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Concerns About Energy Cost Rising for Landlords

Now that the political situation has calmed a little, we have a more clear picture of what we will be paying for electricity and gas. The consequences of the energy cost rising for landlords are two-fold. If a landlord pays the bills on their rental property it could seriously dent any profits from that property. Secondly, if tenants are on the breadline, growing bills could limit their ability to live comfortably and potentially pay their rent.

Now, building society Nationwide has calculated what the rise in energy prices will mean for properties with a range of different Energy Performance Certificate (EPC) ratings.

Energy Cost Rising Details

The latest rise in energy costs has been advertised as an increase in the advertised annual household bill to £2,500. However, some people have taken that to mean that no one will pay over that amount for their fuel. This is not the case.

The government has not capped the overall bill amount, it has capped the price per unit of energy used. In September, it cost 28.3p per kWh for electricity and 7.4p per kWh for gas. From October, that rose to 34p per kWh for electricity and 10.3p per kWh. If you are no longer on a fixed tariff, you will notice this price rise.

For those tenants who use an average amount of energy, their bill will likely be around the £2,500 mark per year. For those with very energy efficient properties, the bill will likely be lower. For those with less efficient properties, it could well be higher.

The lower the EPC rating, the more energy your tenants are likely to use to keep the property warm, as so much of the heat escapes from the building.

Energy Costs for Different EPC Ratings

Robert Gardner, chief economist at Nationwide, said of the energy cap that: “despite this intervention, energy costs are still going to be around 80 per cent higher than a year ago, even after taking account of the £400 energy support scheme discount.”

The company’s research shows that:

● The most efficient properties, rated A to C on their EPC, will hit £1,800 on average. This is up from around £1,000 last year.

● Properties with a D rating, which is most common in the UK, are likely to reach £2,600 per year

● Tenants in an E-rated property will pay £120 more than last winter

● The least efficient properties, rated F and G, could see their energy cost rising to an average of £4,500 for the year.

What Can Landlords Do?

There are some ways to make a rental property more efficient. Putting in insulation and fixing any gaps around windows and doors will help. Changing an old, inefficient boiler for a new efficient model and even exploring renewable energy sources are options. They require investment though, which might make them inaccessible for squeezed landlords.

There are some free ways to reduce energy use that landlords can pass on to tenants. These include turning lights off when leaving a room, turning the central heating down just a degree or two, using airers to dry clothes instead of tumble dryers and other such tactics.


Keeping your rental property maintained properly is one way to keep it running more efficiently with the energy cost rising. We provide property maintenance as part of our outsourced property management services. To take these tasks off your hands and keep your properties running well and tenants happy, call us today on 0208 5757630.


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