unsustainable business model plain and simple, will mean less property on the market offering inclusive tenancy agreements only one loser the tenants.

Cider Drinker

8:56 AM, 15th April 2024, About 2 months ago

You shouldn’t measure things using rent as a currency.

Since 2020 the price of my electricity (per kWh) has increased by 86%.

LHA has increased by less than 11% over the same timeframe and I have increased rents by between 0% and 15%.

If energy costs have risen to the equivalent of one month’s rent then maybe we should double the rents. This would make energy costs just 2 weeks’ rent. A win-win?

GlanACC

11:13 AM, 15th April 2024, About 2 months ago

You can make statistics say anything you want

Karen

11:31 AM, 15th April 2024, About 2 months ago

A lot of the increase is due to net zero which most of the younger generation seem to support?

Paul

11:44 AM, 15th April 2024, About 2 months ago

Yep, mine has gone up too.... Not just tenants, home owners too...

howdidigethere

12:43 PM, 15th April 2024, About 2 months ago

Typical blame shifting for .gov robbing of the people through money printing and using the symptom as the cause.

If there was no money printing, prices would be sustainable. Commodities are the things that mostly increase from money printing. Simple, just look at the gold price in the last few weeks.

But it's more popular to say that landlords are evil because the poor tenants are paying too much for their bills.

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