Government will bring in a law to force landlords to split £400 energy rebate

Reply to the comment left by The Forever Tenant at 14/10/2022 - 14:52
So, who pays for the massive increase in costs of utilities? Why should it be the Landlord who's not actually using it?

Reply to the comment left by Dennis Leverett at 14/10/2022 - 16:23
Well, the tenant does.

You would have to assume that any increase would be added into the inclusive rent accordingly, so it should be the case that any rebate should go back to the tenant.

Reply to the comment left by The Forever Tenant at 14/10/2022 - 18:10Not if you can't raise the rent.
In our HMOs we have put the rent up a little, but we cant keep doing so, and the rebate doesn't come close to covering the costs of utility price rises (alongside insurance, materials, tradesmen etc prices- plus mortgage interest rises which have been discussed elsewhere on the forum.).
Landlords cannot keep absorbing the full financial hit of the cost-of-living increases, as seems to be the expectation by government and in the press.
To me it is a nonsense for this rebate to go to tenants.

Reply to the comment left by The Forever Tenant at 14/10/2022 - 18:10
Your assumption is wrong. There have been massive increases in utility costs this year. Where there is an all inclusive rent in an HMO, a proportion of the rent contributes to the cost of the bills. In the past, landlords have been able to fix the utility rates for a period, so based on past usage it has been possible to work out the share for each room. Since earlier this year very few suppliers have offered fixed rates and have charged up to the max. The landlord, who pays the bills, have no choice but to pay the amount. It is almost impossible to switch to a better price. Only an annual increase in the rent is permitted, so the landlord is often paying out more than planned with usage out of his/her control. Therefore most tenants in HMO's are paying less than they should be and seem to be oblivious to the massive increase in costs that the landlord is paying. Hence there has to be a big increase in rent at the review, just for the landlord to survive.

Although I don't like it, I can see the logic. As landlords we are considered businesses, so the rebate is not intended for us.
Passing the rebate to the tenant in our case sounds like a cross between it being logistically difficult to implement a software update to cancel the rebate for landlords, and a tacit recognition that the money is,actually intended to buy votes.
So will we get the business rebate. Oh, what a shame, us landlords are "investors", not businessmen, so don't hold your breath!

Reply to the comment left by John Frith at 14/10/2022 - 21:46
If we were all businesses, we could claim business finance against tax. We're not, and we can't!

Reply to the comment left by The Forever Tenant at 14/10/2022 - 14:52
If however one assumes for the sake of argument that the of the £400 monthly rent the tenant paid £40 was to cover gas and electricity but that gas and electricity now costs £80 and the tenant is still paying £400 rent why should he get any rebate?

You could look at it that the tenant is now paying £80 towards the utilities, and that the remaining £320 is what you are receiving to cover everything else.

It's a common situation amongst businesses in every other sector that the ratio of particular costs to that business will change over time. Where you may pay a small percentage one year, you may pay a higher percentage the next year.

Reply to the comment left by The Forever Tenant at 15/10/2022 - 14:19Not sure I follow your logic.
Everything else has gone up as well, maintenance, council tax, water, everything.
If the tenant is now contributing £80 towards gas and electric where does the £40 cut in expenses elsewhere come in?

When trying to be fair and dealing with the ratio of the split there are several other factors to take into account.
1. Who pays for the gas and or electric and what is the cost split. As it seems all energy rebates are applied solely to the electricity element.
2. How long does the tenant reside at the property as the rebate could be designed to cover a two year period but all paid now upfront. Should the rebate be paid to the tenant at the end of their tenancy or at the end of the two year period?
3. If there are 5 letting units and communal space heating surely the tenant only obtains 1/6th of the rebate?
4. Should the rebate be split on a ratio of the tenants own accommodation compared with the total accommodation in the building. (figures that may be shown in the EPC)