Landlord - October £200 Energy Loan

Silmaril

Hi,

Hypothetical scenario which may potentially occur for some landlords...

If you have a property vacant when the £200 credit hits your bill, and then subsequently a tenant is found - how would this work?

Would the landlord have to keep an account open and return the £200 over several years? my understanding is a property can only have one energy account, so don't see that working?

Would the tenant be liable and the landlord responsible for reimbursement?

Would the outcomes vary if pre-payment? Eg, when clearing down the balance would this be paid to bank account or the facility to settle the loan be available?

Will there be an option to immediately return the £200 in full?

Would there be protection for tenants on low incomes who could not stand a £40 debit on a prepayment meter, when they perhaps don't have this - would they go into debt and have energy supplies cut?

What about if the £200 credit goes to the tenant, and then they move?

Thanks,
Sil

molerat

You are overthinking it.

 £200 will be credited to accounts.

 In 2023 account holders will start paying a levy to recover the money.  There is no correlation between the 2. 

If you close an account which is in credit you get the credit balance in cash, bonus !. 

If you didn't have an account when the £200 was credited and in 2023 you do tough luck. 

With pre-payment meters the account holder is likely to receive a smart meter credit, voucher or cheque which they could spend as they wish.

You, as a landlord, have no responsibility to do anything different to now.

https://www.moneysavingexpert.com/news/2022/02/martin-lewis--how-the-flat-rate-p200-energy-bill-loan-really-wor/

Silmaril

That seems unfair for tenants and exploitable by some landlords though?

Example.. kid living at home, moves out in Jan 2023 - hit with levy

Example... (Extreme to illustrate) landlord has a block of 100 flats. Development work finishes in September and so landlord has 100 accounts with which to receive £200 - landlord is up 200k. Tenants move in from November and take the hit

EssexHebridean

Silmaril said:

That seems unfair for tenants and exploitable by some landlords though?

Example.. kid living at home, moves out in Jan 2023 - hit with levy

Example... (Extreme to illustrate) landlord has a block of 100 flats. Development work finishes in September and so landlord has 100 accounts with which to receive £200 - landlord is up 200k. Tenants move in from November and take the hit

Example, kid lives at home, moves out in Jan 2023 - still has to pay all the levies that have been in place for years, for green energy, the WHD, the costs caused by the SOLR process… exactly as they always have. 

Silmaril

Yeah get that it's a levy, just think there are individuals at opposite ends of the spectrum who could either really benefit or really suffer as a result of this. 

I guess doing it electively wouldn't be feasible, but some way to stop owners of multiple properties benefitting seems prudent

Thanks for confirming what I thought. If we're in this scenario, where we benefit, we'll reduce rent by £40 each April. Hope others do too.

MWT

Silmaril said:

Example... (Extreme to illustrate) landlord has a block of 100 flats. Development work finishes in September and so landlord has 100 accounts with which to receive £200 - landlord is up 200k. Tenants move in from November and take the hit

£20k not £200k, but I wouldn't assume that all those accounts are going to get the £200 as they would probably still be in the name of the developer and easily identifiable as not yet residential.

... but who knows, someone could well get lucky...

markin

Silmaril said:

Yeah get that it's a levy, just think there are individuals at opposite ends of the spectrum who could either really benefit or really suffer as a result of this. 

I guess doing it electively wouldn't be feasible, but some way to stop owners of multiple properties benefitting seems prudent

Thanks for confirming what I thought. If we're in this scenario, where we benefit, we'll reduce rent by £40 each April. Hope others do too.

Unless they are a first time bill payer they will have got it on the current energy account, Nobody move on that day in case it gets lost in the ether.

Sosi

Strange that the government rejected the removal of VAT on the premis that people who don't need the help will also also benefit. How is that scenario different to giving everyone a £200 credit, even people who don't want or need it?
I personally don't believe " a loan" is the answer. Energy is only going to go up more and more over the years because the shareholders need to make a profit. How are many people going to budget for an extra £40 year when the cost of living doesn't allow many to save. Also, I read somewhere that the energy companies want the cap reviewed every three months. Is that correct? There is no control over their profiteering. Also I suspect that they don't want to get rid of VAT as they will want to increase it in the near future as well as adding extra carbon taxes on.

MWT

Sosi said:

Also, I read somewhere that the energy companies want the cap reviewed every three months. Is that correct? There is no control over their profiteering.

 As long as the cap remains based on prior months costs, then in a market where prices are rising quickly the cap forces the suppliers to sell below cost, reviewing every three months just means they lose a little less than they would do otherwise, it doesn't equal 'profiteering'...

badmemory

Yes the landlord will be able to profit by the £20k or £200 per household.  I would be very interested to see how many landlords currently paying their tenants energy bills (& recharging the tenants) will suddenly find it necessary to re-write their contract so that the tenants pay them direct.  I'll bet there is someone working for an EA writing that out right now.

rogerc446

Sosi said:

Strange that the government rejected the removal of VAT on the premis that people who don't need the help will also also benefit. How is that scenario different to giving everyone a £200 credit, even people who don't want or need it?

There's a lot of generalisations in what's been announced, e.g. that everyone with a big house (council tax E upwards) and/or has high energy billis is cash rich.  What was said was that the VAT benefits high energy users (in theory larger hours, people who can afford it) more ($£5000 energy bill = £250 saving, £500 energy bill = £25 saving), whereas the £200 flat payment + £150 council tax rebate for council tax bands A-D benefits the lower income households disproportionately. 

I also suspect it's considered politically more difficult to reverse a VAT rate cut if prices were to go down.