Four words are dominating and shaping life for everyone across the country at the moment, namely: cost of living crisis.
With unions in different sectors overseeing strikes affecting many aspects of life, a general air of despondency filters out from every headline or news bulletin. Consumers are facing some eye watering hikes in prices and no sector raises more concern than energy, with bills set to soar from their already difficult current levels.
Deepening energy crisis
The issue is dominating the political arena and a survey just released, commissioned by the Liberal Democrats, has revealed that one in four people will not even turn their heating on this winter. The party’s Cabinet Office spokeswoman, Christine Jardine, has described the situation as a ‘national scandal’ and said parents were being forced to choose between heating their homes and feeding their children.
Energy prices are clearly uppermost in tenants’ minds, especially for those moving into new rental accommodation. Not only do they need to fund the initial deposit and first month’s rent all at once, they are required to sign up to energy direct debits at rates often ten times what they were paying before.
It is, in fact, not uncommon for new tenants being required to accept initial monthly direct debits of between £350 to £550 per month in order to be accepted as new customers based on a simple estimate of usage. Those sums are clearly beyond the limits of most, yet they have no choice as they have no track record in that property. The option of simply not turning on the heating is irrelevant in this case. With record wholesale energy prices there are also now no cheap deals available, so switching will not save money, according to moneysavingexpert.com.
So what is the solution?
One option might be to sign up a direct debit – clearly not negotiable – and then cancel this after one month. Thereafter, tenants could supply meter readings on a monthly basis to better reflect actual usage rather than an overblown estimate.
Quite what help the new Prime Minister might offer when he or she takes office, beyond the £400 non-repayable grant for most households this winter, remains to be seen but this amount simply only covers some of the first month’s direct debit for house movers.
Clearly people’s quality of life and mental health is being affected and the cost of living crisis and energy prices are impacting many beyond the benefits regime, who would normally not be affected.
Landlords may well now find that tenants are reluctant to move and those sitting with vacant properties will need to work harder to fill voids with so many costs front loaded for movers. The upfront cost of signing up to utilities means that the cost of moving has suddenly increased considerably, potentially pushing households into debt. Some imaginative thinking around other controllable costs might be required to keep the market moving.
