What is presently unfolding regarding energy bills?
The majority of energy bills are determined by the regulator and the government. Ofgem makes use of a specific spreadsheet, a structured and agreed-upon mechanism, to calculate the standard variable price.
Currently, a small percentage of households opt for fixed energy deals, with over 90% of UK residents on variable tariffs. Due to the mechanised nature of energy tariffs, analysts can attempt to predict future energy prices. In 2024, expectations suggest relatively stable energy bills, subject to quarterly fluctuations by a few percentage points.
However, unforeseen events, like another price shock, can disrupt these forecasts. Early signs indicate a softening in wholesale energy prices, potentially leading to lower bills later in the year.
What should tenants and landlords be attentive to in 2024?
Letting agents can assist landlords by staying informed about available schemes, including:
What is the Boiler Upgrade Scheme?
Since September 2023, the government has allocated £7,500 to replace boilers with renewable heat alternatives until 2025, covering air, ground, or water source heat pumps, and biomass boilers. Landlords should consider exploring this scheme for potential future boiler replacement, taking advantage of available funding.
Ultimately, transparent conversations between tenants, letting agents, and energy suppliers are crucial to accessing such schemes.
What lies ahead for EPC targets in 2024?
In 2020, the government planned to raise Minimum Energy Efficiency Standards, aiming for EPC Level C or better in all new tenancies by 2025. However, these plans were abandoned in September 2023 by Prime Minister Rishi Sunak in a speech on Net Zero targets.
Under the current government, the fate of these plans remains uncertain. With a pending general election in 2024, it’s essential to consider Labour’s proposals, such as the Warm Homes Plan and the creation of Great British Energy, a publicly-owned clean energy company.
While the government’s direction is unclear, research indicates that homes with high EPC ratings are gaining importance for prospective tenants. Landlords should still prioritise energy-efficient properties to attract eco-conscious tenants or those seeking lower utility costs, despite the lack of government guidance.
The information in this post is valid to the best of our knowledge on the date of posting. It is advised that you seek independent advice based on your individual circumstances.
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