Many Private tenants face choice between heat, eat or paying the rent...... But how can landlords help?

The current headlines talk about a cost of living crisis and how many households are edging into fuel poverty, but what is fuel poverty and how many people are really effected.

What is fuel poverty

Until recently, the standard definition of fuel poverty was when a household needed to spend more than 10% of its income on fuel

However, in June 2013, the Department for Energy and Climate Change (DECC) published 'A framework for future action’ which set out the Government’s intention to adopt a new definition of fuel poverty for England.

This new definition states that a household is said to be in fuel poverty if:

·         They have required fuel costs that are above average (the national median level), and

·         Were they to spend that amount they would be left with a residual income below the official poverty line.

This also uses a fuel poverty gap - i.e. the difference between a household’s 'modelled' (average) bill and what their bill would need to be for them to no longer be fuel poor

What does it mean for landlords?

The only data currently available is from 2020 so I expect in reality, these figures are now much higher.

Households living in privately rented accommodation are most likely to be fuel poor (25.0%). Despite only 18.7% of all households privately renting their homes, 35.4% of all fuel poor households live in private rented accommodation.

This is a worrying time for landlords, with the rising cost of energy and tenants unable to afford to pay utility bills, they will have to start making decisions on what they pay their money towards.

Is rent gong to suffer?

It is predicted that come the winter more and more tenants will priorities heating over housing with many either paying only partial rent or skipping payments, in an attempt to rob peter to pay paul and keep their homes warm and their food hot.

What can landlords do?

The knee jerk answer to that would be, improve the energy efficiency of your rental stock, but we all know this isn’t always financially possible for landlords and can be extremely disruptive for a tenant.

Tenant may not be aware of the financial support that is available to them and as a landlord prevention is better (cheaper) than cure, so it may be worth arming yourself with the knowledge that could help your tenants pay their utility bills, which in turn will mean they wont have to skim off the rent.

Many utility providers have their own grant scheme that will pay off the customer’s debtor or pay a good % towards the debt.  You can normally find more details on the supplier’s website.

Tenants could also be eligible for Warm Homes discount scheme

Let’s take a closer look at the different utilities:

Gas and electric arrears

If tenants don’t pay your gas or electric bills, their supplier can apply to Court to get a warrant to enter their home to fit a pre-payment meter. 

Many gas and electricity companies have their own customer support schemes that can pay a grant towards arrears or write off the debt in some cases.  For example:

·         British Gas Energy Trust

·         E.ON Energy Fund

·         OVO Energy Fund

·         npower Energy Fund

·         Scottish Power Hardship Fund

·         EDF Energy Customer Support Fund

·         Bulb Energy Fund

 

But it isn’t just Gas and electricity that tenants could be struggling with

Water arrears

If a tenant falls behind with their water payments, the water supplier can’t disconnect them

However, they can start court action to get debtors to pay the arrears back, and in some cases apply to deduct money straight from benefits payments through a scheme called Waterdirect.

Water companies also have a range of support funds for those who are struggling to pay

·         WaterSure

·         Anglian water assistance fund

·         Severn Trent water charitable trust fund

·         South East waters helping hand

·         Thames water trust fund

·         United Utilities

·         Yorkshire Water

In addition, most water companies have payment support schemes, such as social tariffs (special rates for people on low income or receiving specific benefits).

·         Affinity water – LIFT

·         Anglian water – LITE

·         Essex & Suffolk water – SupportPlus

·         Thames water -WaterHelp

To name but a few………….

 

It is always worth contacting the utility supplier direct to ask what funds they have available.

In addition, if the tenant is vulnerable they can also ask to be added to the Priority Services Register.

This is a free service provided by suppliers and network operators. Each energy supplier and network operator maintains its own register. To get on it, you need to contact the energy supplier

There are also Government schemes that could help

•             Winter Fuel Payment – An annual one-off payment to help pay for heating during the winter

·                 Local authority funds

Ø  Discretionary Housing payment (DHP) (£140m)

Ø  Household Support Fund (£500m)

Ø  Homelessness Prevention Grant (£310m)

Ø  Flexible Homelessness Support Grant (£200m)

Ø  Council Tax Rebate (£432m)

Ø  Discretionary Fund (£144m)

Ø  Prevention of Homelessness funds

Ø  Financial inclusion grants

Can all be used to help pay towards both energy bills and rent arrears.

•             Cold Weather Payments – These are one-off payments to help pay for extra heating costs when it’s very cold.

•             Warm Home Discount Scheme – £140 off the electricity bill under the Warm Home Discount Scheme if you’re either:

o   getting the guarantee credit part of Pension Credit

o   or on a low income

All of which are worth trying.  If your tenant can deal with the utility bills, that is one less worry for the them – and will release extra money for paying rent