8th
Mar 2022
Russia’s war on Ukraine is most definitely going to drastically increase all fuel prices this year with annual household bills setting to top £3,000 by the end of this year.
All households will suffer from extreme living costs rises with tenants seen as being the most at risk from the rapid energy prices’ increases, as well as the commonly held view that PRS properties are less energy efficient than privately owned homes.
It is more than likely that the majority of PRS tenants will be on lower wage incomes than those buying their own homes.
In April there will be a 54 per cent increase in the energy price cap, however there is a further expected increase from the second review of the price cap in October, which will be impacted by the Ukraine invasion.
Energy UK’s chief executive of the energy industry body Emma Pinchbeck, says: "It's a really worrying time for both customers and industry.
"We've been saying since the autumn that we'd expect bills to go up again in October. With what we're seeing in Ukraine and in the oil and gas markets, we're now expecting those to go up further."
She warns that if oil prices remain at the over excessive prices then "you can expect bills to be anywhere between £2,500 and £3,000 in October depending on the tariffs people have and what happens in the market”.
It is almost a ‘given’ that average annual household energy bills will increase to £2,000 from April.
Pinchbeck says: "We have been saying for a long time this is an enduring crisis on the gas price and now that's being exacerbated by what's happening in Ukraine."
Russia has become the second largest exporter of crude oil and worse still is the Number One world exporter of natural gas.
Over the last few months an industry organisation has been repeatedly criticising the government’s attempts at improving energy efficiency in the PRS, as research held in December by a mortgage lender claimed that 52 per cent of landlords were considering selling up as upgrading properties are too expensive and in some cases properties are unable to achieve the necessary EPC requirements.
Government regulation in England and Wales requires BTL properties to have at least an EPC E rating, but by 2025 all new tenancies must have a C rating in the rented homes , whilst ongoing tenancies’ properties must achieve the same rating by 2028.
At the end of last year an association’s spokesperson demanded the government to take stock of the real situation that the majority of households will be made ‘fuel poor’ and to set more “realistic” and attainable targets, otherwise expect a fall in BTL properties availability.
He said: “As domestic energy use accounts for 14 per cent of overall UK emissions and 90 per cent of homes in England currently use fossil fuels – improving the energy efficiency of the nation’s housing stock is one of the most significant challenges in reaching net zero emissions”.
“The private rented sector has its part to play, but in recent years, landlords have faced considerable legislative change, and during a time of financial strain due to the Covid-19 pandemic, which will continue to have lasting effects, the costs of bringing housing stock up to EPC Band C will be a significant challenge for many.
“If the alarming number of landlords who have considered selling up within The Mortgage Works report go on to do so, it will have a detrimental effect on not only the UK government’s ambitions to reach Net Zero, but also for the thousands of renters looking to be housed as stock levels deplete.”
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