High standing charge for heating supplied via council as freeholder

System
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This discussion was created from comments split from: Martin Lewis: Why are energy standing charges so high? What can be done.
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  • Help needed!
    We have recently purchased a flat and only a couple of weeks prior to completion we were made to sign a Heating Supply Agreement from the freeholder who is the council.
    Our heating has a standing charge of £2.16 per day! 
    this seems very excessive on top of our monthly service charge. Is there anything we can do to? 😟
  • GingerTim
    GingerTim Posts: 1,921
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    g179 said:
    Help needed!
    We have recently purchased a flat and only a couple of weeks prior to completion we were made to sign a Heating Supply Agreement from the freeholder who is the council.
    Our heating has a standing charge of £2.16 per day! 
    this seems very excessive on top of our monthly service charge. Is there anything we can do to? 😟
    Unfortunately, heating networks are unregulated and you are at the mercy of quite high standing charges and unit prices.
  • Agreed - unfortunately you have responsibility for checking you are happy with all of the terms relating to your purchase prior to completing your purchase. No one 'made' you sign anything or forced you to buy a flat that was part of a heat network.   

    You could try to lobby your local MP (if there's a lot of flats in your area with similar arrangements then you could set up an action group to increase your influence)... or plan your onward move with a lesson learned. 
    I'm not an early bird or a night owl; I’m some form of permanently exhausted pigeon.
  • tim_p
    tim_p Posts: 678
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    Depending on the cost of the heating supplied, this might not be a huge cost. How / what are you charged for the actual heating (and hot water?) itself?
  • Scot_39
    Scot_39 Posts: 1,689
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    edited 3 November 2023 at 2:17PM
    There was an Ofgem consultation exercise on community scheme energy charges - ended last month iirc.  Triggered by those paying commercial rates at peaks (over 4x Ofgem cap pricing for weeks on end in some case for gas and electric  - and without the 16p 33p EPG discounts either). 

    But suspect it won't amount to much when if ever it reports.  as there is little appetite for more compensation to energy users in govt.

    But currently you are likely 100% at the mercy of freeholder - who themselves are often at the mercy of tied contracts - going back to time of construction in some cases - or community heat system upgrades subcontracted out - in others.

    Where the energy systems installed by third party to save freeholders cash - often at significant expense if community boiler systems and HIU per flat - and they are then allowed to charge to rrecover often 'in perpetuity' accordingly.

    Lease holders had no options to switch to other suppliers - but some do offer a choice of plans apparently from  posts here). 



    Someone clearly hasn't asked the right questions if only just realising this now.

    Whether that's you, your solicitors etc is debatable.

    And it's unlikely to be cost free, but you may want to consider if too late to back out if realky unhappy.

    But suspect you may well have realised too late - if gotten as far as exchanging contracts and agreeing a move date - and probably just have to deal with consequences if that far down chain.

    Horror stories over last year of rates charged for wholesale linked supply contracts in domestic blocks made it into even low grade mainstream media.

    And even without that it is now perhaps naive not to consider annual energy costs - in any purchase these days.

    And buying ex council should always be scrutinised more carefully.  The deeds often have abnormal clauses cf private build - my parents bought ex council house- deeds had clauses re sell back and buy back procedure - not anything as worrying as first refusal - but enough to seek clarification by solicitor.

    Parents were never pressured - but others who bought 4 in a block or tenement have been forced to accept share of high (above private quotes gotten to try to challange in one family friends case - by £1000s ) council appointed contractors for reroofing etc.

    My sisters old flat - rental - was a local housing association with community heat. Heating was upgraded maybe early 2010s.  And each flat then got new HIU with own metering (mandatory ?).  Low users complained before thought were subsidising others, high users complained after.  Used to pay HA based on flat size along with rent, paid bills issued from new heat subcontractor after.

    Tennants / owners had a say at meetings, but no real power to change.
  • wild666
    wild666 Posts: 2,101
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    g179 said:
    Help needed!
    We have recently purchased a flat and only a couple of weeks prior to completion we were made to sign a Heating Supply Agreement from the freeholder who is the council.
    Our heating has a standing charge of £2.16 per day! 
    this seems very excessive on top of our monthly service charge. Is there anything we can do to? 😟
    £788.40 that's over £200 more than my combined electric and gas bills for the year 
    Someone please tell me what money is
  • tim_p said:
    Depending on the cost of the heating supplied, this might not be a huge cost. How / what are you charged for the actual heating (and hot water?) itself?
    The charge is £0.12p/kWh for the heating.
    Thank you for everyone's comments, we were only notified by our solicitor 3 weeks prior to completion. The property is a new build and the freeholder is the council as their offices were on the land previously.
  • Scot_39
    Scot_39 Posts: 1,689
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    Cheaper than electric heating per kWh.

    More expensive than gas - but with possible savings on servicing and maintenance of own boiler to offset. 

    And perhaps built into that higher SC rate.

    Iirc BG charge a few £100 per annum for boiler cover and annual service.
  • Gerry1
    Gerry1 Posts: 9,770
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    It's a double whammy.  The standing charge is 686% times more expensive than mine and the kWh charge is 74% more.  That far exceeds the cost of installing and maintaining a boiler.
    Looks like your solicitor may have some explaining to do.
  • Gerry1 said:

    Looks like your solicitor may have some explaining to do.
    Why would you assume the solicitor did anything wrong? 

    It sounds like the buyers were provided all of the information (including I would expect the EPC, which should have included the type and estimated heating costs) and decided to proceed. 

    Solicitors can't be expected to second guess and specifically highlight everything that the buyer might possibly want to know - the buyer has to take the time to actually read the documentation they've been given and ask questions about anything they don't understand/are worried about.  

    I'm not an early bird or a night owl; I’m some form of permanently exhausted pigeon.
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