Landlords cut rents but no longer pay for gas

·2 min read
energy prices
energy prices

Landlords have ditched once-popular “bills included” contracts to shield themselves from further energy price rises – leaving tenants to shoulder soaring costs.

Energy bills have already doubled for millions of households this year. In April the energy price cap rose by £693 to £1,971 per year and a further 42pc increase is expected in October, when it will reach £2,800.

The surge has meant landlords have stopped covering bills in lieu of lower rents. The number of tenancies that do not include utility bills rose by 56pc between 2020 and 2022, according to rental platform Goodlord. Tom Mundy of the company said landlords were increasingly unwilling to take on the risk of rising bills.

Mr Mundy said: “Some landlords have faced hundreds of pounds extra in costs that they may not have allowed for when setting their all-inclusive rent.”

The majority of landlords do not include bills in their rent as it gives them little control over energy usage and can lead to conflict with tenants. Contracts which do include costs such as gas, electricity and council tax bills are most commonly found in shorter tenancies and houses in multiple occupation, although are not unheard of in the longer let market.

Jack Stone of agency Draker Lettings said: “Including bills in the rent isn’t the perfect scenario as there will usually be one party who feels they are getting a raw deal, be it the landlord who feels tenants are using more energy than they pay for or tenants who feel they are overcharged for their usage.”

Landlords who previously included bills in their contract had in recent months switched to a rent only basis when tenancies came up for renewal, said Mr Stone.

He added: “The energy bills have gone up so much it’s just not viable for them. They’d rather lower the rent and leave the bills up to the tenant.”

In May, Chancellor Rishi Sunak announced households would receive a £400 energy bills discount from October, which will not have to be repaid. In the private rented sector the rebate will go to the property owner, but not all landlords are planning on passing the discount on to tenants.