This winter, social housing landlords and their tenants face a perfect storm of fuel poverty conditions, with wholesale power costs at an all-time high and Ofgem's energy price cap being hoiked just in time for when the colder weather arrives.
Right now, rising energy prices are causing a great deal of concern across the nation.
Many tenants of social housing are understandably concerned about their ability to pay for heating.
For social landlords, price increases for gas and electricity are especially troubling. Housing Association Magazine’s Joe Bradbury discusses:
Over a quarter of those surveyed said that their company has raised rent or service fees as a direct result of the high energy costs
Raising rents exacerbate the issue
The socially conscious landlord is currently weighed down with worry about what rising energy bills for social housing organisations will ultimately imply for the inhabitants.
Escalating costs inevitably wind up being transferred to people and families who are already dealing with sharp rises in their standard of living, including their own growing energy bills.
A recent poll conducted by Inside Housing and Inenco (a company that assists businesses with efficient energy management and procurement) revealed that this is already happening at scale.
Over a quarter of those surveyed said that their company has raised rent or service fees as a direct result of the high energy costs they are now facing.
A further 13% predicted that they will need to make such increases within the next six months, and nearly 30% think they will be left with no choice but to do the same within the following six to twelve months.
Over 10% of households (approximately 5 million) in the UK are living in fuel poverty as a result of the high expenses of heating and powering a home during the winter; a period when we are forced to spend the majority of our time indoors.
Winter 2022/23 may get tough. Due to a confluence of factors, including growing energy costs, predictions of more extreme weather due to climate change, and (not least) government policies, the issue might worsen in the upcoming months, pushing many more families throughout the British Isles into fuel poverty.
Millions of UK individuals face severe financial hardship and public health issues due to fuel poverty, but it is also becoming a bigger problem for the landlords of social housing also.
These social housing providers are leading the nation's Fuel Poverty Strategy with required goals to increase the affordability, livability, and environmentally friendliness of their rental buildings for renters.
Rising energy costs threaten the progress that has been fought for tooth-and-nail over the last few years.
The cause of the problem
As nations emerged from their pandemic lockdowns last year, demand for natural gas soared globally, ultimately driving up wholesale costs.
Coupled with this, the invasion of Ukraine by Russia last February and the ensuing energy shortage has only driven prices higher. Imports of Russian coal and oil have been outlawed by the West, and as such, Europe is desperately attempting to wean itself off of Russian natural gas.
According to data released by the Office for National Statistics, June marked the first time in history that the United Kingdom did not import any petroleum from Russia - a country that has historically been one of its biggest suppliers.
The UK government made an effort earlier this year to shield people from 90% of the anticipated rises in energy costs through tax breaks, energy bill rebates, and direct payments. But since then, estimates of future price hikes as well as natural gas and electricity costs have skyrocketed.
Now, the UK must quickly find a solution to its skyrocketing energy costs or risk a humanitarian crisis.
However, the government may have to spend more than £100 billion to subsidise frozen gas and electricity costs over the next two winters, which is more than it did to pay the salaries of millions of people during the pandemic.
The number of homes experiencing fuel poverty could increase to six million from the current four million during this time. According to economists, the energy crisis may not ease for at least three years.
In the meantime, landlords would do well to ensure their properties are as energy efficient as possible and carry out improvements if they aren’t up to scratch.
The government is keen to make sure rental properties meet minimum energy efficiency standards, plus making homes more energy efficient will mean that none of the precious energy being used is squandered; especially in a time where every penny counts.