Agents Beware - key points on new energy price controls for tenants

Propertymark has issued key points for lettings agents to note following the introduction of The Energy Prices Bill to the House of Commons.

This is the Bill that enshrines the support scheme to help households with fuel bills this winter.

The Energy Price Guarantee, or EPG, is the reduction of the unit cost of electricity and gas so that the typical household pays, on average, around £2,500 a year on their energy bill, for the next two years. It started taking effect on October 1 2022 and runs until  September 30 2024.

Some households will benefit from the Energy Bills Support Scheme, or EBSS, which has a £400 non-repayable discount to eligible households to help with their energy bills over this coming winter 2022 to 2023. It takes the form of a £66 discount in October and November, and then a £67 discount in December, January, February and March

Propertymark says the key points for agents are that if energy bills are paid for as part of the rent, there is an obligation on landlords to pass on the benefit to end users - that is, the tenants. 

The Energy Price Guarantee will automatically reduce the cost of electricity and gas for any domestic energy contract. Therefore, the landlord should not charge the tenant above the maximum resale price if they charge based on usage.

Other points are that the tenant may recover the amount specified from the landlord if not received by a specified time, or if the landlord is obliged to provide information to the tenant to understand and enforce the passing on of the benefits; or if the landlord may have to provide information to the government for monitoring, audit and keeping the passing on of these benefits under review.

If the landlord charges a fixed rate for bills within the rent (all inclusive) they should pass the EPG and EBSS benefits on to the tenant, if provided for in the tenancy agreement. 

The government's advice is that in these circumstances, landlords who resell energy to their tenants should pass the discounted payments on appropriately, in line with Ofgem rules to protect tenants. 

This means that the landlord should not charge more than the maximum resale price of energy to their tenants, that landlords are encouraged to come to an agreement with tenants on the discount in line with the arrangement in the tenancy agreement; and that the landlord’s fixed charge may already provide tenants with similar protection from the impact of the energy price increase.

The EPG discount rate will automatically be applied by the electricity supplier. Smart pre-payment meters will be credited automatically with the EBSS on the first week of each month from October to March, totalling £400. 

And Propertymark adds that tenants on traditional pre-payment meters will receive redeemable vouchers by text/email/post or an automatic credit when topping up. This is determined by the electricity supplier.