New build property - forced energy supplier

fair21comic

Hi All

I'm considering purchasing a new build property, but was recently told that the hot water heating system is communal, and that all residents are forced to use E-on as their energy provider and cannot change this.

This seems very odd to me, the ability to change providors being the consumor's biggest weapon against unreasonable prices.

Has anyone heard of this before?  Does it strike people as reasonable?

Very best

Jamie

Tomg84

I have heard of this but don't have any experience myself. From what I know and read people don't rave about it.

I would be wary as you don't have much control as to how much you get charged.

I do remember reading something about this type in the press https://www.bbc.co.uk/news/business-39736010
https://www.thisismoney.co.uk/money/bills/article-7229901/Banned-switching-energy-firm-71-years-Yes-really-Eco-plan-locks-new-build-residents.html

pimento

We are currently renting a house in Devon with this type of heating.
It's lovely to be able to have constant hot water without a boiler but by the 'eck is it expensive.  Our standing charge is £45 a month and even just the two of us in a brand new, fully insulated house, we've been paying over £100 a month.  That's PLUS the electric bill.  I'd say that we were careful with it as well.  I don't think I'd buy a house with this type of Hobson's Choice arrangement.  We're stuck with e.on too.  Not allowed to change supplier so they have us by the shot and curlies.

[Deleted User]

Alarm bells should be sounding. This is basically a scam to rip you off on energy forever and will make the property much harder to sell. Check if the whole thing is leasehold too.

I'd run a mile from this, you don't want to get stuck with it.

Thrugelmir

Going green is going to come to a cost to us all. Not having an annual boiler service nor the cost of replacing a boiler is a set-off. 

Taiko

I'd run a mile from these. You'll be at the mercy of whoever is setting the rates, and while yes they should recover any costs, the methodology isn't always great. I've seen ones where it's set to a price of almost £30 per cubic metre of hot water. 

zagubov

In the future energy is likely to be a major part of your outgoings so having it tied to a monopoly you can't change seems bonkers. Run, don't walk away from this.

dogshome

This is a  "District Heating" scheme

They fairly common in Germany where the costs to the residents are very reasonable, but this is the UK and an entirely different story.

Here you will captive to  high maintenance charges and expensive Kwh's.

DON'T DO IT and find somewhere else to live

pimento

Just looked at my latest bill. We were away for 15 days and the system was switched off.
Standing charge was £41.26 and the heating/water was £42.18 that's 819kWh at 5.15p
Plus 5% VAT.
I used to pay £80 a month for gas and electric at my previous four bed house.

sal_III

They are not a scam, it's just the way the district heating operates. The system is closed for the development and there is no way for different supplier to get involved. The whole development is usually licked in 20 years contract. Expect higher monthly cost than equivalent property on gas.

But the numbers are a bit misleading without understanding the full facts - the higher standing charge is paying for the maintenance of the "boiler" a.k.a HIU (Heat Interface Unit) if you get same from British gas it will set you back £20ish / month so suddenly £30/m standing charge for the heating is not that much.

Our bill is about £850/y for 1200sqft property, my only comparison for gas heating is against a property 1/2 the size where our gas bill was about 1/2 of that. When you factor in the boiler maitenance/insurance it's not that more expensive than gas. 

So ignore the scaremongering by people unfamiliar with the matter. If you otherwise like the property - go for it. 

pimento

When two solvent people are turning off the heating for fear of the monthly bill, I don't know how a young family with a mortgage or rent to service manage to pay it and I'm used to putting a jumper on when I'm cold.
Even adding on the boiler cover I was paying before it's still more expensive.
I for one, am glad we'll be moving into our own house with an old fashioned gas boiler in the next couple of months.  Our rented house is lovely but heating it is too expensive. I just don't understand how a modern house built to be insulated properly can be so costly to heat unless the cost is too expensive.  It doesn't help that there's nothing you can do about it, either.