Prepare for the energy bill hikes
The energy price crisis is far from over and is going to hit us all, so how can we prepare?
Bills are set to rise again in October 2022 and January 2023 against the backdrop of the cost-of-living-crisis, our bank balances are really feeling the sting.
However, by doing these seven steps, you may be able to save some money, avoid a few headaches, and perhaps contribute a little bit to save the environment.
Where did we come from?
Before we discuss how you may be equipped and safeguard yourself, let's first examine what caused this crisis:
The government places annual caps on the amount energy providers can charge in order to keep energy costs manageable.
The cap was raised in October 2021, then again in January 2022, and is expected to rise again at least once more as a result of the wholesale gas price explosion, which forced suppliers to pass some of the cost on to consumers. This resulted in "fuel poverty" for thousands of people.
Because Russian supply lines to Europe were hampered by Russia's war in Ukraine, prices increased even more.
The UK government, some suppliers, and charities provide assistance to people who are most in need.
The energy price problem may not be resolved for three years, according to analysts. Here are seven suggestions to help you survive the crisis.
1) Tend for your tenants.
Take this stance toward your tenants since, if you're reading this, you're probably already very proactive. Ask them if they are familiar with how to compare and switch tariffs and assist them in finding information on ways to increase energy efficiency in rental housing.
Even though your tenant may have already done some research, there is nothing to stop you from saying a kind remark. They'll see that you've given their problem some attention, which is sure to improve your relationship and promote open communication.
2) Should I or shouldn't I not include?
All Inclusive landlords, It would be wise to ask at this point if including the bills makes sense.
It can be less headache all around if all expenses are included in the rent when renting out an HMO or student housing. This cannot be changed by higher energy costs; however, careful planning is essential.
It is likely that you will have to increase the rent. Although no tenant enjoys their rent increasing, they could be relieved to have a set payment to make to you during this uncertain period.
Another choice is to come to an arrangement where each resident pays you a portion of the utility costs. This offers some flexibility and avoids the problem of paying either little or too much.
It's probably not a good idea to transition to all-inclusive renting if you now rent your property(ies) with bills excluded unless your tenant profile is shifting. Families, single adults, and professional couples prefer having the freedom to select their supplier and price, and this won't change anytime soon.
3) Calm down
If you think that increases in energy prices are significant, wait till you see some of the tariff exit costs, which in some cases have increased tenfold since this time last year. When you agree to a tariff, you also agree to abide with it for a predetermined period of time. If you depart early, you very likely will be charged an exit fee.
Nothing is more heartbreaking than concluding that you have saved money with a new arrangement just to find out that you were duped while trying to leave the previous one. Complete your homework and read the fine print twice.
4) Keep away from the void
When your property is vacant, get your metre key out and give a reading as soon as the tenant goes out, and then on a regular basis after that, until just before a new tenant moves in. This is because as the landlord, you are obviously responsible for all costs during a so-called void period.
You might wonder why I'm being so careful. The energy provider won't be aware that the house is empty and will charge you what it would normally cost to keep it inhabited. Additionally, timely readings ensure that everyone—old renter, you, and new tenant—pays for just the services they really utilise.
Naturally, you should also take steps to minimise void times.
5) Guarantee your rent.
Higher energy costs translate into tenants who are more struggling, which increases the likelihood that rent may be late—unless your tenant happens to be an oil mogul. More tenants will be regarded (based on affordability assessments) to need a guarantor as a result of the rising cost of living.
Rent Guarantee Insurance is a smart decision to make in addition to a guarantor. It can cover your rent payments while you and the tenant seek to find a temporary cash flow solution.
6) Invest on efficiency
If you have been putting off installing insulation and double glazing, now is the time to act because energy efficiency standards are expected to rise in the coming years. Even if nothing else, it will assist your tenants stay on top of their bills during this period of price increases and save you money during the voids between tenants.
If you are changing any appliances, choose models with high energy ratings. If any of your current appliances have a poor rating, it may be time to replace them before scheduling your next EPC.
Consider whether now is the right moment to invest in a heat pump as one of several cost-effective, environmentally friendly enhancements.
7) Take care of yourself
Don't forget to take the necessary steps at home to reduce your stress and personal expenses. You may avoid overstretching yourself by creating and adhering to a budget for your home or properties.
Don't forget that there are grants and advice available for homeowners, so take use of whatever you can.