HMO bills

HMO owners must pass on £400 energy savings rebate to tenants

Landlords whose tenants pay rent with bills included, which often includes HMO properties, are being urged to pass on the Energy Bills Support Scheme (EBSS) discount to their tenants.

Earlier this year it was announced that all households with a domestic electricity connection in England, Scotland and Wales would be eligible for a £400 energy bill rebate. This is being paid in instalments over the course of the winter to help people pay their energy bills.

While the rebate may be relatively straightforward for homeowners, it is slightly more nuanced in the private rented sector. HMO properties (houses in multiple occupation) in particular have been singled out by business secretary Grant Shapps, who has reiterated the message from September that HMO landlords must pass savings on.

This is because tenants living in HMOs often pay a monthly lump sum for their rent and bills. Due to the fact that HMOs are made up of different households, often with separate tenancies, having a ‘bills included’ contract can make things more straightforward.

Bills included can provide protection

The BBC reported that the government is going to make it obligatory for landlords to pass on the full EBSS rebate to tenants who pay rent with bills included, including HMO occupants.

However, the government’s website is still relatively ambiguous on the matter, stating landlords are “encouraged to come to an agreement with you on the discount in line with the arrangement in your tenancy agreement”.

It also adds: “The landlord’s fixed charge may already provide you with similar protection from the impact of the energy price increase.”

Almost every eligible household across the UK (97%) has already received a £66 credit towards their energy bills, in what is set to cost the government £3.8bn. Further payments are expected to complete their rollout soon, as gas and electricity prices continue to rise.

Those households with traditional prepayment meters are receiving vouchers, which they are being encouraged to redeem as soon as possible.

HMO landlords ‘demonised’

Responding to the notion that the government would legally enforce HMO landlords to pay their energy bill rebates directly to tenants, Chris Norris, policy director at the National Residential Landlords Association, said this sends the wrong message to the sector.

“Given payments under the support scheme have not begun to be made, the government’s plans to legislate are premature and are demonising landlords unnecessarily.

“It sends a dangerous and misleading message that landlords cannot be trusted to do the right thing, creating needless fear and anxiety for tenants.”

He went on to criticise the capability of the current benefits system in assisting the most vulnerable members of society.

“The reality is that one-off pots of money like this cannot compensate for the fact that the benefits system is systematically failing to protect the most vulnerable tenants.

“At a time when households finances are being squeezed it makes no sense to have frozen housing benefit rates.”

Grant Shapps, Secretary of State for Business, Energy and Industrial Strategy, said: “The government is committed to supporting people facing unique stresses with the cost of living and rising energy costs. Today’s figures show how we are making a difference in over 27 million homes across Great Britain.”

The HMO sector has been making great strides in recent years in terms of popularity and investment levels, with an estimated £26bn worth of HMO properties across the country. High-end HMOs are particularly prominent at the moment, with investors finding greater demand from tenants seeking this property type.

BuyAssociation sources property investment opportunities directly from the developer, and currently has a number of HMO properties available. Get in touch for more information.

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