Landlords are potentially costing tenants significant sums of money by barring them from changing energy supplier.
This is the claim from price comparison site uSwitch which, after surveying 500 landlords and 1,000 tenants, reports that 13% of landlords admit to preventing a tenant from switching supplier.
This figure rises to 19% among landlords who let three or more properties.
Energy regulator Ofgem has confirmed that renters who are responsible for paying their energy bills are allowed to switch supplier and that landlords and letting agents cannot unreasonably prevent them from doing so.
It says a ‘preferred supplier’ clause can be used in rental agreements, but tenants are under no obligation to use the named provider.
Despite this, uSwitch claims there are high levels of confusion among landlords and tenants when it comes to renters' energy switching rights.
After speaking to landlords, it found that 43% who say they bar their tenants from switching do it because they believe the energy supplier in the rental property is the choice of the landlord.
The ‘preferred supplier’ clause has led to confusion among tenants, says uSwitch, with 39% of those surveyed incorrectly believing it means they must remain with the specified supplier.
The report suggests that around 5% of renters who haven’t switched supplier at their current address say it is because their tenancy agreement expressly prohibits it.
uSwitch reports that 79% of tenants say they didn’t receive any information on how to switch supplier at the start of their tenancy and that 60% of tenants believe that landlords should provide more information about managing utilities when moving in.
“Landlords who unfairly refuse tenants their right to switch are standing in the way of more affordable energy for millions of homes,” comments Ann Robinson, Director of Consumer Policy at uSwitch.
“It’s time to stop landlords pulling the wool over renters’ eyes. We are calling for an urgent review of misleading terms in tenancy agreements, better training for landlords and more information for tenants about their rights. Energy switching should not be out of reach for the people who need it the most.”
uSwitch says it has launched a manifesto to 'help Generation Rent save money on their energy bills'.
It has set out five requirements it wants to see implemented:
- The Competition and Markets Authority (CMA), as part of its ongoing energy market investigation, to look at ways of tackling confusing contract terms relating to energy switching in tenancy agreements. For example, reviewing the preferred supplier clauses that many landlords are using to prevent tenants from exercising their right to switch
- The CMA to mandate the inclusion of a simple, standard clause in tenancy agreements which states that tenants who pay for their energy directly have the right to switch energy supplier
- Landlords and lettings agents, in the meantime, to cease the use of unfair clauses in tenancy agreements which state that tenants cannot switch supplier when the renter has responsibility for paying the energy bill
- Landlords and lettings agents to inform tenants at the start of each tenancy about how to switch along with details of where to find and access their energy meters
- The National Landlords’ Association to include basic training for landlords about helping tenants manage their utility bills, including a tenant’s right to switch, as part of its Landlords Accreditation Scheme.