Landlords stepping up to help tenants cope with rising utility costs
Introduction
The NRLA regularly commissions the market research company Dynata to undertake a tenant survey. The survey gives valuable tenant-based insights into the state of the Private Rented Sector (PRS). Recently these surveys have provided an evidence-based understanding of landlord tenant relationships.
Conducted in March and April of 2023, the survey collected views from over 2,000 (2022) rent paying tenants of residential properties in England and Wales.
Whilst a few respondents were lodgers, and a handful rent from friends or family, most participants were tenants who rented from one of three groups:
- An independent landlord (or couple).
- The corporate or company sector.
- Renters who let via a letting agency.
This blog post focuses on the impact rising utility bills has had on tenants and their household budget. It investigates whether tenants have raised concerns with their landlord. Whilst landlords themselves face challenging times, many are looking to find ways of supporting tenants and sustaining tenancies - in contrast to media coverage.
Impact of rising utility bills on tenant finance
The cost-of-living crisis has been exacerbated by both inflation and rising utility bills. Despite Government interventions such as the energy price cap and a £400 one-off payment, many households are struggling to keep up with the cost of basic necessities.
The survey asked tenants about the impact that rising utility bills have had on their household budget.
Given the sharp increase in energy prices, it comes as no surprise to see that most tenants surveyed – over 80% - have had to make some form of cutbacks elsewhere in their household budgets.
By contrast, only a small proportion of tenants – 16% - stated they have not had to make any cutbacks at all. Looking more closely at the responses of those tenants whose household budget has been affected by rising bills:
- Over one-third – 35% - have been able to pay their bills by “making a few cutbacks here and there”
- A little over one-quarter – 29% - have “made large reductions to spending” to keep up with the demands of utility companies.
- Findings showed that 9% of tenants have “found it really tough” stating there has been “major implications for them and their household budget”.
- Finally, 7% of tenants stated they have “struggled with their bills and have "negotiated with utility companies” in order to get through the winter.
Have tenants been discussing rising utility bills with their landlord?
The survey found that most tenants – 85% - had yet to broach the subject of utility bills with their landlord. The 14% of tenants (278 tenants in the sample) who had held such a discussion with their landlord were asked about the outcome of that conversation. This section focuses on this group of tenants and the outcomes of these discussions.
Overall, responses showed that when a conversation has been had, landlords typically responded in a positive manner – approximately two-thirds (66%) of this group of tenants stated their landlords had provided some practical assistance.
The responses cited by tenants involved use of various tools. These ranged from landlords helping tenants access grants to pay utility bills (13%), to spending money on improving the energy efficiency of the property (20%). Other specific interventions identified by tenants included:
- Landlord has helped with household bills (cited by 13% of tenants who had raised concerns over utility bills with their landlord)
- Agreed a rent holiday/rent window (9%)
- Landlord agreed to reduce the rent enabling me to stay in the property (8%)
- Landlord has waived off debt owed (7%)
(Note: multiple responses were allowed for this question)
What actions have tenants taken to limit the impact of rising bills?
The below chart displays responses of tenants when asked to state what strategies they themselves have had to employ to help cope with rising utility bills. Amost 90% of tenants employed at least one of a series of individual adjustments presented to them in the survey. The chart below shows the most common responses:
Chart 1: Tenant actions in response to rising utility costs
The two most common actions taken by tenants involve measures that limit energy usage:
- Over half of tenants (53.4%) cited (i) limiting heating and hot water times and (ii) turning off heating in certain rooms.
The chart reveals that tenants reported reductions in both essential and non-essential spending:
- Cuts to non-essential spending, such as entertainment and household treats were cited by 51% of tenants while 27% of stated they had reduced car usage.
- Meanwhile, 47% of tenants said they had reduced their daily food/drink expenditure.
Finally:
- Only a few tenants (17.1%) reported investing in basic energy-saving measures, such as draft excluders.
- Asking for help from family and friends and using credit cards/bank finance to pay utility bills were reported by 15.7% and 11.2% of tenants, respectively.
(Note: multiple responses were allowed for this question)
Damp issues
Tenants were asked whether they had experienced problems with damp, mould, or condensation. Findings showed there was around an even split between those who had (48%) and those who had not (49.5%).
Tenants who had experienced issues, were invited to comment on the extent to which these issues were influenced by rising energy bills, and the result of having the heating on for less time than usual. The same question was also put to landlords in our latest Quarterly consultation (Q1 2023).
The below graph compares the results between the landlords and tenants who had recent experience of damp or mould related issues:
Chart 3: Recent influence of heating on damp and mould problems
As shown in the graph, landlords were more likely to think that issues with damp, mould and condensation were in larger part a result of rising energy prices and the heating being on less frequently. The contrasting viewpoints underlines the need for public information campaigns to increase understanding of the consequences of not turning the heating on as often in a property.
Summary
The findings of this tenant survey shed light on the impact of rising utility bills on tenants' finances and the measures they have had to take to cope with this sudden shock.
The majority of tenants have been affected by rising energy prices. Tenants have employed various tactics to limit the impact of rising bills, with limiting energy usage and cuts to both non-essential and essential spending being the most common. This has had knock-on effects on the condition of rental properties. More should be done to inform stakeholders about the consequences of not having the heating on during winter.
The survey found that when tenants have had a discussion about concerns over utility costs with their landlords, most received positive responses and support. Tenants concerned about rising utility bills should talk to their landlord, the findings of the survey show that typically, the outcome of such conversations have been both beneficial and worthwhile, with the landlord placing value on the tenant relationship.