A surprising call has come from a major industry supplier – it wants landlords to set up standing orders with their tenants to make sure energy bills are covered.
Richard Wayman, finance director of CIA Landlord Insurance, says:“The rising cost of bills is a worry for many people. For both landlords who pay out for bills, and for tenants that cover their own, the extra cost will undoubtedly cause some tension with pressure on both sides to help with their fair share without the burden falling too heavily for either side.
“Landlords and tenants should work together to make sure that neither party will be struggling in the coming months.
“There have been reports of landlords asking tenants to pay the lump sum of hundreds with energy prices going up. However, if this is the case then landlord’s should make sure that any government rebates are going back into the pockets of their tenants.
“Where possible, if a tenant is concerned about how they will be able to pay for the lump sum, landlord’s could set up standing orders with their tenants to make sure the energy bill is covered over a number of weeks/months in order to make sure the tenant is not left struggling to afford their living essentials.”
Wayman says many people have already been asked to pay a lump sum extra on top of their bills, leaving them struggling to make ends meet.
A statement from CIA Landlord Insurance says: “Unlike for the standard homeowner, the question of where the responsibility lies for this lump sum is not as clear for landlords, or their tenants.Reports have shown that tenants are concerned that landlords will either demand the lump sum up front, or take the council tax rebate for themselves and then hike up the rent.”
Meanwhile Sarah Coles, personal finance analyst at business consultancy Hargreaves Lansdown, has identified tenants as one of three groups most at risk as a result of the increasing energy and other costs.
She says: “Renters, parents and divorcees are set to face horrible challenges as prices rise. Those on the lowest incomes were most likely to struggle, but those who rent a property, have children living at home, or are trying to recover financially after a divorce also face a real risk of hitting a brick wall financially after massive bill hikes.”
The latest Hargreaves Lansdown Savings and Resilience Barometer, a measure of personal finance produced with Oxford Economics, found that fewer than one in five people on the lowest incomes have enough money left over at the end of the month to be comfortable.
Specifically, she suggests that three in five renters don’t have enough wiggle room in their budgets to face price rises with confidence, and single people are half as likely to be resilient as couples.
Those with outstanding mortgages have more than those paying rent, according to Cole, who says rents absorb a much larger proportion of income – at 31 per cent compared to the 18 per cent that mortgage holders pay.
