Energy price rises and price cap discussion.

[AM9]

In an ideal world yes it would be wonderful for all the BTL properties to be bought up by homeowners getting a foot on the ladder.

However, this isn’t always the case. There are always those who are not in a position to buy or want to rent due to the flexibility. No matter how much BTL is maligned, there is always going to be a need for privately rented housing. Where I live in the North West, there is already a glut of ‘2 up 2 down’ terraced housed on the market, for very reasonable prices, as more and more landlords have tried to sell over the past few years. Nobody wants them. First time buyers want 3 bed new builds with a drive and garden. So they sit on the market empty, gradually deteriorating and often end up in the auction.

Meanwhile here at least, there is a ridiculously long waiting list of prospective tenants looking for rentals with not enough housing supply to meet this. Rents are increasing due to demand, with multiple people bidding on the few properties that become available. This is a situation which is going to become much worse.

Indeed there are some terrible landlords (as there are tenants) but the majority are trying to do the best for their tenants but are genuinely worried about how they are going to meet the cost of these changes.

There may well be a glut of properties that have been ditched by landlords who don't have the commitment to make the houses meet the standards of the day, but if so many buyers want three bedroom dwellings, why are developers still building them? Eventually, local authorities wthat have a real problem providing enough homes will either redevelop the streets where they are, or take them over and insulate them to a respectable standard. There is no other option with houses that have no special features that would permit them the remain as examples of a particular decade's residential buildings. Most of them are in towns/cities so land is too precious to just leave them effectively wasting the space in thich they stand.
Anyone 'investing' in BTL property has to understand that however attractive the deal was, things have changed and will change even more in the near future, so if their assets lose value, that's the payback for the gravy train years that came about through the housing ladder addiction.

 

[Sm5]

A glut of properties entering the market? Sounds good for renters who aspire to buy which is quite a lot of them so I wouldn't be neccessarily worried about a shortage of rental properties just yet...

Yes but are renters renting because the purchase price is out of reach ?

 

[Trainbike46]

Yes but are renters renting because the purchase price is out of reach ?

in a lot of cases, yes

 

[AM9]

Yes but are renters renting because the purchase price is out of reach ?

Some yes, but a glut of properties will fix some of that.

 

[jon0844]

As I expect a lot of Tory MPs and Tory voters own properties they let, I doubt they'll want to bring in new rules to force landlords to improve their properties OR do anything that might put more houses on the market to buy.

We keep talking of the need to build new houses, but there's plenty of permission to build right now - and developers are quite happy to build slowly to keep prices up. Likewise, the Government wouldn't want to do anything that would almost certainly help lower house prices with many more properties up for sale.

(Of course that's a good thing - for our children and their children - but I can't see the current Government going for this. Even if they brought in new rules to better insulate homes, I am also certain there would be loads of loopholes and get out clauses - plus a pathetically poor level of enforcement).

 

[AM9]

As I expect a lot of Tory MPs and Tory voters own properties they let, I doubt they'll want to bring in new rules to force landlords to improve their properties OR do anything that might put more houses on the market to buy.

We keep talking of the need to build new houses, but there's plenty of permission to build right now - and developers are quite happy to build slowly to keep prices up. Likewise, the Government wouldn't want to do anything that would almost certainly help lower house prices with many more properties up for sale.

(Of course that's a good thing - for our children and their children - but I can't see the current Government going for this. Even if they brought in new rules to better insulate homes, I am also certain there would be loads of loopholes and get out clauses - plus a pathetically poor level of enforcement).

Then the alternatives are:

1) keep committing vast sums to enable the less wealthy to afford energy - probably equally unpopular with the Conservative support​

or​

2) do nothing which will result in lives lost, mass defaulting and probably insurrection.​

Neither is good for the prospect of future Conservative election success.

 

[12C]

Some yes, but a glut of properties will fix some of that.

Maybe in some areas yes, however as I said above in many others the glut of properties has already happened. If you search on Rightmove for a 2 bed house in many northern provincial towns for between £50-£100k there is a huge amount available. First time buyers generally do not want them, despite being very affordable.

As I expect a lot of Tory MPs and Tory voters own properties they let, I doubt they'll want to bring in new rules to force landlords to improve their properties OR do anything that might put more houses on the market to buy.

As you may have guessed I am a landlord of one property, accidentally I must add. I am not a multi millionaire Tory MP, despite what the media would have you believe. The government hates us nearly as much as the public and press do. They have made it more and more difficult to make BTL worthwhile for the ‘little people’, with changes to taxation, stamp duty, etc to the point where it is very difficult to make any return, even if you are lucky enough to have a tenant who keeps up with payments and looks after the property. Hence why most are selling up in droves and in many areas it’s virtually impossible to find anywhere to rent.

 

[Dai Corner]

Maybe in some areas yes, however as I said above in many others the glut of properties has already happened. If you search on Rightmove for a 2 bed house in many northern provincial towns for between £50-£100k there is a huge amount available. First time buyers generally do not want them, despite being very affordable.



As you may have guessed I am a landlord of one property, accidentally I must add. I am not a multi millionaire Tory MP, despite what the media would have you believe. The government hates us nearly as much as the public and press do. They have made it more and more difficult to make BTL worthwhile for the ‘little people’, with changes to taxation, stamp duty, etc to the point where it is very difficult to make any return, even if you are lucky enough to have a tenant who keeps up with payments and looks after the property. Hence why most are selling up in droves and in many areas it’s virtually impossible to find anywhere to rent.

They've even brought in minimum standards of energy efficiency as a previous poster mentioned a few pages back, but subsequent ones must have missed.

 

[AM9]

As you may have guessed I am a landlord of one property, accidentally I must add. I am not a multi millionaire Tory MP, despite what the media would have you believe. The government hates us nearly as much as the public and press do. They have made it more and more difficult to make BTL worthwhile for the ‘little people’, with changes to taxation, stamp duty, etc to the point where it is very difficult to make any return, even if you are lucky enough to have a tenant who keeps up with payments and looks after the property. Hence why most are selling up in droves and in many areas it’s virtually impossible to find anywhere to rent.

Similar to my wife who had a forced buy of a flat in 2009 at the top of the market, which was no longer needed in 2012. Since then the only practical choice was to let it until at least it's valuation reached the acquisition cost, despite some inflation and considerable renovation and repairs following problem tenants (which I won't go into). She has just managed to complete on it's sale with no real profit in 13 years. However she still believes that properties must be brought up to acceptable standards of energy efficiency, and recognises that a sitting tenant generally has neither the means or even permission to do anything about that, and that governmental enforcement will be the only way ahead. The problem is that this Government has little respect for local authorities of any colour so we doubt that anything much will be done in the next 2 years at least.

 

[Bletchleyite]

Maybe in some areas yes, however as I said above in many others the glut of properties has already happened. If you search on Rightmove for a 2 bed house in many northern provincial towns for between £50-£100k there is a huge amount available. First time buyers generally do not want them, despite being very affordable.

Many of these towns lack employment and prospects and so are depopulating. That is a slightly different issue. For instance I doubt I would want to live in e.g. "inner city" Blackburn or Oldham even if it was free, and if I did live somewhere like that I would be looking to see how I could plan to get out.

As you may have guessed I am a landlord of one property, accidentally I must add. I am not a multi millionaire Tory MP, despite what the media would have you believe. The government hates us nearly as much as the public and press do. They have made it more and more difficult to make BTL worthwhile for the ‘little people’, with changes to taxation, stamp duty, etc to the point where it is very difficult to make any return, even if you are lucky enough to have a tenant who keeps up with payments and looks after the property. Hence why most are selling up in droves and in many areas it’s virtually impossible to find anywhere to rent.

I have a lot of sympathy for accidental landlords who end up there through no fault of their own e.g. a work relocation or acrimonious divorce, but for investors I think they think about return the wrong way. Many BTL landlords borrow the money interest only, buy a house, maintain it as little as possible etc, and think only of return as rent minus interest plus costs. Those bad landlords we would be better without. Instead, if a landlord thought more about the appreciating asset they are gaining by buying on a repayment mortgage and stopped worrying about whether they made a profit month to month, and valued good tenants by keeping rent increases to the level of the increase in their costs, then the housing world would be a far better place.

I wouldn't rule out becoming a landlord in future, and if I do it'll be that type - using the tenant's money to help me build an appreciating, well maintained and well insulated asset which can be sold to help my retirement while providing the tenant with quality long term housing, not a quick buck.

 

[12C]

Many of these towns lack employment and prospects and so are depopulating. That is a slightly different issue. For instance I doubt I would want to live in e.g. "inner city" Blackburn or Oldham even if it was free, and if I did live somewhere like that I would be looking to see how I could plan to get out.

This is true, and has been for many years. There are a lot of areas which, for various reasons, will always be primarily rented housing. Same for properties near universities, hospitals, large construction sites etc.

Not only that though, even in nicer areas many first time buyers aren’t looking for ‘2 up 2 down’ terraced houses any more, especially if they’re looking at starting a family. They want somewhere with a off street parking and a garden.

This is why the argument that BTL landlords are taking away opportunities for people to get a foot on the property ladder isn’t always true.

I have a lot of sympathy for accidental landlords who end up there through no fault of their own e.g. a work relocation or acrimonious divorce, but for investors I think they think about return the wrong way. Many BTL landlords borrow the money interest only, buy a house, maintain it as little as possible etc, and think only of return as rent minus interest plus costs. Those bad landlords we would be better without. Instead, if a landlord thought more about the appreciating asset they are gaining by buying on a repayment mortgage and stopped worrying about whether they made a profit month to month, and valued good tenants by keeping rent increases to the level of the increase in their costs, then the housing world would be a far better place.

I wouldn't rule out becoming a landlord in future, and if I do it'll be that type - using the tenant's money to help me build an appreciating, well maintained and well insulated asset which can be sold to help my retirement while providing the tenant with quality long term housing, not a quick buck.

Agreed, bad landlords who intentionally skimp on maintenance need to be dealt with, however with recent legislation around gas/electrical safety and efficiency this is becoming harder to get away with, and rightly so.

There are other good landlords however who are trying their best but are concerned about what the upcoming EPC changes will involve. I have, over the past 2 years, spent a relatively large sum on a new boiler and new double glazing yet the house still only achieves a D rating. The recommendation to get it up to C is to install cavity wall insulation, the only trouble being there is no cavity wall.

Personally I’d think carefully about investing in BTL. Although that’s a good approach it can be devastating to see a property you have tried to look after destroyed by a bad tenant. There are probably better long term investments in stocks and shares that are a lot less stress.

 

[johnnychips]

Maybe in some areas yes, however as I said above in many others the glut of properties has already happened. If you search on Rightmove for a 2 bed house in many northern provincial towns for between £50-£100k there is a huge amount available. First time buyers generally do not want them, despite being very affordable.

Oof! Try the city of Doncaster, which is not exactly Harrogate or Wilmslow. There is sod-all available under £100k which are not wrecks.

I let a three bedroom property in a not-rough, not-posh area of Donny and the tenant always paid rent punctually. I should have inspected it more, but I wasn’t concerned. When she gave notice, the house was a wreck and the garden a junk infested jungle.

It took six months to get it back to an acceptable standard. Now this isn’t having a go at all the posters who think all landlords are evil, but at the start of the process, I thought ‘oh well I’ll get £650 a month when it’s done’ but six months later my agent advised me to ask for £750, which was easily achieved.

I do wonder where these cheap houses for under £100k are attainable? Edit: this may be seen as sarcastic. It isn’t.

 

[12C]

Oof! Try the city of Doncaster, which is not exactly Harrogate or Wilmslow. There is sod-all available under £100k which are not wrecks.

I let a three bedroom property in a not-rough, not-posh area of Donny and the tenant always paid rent punctually. I should have inspected it more, but I wasn’t concerned. When she gave notice, the house was a wreck and the garden a junk infested jungle.

It took six months to get it back to an acceptable standard. Now this isn’t having a go at all the posters who think all landlords are evil, but at the start of the process, I thought ‘oh well I’ll get £650 a month when it’s done’ but six months later my agent advised me to ask for £750, which was easily achieved.

I do wonder where these cheap houses for under £100k are attainable? Edit: this may be seen as sarcastic. It isn’t.

In my boredom at work I had a quick search on Rightmove, within 5 miles of Doncaster there are currently 533 properties for sale for under £100k. Granted they may not all be in the most desirable areas!

I can imagine it must be awful to see your house wrecked, unfortunately it’s all too common, even when the most thorough checks are done. And yes rents are rising dramatically, simple due to low supply and high demand.

 

[Cowley]

We could probably do with getting this back onto the topic of energy prices from here.

If anyone wants to let start a new thread on the subject of rental properties then let us know and we’ll split the relevant posts into a new discussion.

I thank you.

 

[Sm5]

Is it me or is this whole price cap discussion misleading ?

various quotes between £3k and £6k are really irelevent to a cap, as there isnt an upper limit cap… your billed for what your using.

What we have is a per unit price cap, which in todays market is little more than a fixed price Per unit as they are all heading to the max… (something those calling for nationalisation should note.. is actually no different to what you’d get).

on that same note, if you consider the £bns profit being made by energy companies, take that number divide by roughly 27mn households in the UK and you’ll find its barely a months energy bill…on a problem thats going to last for several years, and wont fall that much in the future either.

if were moving to a higher cost green energy future (the ultimate agenda here ), the government is going to have to subsidize it as the inflation is outstripping pay growth, and so will need to until the economy grows to a level it doesnt need subsidy... that or watch the economy collapse and yet more jobs/businesses relocate to lower cost countries that dont care about green energy, and sell their stuff back to us, via offshore non tax paying countries.

Surely this is just another project fear ?, prresumably leading up to the “great saviour” moment that our next dear leader will offer as an incentive to solve these ailments when selected in a few weeks time ?

why doesnt the media just say its x per kwh, rather than run around scaring everyone as if its the next covid… There is a high risk someone in the populace is going to overreact to this, do something darwinian and then whilst the media gets another hysteria story, someones life could be seriously impacted as a result of this fear narrative.

 

[tomuk]

Is it me or is this whole price cap discussion misleading ?

various quotes between £3k and £6k are really irelevent to a cap, as there isnt an upper limit cap… your billed for what your using.

What we have is a per unit price cap, which in todays market is little more than a fixed price Per unit as they are all heading to the max

It s a bit misleading, the £ cap is based on an average household's usage multiplied by the capped unit rate.

I do find it annoying that the whole industry\government think people can't understand a unit rate, same with all the comparison sites hard to find the actual rates.

 

[Cowley]

It s a bit misleading, the £ cap is based on an average household's usage multiplied by the capped unit rate.

I do find it annoying that the whole industry\government think people can't understand a unit rate, same with all the comparison sites hard to find the actual rates.

But isn’t that the problem anyway with the news these days? They’d rather continue with the headlong race to the bottom in quality with screaming fear ridden headlines than explain things so that people understand what it actually means to them in real terms?

 

[najaB]

if were moving to a higher cost green energy future (the ultimate agenda here )

Strange then that renewables are cheaper than gas by a significant margin...

 

[DelayRepay]

Is it me or is this whole price cap discussion misleading ?

various quotes between £3k and £6k are really irelevent to a cap, as there isnt an upper limit cap… your billed for what your using.

You are right - a lot of people don't fully understand how energy bills work hence we see confusion about what the price cap means, and confusion about how the energy companies set the Direct Debit (and why it differs to the actual monthly usage for a good part of the year).

I had a sit down with my mum at the weekend. She was really worried about the price increases based on the figures quoted in the media. But she lives on her own and her house is insulated, so her usage is nowhere near the average. When I sat down with her and worked through the figures, including adding in the extra government support she'll get, we worked out that she'll be ok. We then did the same using the projected January price cap (the £5,600 figures quoted in recent days) and concluded that things will be tight but, even then, she will be able to run the heating when she needs to.

It will still be beneficial for her to reduce consumption, but she doesn't need to sit in a cold, dark house over the winter. I wonder how many people will suffer this winter due to unnecessary cut backs because they don't understand how to work out their actual costs.

She also has no real idea what various things cost to run so her energy saving ideas are focused on the wrong things. She's been looking for devices on standby that can be unplugged after she saw advice in the paper. She'd be better learning how to use her central heating controls properly because at the moment she uses the timer which means she's regularly paying to heat the house when she's not at home.

 

[AM9]

You are right - a lot of people don't fully understand how energy bills work hence we see confusion about what the price cap means, and confusion about how the energy companies set the Direct Debit (and why it differs to the actual monthly usage for a good part of the year).

I had a sit down with my mum at the weekend. She was really worried about the price increases based on the figures quoted in the media. But she lives on her own and her house is insulated, so her usage is nowhere near the average. When I sat down with her and worked through the figures, including adding in the extra government support she'll get, we worked out that she'll be ok. We then did the same using the projected January price cap (the £5,600 figures quoted in recent days) and concluded that things will be tight but, even then, she will be able to run the heating when she needs to.

It will still be beneficial for her to reduce consumption, but she doesn't need to sit in a cold, dark house over the winter. I wonder how many people will suffer this winter due to unnecessary cut backs because they don't understand how to work out their actual costs.

She also has no real idea what various things cost to run so her energy saving ideas are focused on the wrong things. She's been looking for devices on standby that can be unplugged after she saw advice in the paper. She'd be better learning how to use her central heating controls properly because at the moment she uses the timer which means she's regularly paying to heat the house when she's not at home.

All of the above is the nub of the problem. Actual energy prices are escalating alarmingly, but the general public aren't being informed by the media in a way that they can help themselves. If the price of bread and milk was sharply rising, persistent quoting an average person's annual bill for those staple items would be laughed at so why confuse people by stating ever higher prices based on an unqualified average domestic energy consumption.

 

[davews]

Scare story the other day that it will cost £5 to cook the Christmas turkey (itself probably a bit more scaremongering than fact) while ignoring the fact that you may well be spending £40 or so on the food itself (and presumably even more on the booze) so even that is a small amount compared to the total cost.

 

[DelayRepay]

All of the above is the nub of the problem. Actual energy prices are escalating alarmingly, but the general public aren't being informed by the media in a way that they can help themselves. If the price of bread and milk was sharply rising, persistent quoting an average person's annual bill for those staple items would be laughed at so why confuse people by stating ever higher prices based on an unqualified average domestic energy consumption.

It's not just the media. When we had Covid, the government were quick to provide advice about how to avoid infection. Whatever you think of the actual advice, nobody can deny that it was very readily available. Yet I have seen no real advice from the government about how to reduce your energy consumption (actual practical steps that people can take, as opposed to things that need an upfront capital investment). It's left to the likes of Martin Lewis and the newspapers to give advice, much of which is wrong.

I guess it is not palatable for the government to say 'part of the the solution to this problem involves reducing demand, so please can everyone wear an extra jumpers this winter.'

 

[deltic]

I guess it is not palatable for the government to say 'part of the the solution to this problem involves reducing demand, so please can everyone wear an extra jumpers this winter.'

Cakeism is the worst legacy of this government, the idea you can have what you want and there are no trade-offs. Some European governments are openly talking about energy rationing and legally requiring thermostats to be turned down. Last time we had an energy crisis in the 1970s the UK government reduced speed limits on the road network to save fuel and I don't recall much outcry about it. This time round there seems to be a fear of telling people unpalatable truths. Fuel prices arent going to return to previous levels any time soon or ever. The 1970s oil shock saw a considerable improvement in energy efficiency in manufacturing we need to use the present crisis to do the same. Allowing the sale of massive SUVs whether they are electric or not is bonkers, we need to reduce our energy consumption.

 

[DelayRepay]

Scare story the other day that it will cost £5 to cook the Christmas turkey (itself probably a bit more scaremongering than fact) while ignoring the fact that you may well be spending £40 or so on the food itself (and presumably even more on the booze) so even that is a small amount compared to the total cost.

I bet it didn't take account of the fact that in many houses, the Christmas turkey takes longer to cook than a typical meal because it's bigger, because there will be more people there. So the 'cost per mouth' if you like wouldn't be as bad. It also fails to take into account that there will be leftovers for sandwiches, so less cooking will be required on Boxing Day.

Of course a big meal will cost more to cook than a small meal. Do we need the newspapers to tell us that?!

 

[AM9]

It's not just the media. When we had Covid, the government were quick to provide advice about how to avoid infection. Whatever you think of the actual advice, nobody can deny that it was very readily available. Yet I have seen no real advice from the government about how to reduce your energy consumption (actual practical steps that people can take, as opposed to things that need an upfront capital investment). It's left to the likes of Martin Lewis and the newspapers to give advice, much of which is wrong.

I guess it is not palatable for the government to say 'part of the the solution to this problem involves reducing demand, so please can everyone wear an extra jumpers this winter.'

Yes, it is the government of 'freedom of choice', for those that have a choice of course!
But if it was explained in clear terms, the reaction at least would be measured. I remember as a child when many had gas & electricity meters that required a shilling to work. Those who had them knew what that shilling gave them, eg so long of a heater running on one bars vs. two bars, and how many hours or days that the lights would stay on, etc. This allowed those on tighter budgets to manage their energy usage.
It's more difficult with so many devices with thermostatic and other self-management control but this global average yearly cost per home is just a distraction to those who need to know. Would the government/media announce a rise in the price of beer by using the average price that a drinker spends per year?

 

[DelayRepay]

Yes, it is the government of 'freedom of choice', for those that have a choice of course!
But if it was explained in clear terms, the reaction at least would be measured. I remember as a child when many had gas & electricity meters that required a shilling to work. Those who had them knew what that shilling gave them, eg so long of a heater running on one bars vs. two bars, and how many hours or days that the lights would stay on, etc. This allowed those on tighter budgets to manage their energy usage.

I once lived in a house with a pre-payment meter (the kind with a plastic key that you had to take to the Post Office to top up). It was already there when I moved in, not due to me being behind with payments.

I was far more energy conscious when I had to keep topping up the meter. Not just because I could see the immediate financial impact, but also because it was inconvenient to top up. There were many times I looked at the meter and turned some electrical devices off, not to save money really but to try to stretch the electric to last until the next day, so I didn't have to go out to top it up.

 

[Yew]

any company can get staff, if they open their treasure chests a bit wider.

Let's remember that full employment isn't just "everyone has a job" but "everyone has a job that maximises the use of their skills". A load of highly skilled professionals working 20 hours a week on the checkouts at Tescos does not make for a highly productive economy - something that the Conservative party often misses.

 

[Dai Corner]

Yes, it is the government of 'freedom of choice', for those that have a choice of course!
But if it was explained in clear terms, the reaction at least would be measured. I remember as a child when many had gas & electricity meters that required a shilling to work. Those who had them knew what that shilling gave them, eg so long of a heater running on one bars vs. two bars, and how many hours or days that the lights would stay on, etc. This allowed those on tighter budgets to manage their energy usage.
It's more difficult with so many devices with thermostatic and other self-management control but this global average yearly cost per home is just a distraction to those who need to know. Would the government/media announce a rise in the price of beer by using the average price that a drinker spends per year?

Those on prepayment tariffs learn how long £10 lasts in the same way as those who put shillings in. Smart meters give even more detail via the in-home display or suppliers' websites to both prepayment and credit consumers.

I agree that the typical bill for those paying Government-capped prices is meaningless and misleading. Even my intelligent, well-educated (but not in scientific, technical areas) mother and stepfather who are on a fixed tariff are worried enough to only heat hot water for an hour every other day and go without baths or long showers.

Oh and don't mention Martin Lewis!

 

[Yew]

Maybe in some areas yes, however as I said above in many others the glut of properties has already happened. If you search on Rightmove for a 2 bed house in many northern provincial towns for between £50-£100k there is a huge amount available. First time buyers generally do not want them, despite being very affordable.

If they are not what buyers want, they should be knocked down and replaced with homes fit for the 21st century, rather than whatever the mill owners thought was cost effective a hundred years ago.

 

[yorksrob]

Cakeism is the worst legacy of this government, the idea you can have what you want and there are no trade-offs. Some European governments are openly talking about energy rationing and legally requiring thermostats to be turned down. Last time we had an energy crisis in the 1970s the UK government reduced speed limits on the road network to save fuel and I don't recall much outcry about it. This time round there seems to be a fear of telling people unpalatable truths. Fuel prices arent going to return to previous levels any time soon or ever. The 1970s oil shock saw a considerable improvement in energy efficiency in manufacturing we need to use the present crisis to do the same. Allowing the sale of massive SUVs whether they are electric or not is bonkers, we need to reduce our energy consumption.

Those sort of improvements need to be made over time, which means that the "shock" needs to be managed.

The only way that will happen is with reform of the energy market from extraction onwards.