Tenants pay twice for landlords' failure to reduce energy bills

17 July 2008 / by Daniela Gieseler
Tenants are more likely to suffer from energy price rises than homeowners as the cost of gas and electricity continues to rise, new research from MoneyExpert.com reveals.

The financial comparison website found that people in rented accommodation spend 13 per cent of their weekly disposable income on gas and electricity while homeowners spend just about five per cent.

As energy bills are said to increase by as much as 40 per cent this year the average household might face bills of up to £400 more a year in energy costs.

Although the MoneyExpert.com Switching Index shows that more than three million households are aware that they can save hundreds of pounds by changing their gas and electricity supplier and switch every six months, MoneyExpert.com believes that those in rented accommodation are less likely to do so than homeowners.

Tenants are particularly vulnerable to increased fuel bills, because many have to leave the decision of switching suppliers to their landlord, who might not be willing to switch in order to cut costs.

Sean Gardner, director of MoneyExpert.com, commented: "Theoretically suppliers do not differentiate between renters and homeowners so it must come down to the fact that tenants just don't think about changing supplier because that responsibility lies with their landlord."

He recommended: "If you're paying more than you should you have every right to ask your landlord to look at switching - it needn't take long and if you can save money it's well worth it."

While many landlords might not be aware of their tenants' energy plights, more than half are completely oblivious of the new energy efficient requirements for rental property which will come into effect in October, research from specialist mortgage lender Paragon found.

Fifty five per cent of landlords do not know the legal requirements for the Energy Performance Certificates (EPCs) they will they have to issue tenants. Failure to comply might result in a fine of £200 and keep landlords from marketing the property.

Paragon also observed a general lack of awareness about the Landlord Energy Saving Allowance (LESA), through which landlords are able to claim up to £1,500 on their tax return against the cost of fitting the property with energy saving items.

John Heron, Paragon Mortgages' managing director, warned: "Making sure you have an EPC in place early will reduce the threat of void periods, as well as avoiding the possibility of an expensive fine. The Government has targeted domestic energy use as a way of reducing carbon emissions and landlords have to play their part."

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