Advice for Landlords Dealing with Energy Cost Increases in Rental Properties and HMOs

By 9 min read • January 23, 2023
A radiator in the shape of a house.

I take part in many online discussions with other landlords and with tenants. This helps to keep me up to date with what’s happening in the private rented sector all over Great Britain. Often there are issues which are specific to one country and at other times issues which affect us all. I’m going to talk about something which is causing concern and potential damage to the PRS all over G.B.

Many, if not all of us, are very aware of the increase in the cost of utility bills, particularly the cost of the fuel which runs our heating systems since we hit this cold spell. For landlords, this causes two big worries: The first is that tenants will cut back on heating and our properties will be damaged by the consequent dampness and mould. The second is the increase in our overheads when we offer a property, usually an HMO, on an all-inclusive basis.

Taking the first issue first, there is very little we can do to change a tenant’s lifestyle and we cannot expect a tenant to spend money that they may not be able to afford. Therefore approaching this from a contractual obligation angle isn’t helpful. I cannot remember a time when the argument about what causes dampness – lifestyle or property conditions – hasn’t taken place. As landlords, we must concentrate on what we can control, the condition of our properties and in this case the energy efficiency. The Energy Performance Certificate is the starting point and if there are measures which are advised can raise the EPC level these need to be carried out. Some of these measures are expensive and, on the face of it, will not reduce utility costs over a short period but they will reduce the potential for dampness and mould and therefore possible health risks and ongoing costs.  

Protecting Properties From Cold and Damp

When buying white goods, it’s now really worthwhile spending a little extra to buy A and A+ rated items.

It’s worth investing in humidity-controlled extractor fans in kitchens and bathrooms to make sure that they remain on until the humidity is clear rather than those which go off shortly after the light is switched off.

Spotlights may look very smart but don’t go overboard, fit what is needed to give a good light but not enough to make them expensive to use.

Make sure that there are no gaps around pipes where they leave the building or other small openings in brickwork, small gaps cause drafts and heat loss and they also facilitate rodents who are looking for a warm home in winter.

Have thermostatic valves on each radiator except the bathroom so that each room can be controlled to a temperature which suits the occupier/user.

Supply a clothes airer for drying washing where tenants are reluctant to use a dryer and think that since the heating is already on it costs nothing to dry clothes on radiators. The reality is that the wet clothes draw the heat from the radiator and the boiler must work harder, which, to keep the radiator up to temperature is more costly. This also causes more moisture in the air which will find a cool surface and condense causing dampness and mould.

Fit trickle vents to every window. Now that most homes have double glazing and well-fitted doors moisture is trapped inside the building, a trickle vent in every window will not cause a draft, nor reduce the temperature but it will allow moisture to escape and a little fresh air to come in. Fit the vents which are constantly open not those with an option to close them.

Encourage tenants to clean any mould off windows and walls using dental mouthwash diluted with 3 parts water in a spray bottle and sprayed on the mould will clean it off and prevent it from recurring because it kills the spores. I found this online and it works much better than bleach or other products and an old toothbrush is brilliant for cleaning the mould in nooks and crannies. It leaves a nice clean smell too.

If you’ve got cupboards or wardrobes against outside walls and they are getting damp put a small container of rock salt, about £15.00 for a large bag from Amazon, in them. This will soak up the moisture but it will need to be emptied and replenished when it’s full of water. If the wardrobes are not fitted pull them away from the wall and the air circulating behind them will keep them dry.

In the end, we cannot control a tenant’s lifestyle and the argument about the cause of black mould will no doubt continue. But if we have done everything we can possibly do we now need to inspect our properties and make sure that any damp/mould issues are caught and dealt with at an early stage and before they become an expensive job and/or attract the attention of Environmental Health officers who will be concerned for the health of the tenants, particularly if there are children in the property.

If you can possibly afford to wait until spring before increasing rents this will put less financial pressure on your tenants and help to keep them and our properties warm and dry, it’s a good investment in the long run.

Dealing With Increased Energy Costs on Inclusive Rents

Turning to inclusive rents: I am going to tell you the story of a tenant who I have helped this week. This story makes many important points.

The HMO room was advertised at an average rent for a nice HMO room in the area, it was advertised on a popular portal as follows:

 “fully centrally heated house with 4 sharers…… Gas and electric – capped at £55 pcm per tenant … Extra costs – some bills included.”

The guy signed the contract and moved in on 25th November having paid rent in advance plus a deposit which is less than 5 weeks’ rent and is protected as it should be. He was also asked for a contribution to the gas and electricity of £20 in advance which he paid. After the contract was signed the tenant was sent all the documents including the EPC, until now he had no idea of the rating which turned out to be an E. 

There were already 3 tenants living in the house. The tenant found the house very cold and asked the landlord to increase the heat which was controlled by the landlord via an APP. The landlord replied by saying that the temperature was set at 17 degrees from 10pm until 6am and he offered these options:

  1. We can turn the temperature up 1 degree and the heating will come on more frequently but everyone needs to be aware and happy to do this.
  2. For anyone wanting to be warmer than others, we’ve given an option of supplying an oil-filled radiator with an energy monitor. The individual will be responsible to pay for this each month.

Please specify which option you want.

The following day the tenant mailed to say that the temperature in the house was 16.6 at 10.15 am and reminded the landlord that the legal requirement was for the heating to be capable of a temperature of 18 in a bedroom and 21 in a lounge when it is minus 1 outside, which it was at that time. He also reminded him that there was no mention of the tenants not being able to control the heating, which the law requires, and that he had paid the top-up of £20 in advance but it was now a freezing cold day and night. He told the landlord that he wasn’t interested in the spreadsheets that the landlord had provided and said that he would like to move into a house where he could be warm and could he have his rent refunded from the day that he moved out.

At this point, I was cringing reading the correspondence.

The landlord replied that the heating was controlled by the property management to avoid arguments between tenants and that they would all need to write to confirm that they agreed to an increase in the temperature. He said that he had now disabled the function to increase the temperature by 2 degrees because “someone” was increasing it every day and the cost of heating had increased by £20 a day. He then conceded that it was probably best if the tenant moved out but that he wanted a month’s written notice and he would then continue to charge the tenant rent until the room was relet, the tenant would also be charged for gas and electricity used during the time he had lived there – at this point less than 3 weeks.

On the face of it, the landlord had gone by the book – but had he?

1.    The law requires that the EPC must be available to tenants “as soon as it’s available or at viewing whichever is the later”. The point is that the EPC is part of the decision-making process and, while until now tenants haven’t really taken much notice of it, tenants are now very aware of the cost of utilities as are we all and therefore they will need to make certain that they will be living in a warm home as the law requires. That doesn’t mean a property which could be comfortable but where the landlord is controlling the heat to the point that it’s not legally compliant. There is no law which forces a landlord to offer “all-inclusive” and there are many thousands of tenants, in single lets and HMOs, who pay their own bills and control their own spending.     

  • A Fair Usage Clause is essential in an ‘all-inclusive’ let but we need to be clear about how a fair usage clause works and more to the point how it doesn’t work.  
  • The objective is to prevent tenants from abusing gas and electricity to protect the landlord.  
  • The objective IS NOT to protect landlords from fuel price increases – this is outside of the control of tenants and part of normal business management.
  • The correct way for landlords to protect themselves from fuel, or any other price increase, is to set a rent to cover these eventualities and be open about what tenants are going to pay. I am fairly sure that we will see a surge in room rates next year as tenancies come up for renewal and landlords have the real figures to use to calculate the increase in their overheads. This will not be popular but neither is the increase in many other necessary items at this time.  
  • The clause should be calculated on the previous amount of fuels used, in units not cost, in the property or for new landlords based on what other experienced landlords will tell you if you ask on a property Facebook group.  

An experienced HMO landlord who is also an accountant and therefore highly qualified to provide the information commented on this discussion:  

“I have simply monitored past usage and adjusted it for the new prices. Assuming there were four people in the house I would allow £3600 for gas and £1200 for electricity. The landlord referred to was totally unrealistic in his allowance”. The last comment refers to the landlord who put an arbitrary £20 top-up on top of a £55 pcm allowance, also a 4 room HMO, giving a total of £3,415 to cover both gas and electricity for the year 28% less than the landlord who had made a proper calculation which of course means that the tenants will pay but they will not be comfortable.

Property and people management is an important part of being a landlord and no number of spreadsheets will teach you how to deal with human beings. Sometimes tenants are unreasonable but, in this case, I believe that the tenant was very reasonable and when he realised that he was going to be in for a drawn-out battle he made the sensible decision to move on – but the landlord didn’t see that as a win. Here is what the tenant can now do:

  1. Report the landlord to Environmental Health Department at his local authority and ask them to carry out a Housing Health and Safety Hazard Rating Inspection (HHSRS HousingHealthSafety.qxd ( When the inspection is carried out simply locking up the heating controls is in breach and the temperature of the property will be a hazard. Let’s hope that he hasn’t overlooked anything else that they may pick up on.  
  2. Move out when his rent has run out on the basis that he was unaware of the EPC rating on the property because he wasn’t given his legal right to see the EPC “at or before viewing” and certainly before signing the contract. He can then submit this as evidence so that he could regain his deposit and can even take action for compensation if he was inclined. 
  3. If he really wants to torment the landlord, he could take action for an unfair fee Under the Tenant Fees Act because the only time that we can make a charge for utilities, which is allowed under the Act, is when we have a bill to show the cost and how it’s been divided between all the tenants -in this case having deducted the £55 per head which is allowed. Taking £20 each up front is a banned charge. You might say it’s part of the deposit and in fact, it could easily have been because the deposit would still have been below the legal limit of 5 weeks’ rent. 

The problem is that it wasn’t protected as part of the deposit and that as we know is unlawful. There is another claim waiting to happen.

I wonder if that landlord has deducted the government £400 fuel payment which he will have had via the fuel bill before charging the tenants the top-up since no bills are being shown?

I wonder if this will be one of the landlords who are posting for help all over Facebook because their properties are full of dampness and mould next year?

This case illustrates the fact that many landlords still miss the subtleties of the law and have stopped thinking of our tenants as people with their own financial pressures but are distracted by their reduced income. It is a bad time for many landlords but we will not come out the other end successfully unless we also protect our tenants and recognise that they will remember this winter, as we all will, and that we don’t want them to remember living in our HMO as part of a very bad time.

HMO Landlords: A Step by Step Guide From Start to Success in 2023
lv-An image of the Landlord Vision HMO Landlord Guide for Success-bg
HMO Landlord Guide
This free landlord guide will help you to learn the tried and tested ways to make your HMO rental property a success. Written by expert HMO landlord of 50 years, Mary Latham.
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