Tag Archives: Energy Prices

21Jan 2013

The Green Deal: How Will It Affect Rental Properties?

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By Craig Smith

From 28th January 2013 the Green Deal will be coming into force as part of the Energy Act 2011. The idea is that households can have a grant from the Government to install more energy efficient improvements which will then be paid back as part of their utility bills.

Homeowners

The basic way that the deal will work is for a homeowner to have their property surveyed to see if they could benefit from the grant. The grant would only be given if the savings that could be made would outweigh the installation costs as there would be no point otherwise! Some of the more well known improvements include loft insulation or installing a more energy efficient boiler.

Once the improvements have been carried out, the homeowner would pay back the grant over a set period of time as part of their energy bills but this would not come to any more than their regular bill payments. This way, in theory, they start to enjoy the savings almost straight away.

Clearly, the longer you live at the house the more savings you should make. Even if you did need to sell up or move quicker than expected, the grant repayments would stay with the property itself rather than the owner so the new occupier would pick up the bill but also enjoy the savings!

Landlords and Tenants

Having this done in your own home looks like a great way to save money, particularly if you don’t plan on moving any time soon. But when it comes to rental properties, it gets a little more complicated.

A tenant could still save money and help the environment which can only be a good thing. However, tenants may not be so keen to take part in the scheme if they aren’t planning on staying put for very long. A lot of tenants, for example, only rent because they need to move around for work and may need to move on again in a few months time. Don’t forget that in the majority of lets it is the tenant who pays for the utilities, thus covering the extra bill and saving very little in the short term.

Good or Bad News for Letting?

Some tenants may see this as them paying for improvements to someone else’s property. And whilst they may enjoy some savings when they are living there, they wont gain anything when they vacate.

However, what sounds like a disadvantage for some Landlords could be beneficial to others, depending on the tenants in the property. Longer term tenants may want to benefit from the savings and could also improve the Landlords property at the same time. Perhaps a longer term tenancy agreement could be agreed for some tenants who would be willing to take up the grant? This would ensure that the tenant benefits from the potential savings and also gives both the Landlord and the tenant security of having the home let for a longer period.

Stricter Rules in the Coming Years

This deal comes in at just the right time as from April 2018, it looks set that no property with an EPC rating of a band E or lower could be legally let. (The aim is to not just save money but to reduce the impact on the environment from energy usage.) This could be bad news for Landlords of the more rural or older properties. We don’t yet know if the sales of such properties will be affected but with energy usage becoming bigger and bigger news, it does look as though it will have some impact. Would you want to buy a property knowing it would cost a fortune to run or not be able to let it out?

18Oct 2012

Landlords Lose Money to Greedy Utility Companies

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By Craig Smith

A little while ago, Steve from our office blogged about some of the issues he was having with a certain utility company, namelyUtility Warehouse. Well it seems they are still trying to overcharge for energy used in rental properties!

Incorrect MeterReadings

The usual process for our office when a tenant moves in or out of a home is to inform the relevant companies, in writing, of the correct readings and forwarding address. The property in question was no different where after a brief empty period, new tenants moved in and the emails sent off to the utility companies. We would normally expect to get any final bills within a few weeks, arrange for the payment to be made and everything can be forgotten about until next time.

Well, the bill came through with estimated readings! This basically means that the energy supplier hasn’t taken any notice whatsoever of the readings we have taken and made up their own readings. Surprise, surprise! They are usually always over-estimated and this case was no different, which meant that we need to send the correct readings over… again!

Lack of Contact

This all happened in August (2 months ago) and since then we have had no contact fromUtility Warehouseregarding this account. Until today. A letter arrives through our door from a debt collection agency chasing the outstanding amount of just over £20! (Now, you might think that arguing over such a small amount is silly but you should only pay for the energy you have used!)

Needless to say that due to the lack of contact and the usually less than helpful nature of some of the debt chasing staff, we have made contact & told them what we think of the service!

Not the Only One!

It may sound like I am singling out a single supplier here but the truth is that this seems to arise with numerous companies and some are worse than others. Which begs the question, how many people (not people, not just Landlords!) are out there that have been scared by these tactics and ended up paying more than they should have done?

Deemed Rates

Another big money-earner is the type of tariff the account is put onto. When you are living in a property it is easier to research cheaper rates for your energy bills but something that a lot of Landlords forget when a property is empty. This is particularly important if a property is left unoccupied for a longer period of time. We have had instances in the past where no energy has been used at all but standing charges still apply.

The Solution

Unfortunately, there doesn’t seem to be any way of making dealing with some of these companies any easier and sometimes you just have to grit your teeth and get on with it. By always informing any changes in writing, it gives a good backup should accounts not be updated as they should be. For now, we shall carry on…

21Sep 2012

Property Landlord advice: Insulation now available!

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By Steve Roulstone

A few weeks ago I wrote that Residential Insulation which is currently being promoted through the Governments Carbon Emission Reduction Traget CERT and the possibility of Landlords being able to claim for expenditure against annual costs, was very difficult to explain to current Landlords and Tenants when the Industry itself had no way of communicating its message.

VNR Contracting Services

I am pleased to confirm that I have now found a Company who is not only being proactive in speaking and working with other organisations, but that understood what we are trying to do, but is also happy to put leg work in themselves in achieving a result.

Landlord and Tenant Choices

What we need to know is that as Property Managers, we can rely upon a Company who specialise in the Insulation field to explain clearly the benefits of having Insulation fitted and the grants that are currently available for Landlord and Tenant alike, one through direct costs and one through the tax incentive currently being offered.

Action Plan

This means we will be able to write to our Tenants and Landlords alike with information relevant to them and then allow the Company to follow up with visits to answer questions and quote for the work direct ensuring that our Tenants and Landlords are able to take advantage of the schemes before winter this year, if they choose to get involved.

Service Provided

To us, this is part of what we should be doing as Property Managers on behalf of all of our clients, not for any other reason than from a central point we are in a position to receive information as Companies approach us and distribute the same to a wide audience. It is not for us to dictate what decisions are made or even recommend what options are pursued, rather to place the information in front of those who have the right to take advantage of the grants etc that become available.

Reliable Contractor

What is reassuring now is that having struggled to find a Contractor to work with, we have been approached by one who already works with local Councils and as such carries a pedigree that is re-assuring. I am happy to recommend VNR Contracting Services Ltd and in reality that is only the second recommendations we have made in over two years of writing!

05Apr 2011

Landlord Advice: Keeping on Top of Utility Bills

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By Craig Smith

A lot of Landlords may not realise that, even if a property is unoccupied, they could still be liable for utility bills at a rental property. Usually, unless a property has been let with bills included, the Tenant would be responsible for payments. But what happens during the periods that a property is empty?

Ensuring the Accounts are set up Correctly

During an empty period, the utility accounts need to be set up in the name of the Landlord. It is important to take meter readings at the start and end of a tenancy to ensure that Tenants and Landlords don’t pay for each others energy used. A lot of companies will automatically send an estimated bill so regular meter readings should help to keep costs down. Most utility companies will be happy to send billing to another address, such as the Landlords home or letting agent address, which helps to prevent any debt letters coming through the post.

Debt Chasing and Court Action

If a bill gets missed, the utility companies usually send reminders and letters threatening court action, regardless of whether or not they intend to take you to court. (See Steve Roulstone’s Blog here for more information.) The best action is to act quickly to resolve any issues, the majority of cases are where the companies haven’t taken note of meter readings or start/end dates of a tenancy.

Choose Your Suppliers Wisely!

Landlord cannot force a Tenant to take a particular supplier for gas & electricity, although there is usually no choice for water and Council Tax! However, different suppliers charge different amounts for energy used. If a property is going to be empty for a period of time, it is always worth looking into the prices charged by different suppliers. Some suppliers will charge a standing charge, so even if no energy is used at a property a daily charge could still be payable!

Whenever a Tenant leaves a property, the Landlord should always aim to obtain the gas and electricity providers. If the Tenants don’t give the information, the suppliers can be found by contacting National Grid for gas and MPAS for electricity.

Water Supply

Some water companies will also make a standing charge even if no water is used. This is to cover costs of drainage and maintenance to the pipe supply. If the stop cock is turned off in a property, inform the supplier! Usually, if the supplier has been informed that the stop cock is turned off then the standing charges are normally cancelled (from our experience with Severn Trent).

Council Tax

A property can have an exemption from council tax payments if it unoccupied & unfurnished, usually for up to 6 months in each financial year. After this, a 50% rate is applied and will become payable, although after 6 months you would certainly hope that the property has been relet!