So what can you do as a landlord to help your tenants through these hard times and ensure they can continue to stay in their home?
1. Tackle utility costs
The first thing that will help tenants keep control of their bills are gas and/or electricity smart meters. If your tenants pay their own bills directly, they can request a meter switch themselves from their supplier.
The meters come with a portable in-home display device that communicates wirelessly with the meter and can show energy usage by minute, hour and day. Your tenants can put the display somewhere convenient and easily see which appliances and activities are using the most energy and where they could make savings.
If your tenants are on prepay, they can top up the account via an app, text message or phone. And if they pay monthly, readings are sent automatically to the energy supplier at least once a month, so their bills will always reflect their actual usage, rather than charging them based on an estimate.
So encourage them to switch and point them to the Smart Energy GB website for more information.
The types of savings that people can make are often very bespoke to their lifestyle, but small changes can be substantial. For example, it’s estimated by the Energy Savings Trust that just turning things off that are on standby can save people £55 a year, or having a four-minute shower could save £70.00 a year, and even not filling the kettle up each time can save £36.00.
And, as the landlord, make sure that the property itself is as energy-efficient for them as possible, for instance:
- Insulate the walls, roof and floor to conserve heat
- Install an energy-efficient boiler
- Provide white goods that have a good eco-rating
2. Advise tenants on heating their home to keep it in good condition
If your tenants are cutting back on heating to save on bills and are also keeping the windows shut to stay as warm as possible, there’s an increased chance that the property could become damp and mouldy.
When there’s moisture in the air that can’t escape, it will settle on cold surfaces and if this condensation isn’t wiped away, mould can start to form and that can pose a risk to your tenants’ health.
So it’s worth alerting your tenants to this. Remind them to ventilate properly — that’s using extractor fans if you have fitted them and opening the windows periodically — and advise them to keep the heating on low in the cooler months.
If you’ve already done all you can to make the property as energy efficient as possible, this really shouldn’t cost very much. It will help make sure the property stays in good condition, prevent pipes from freezing and bursting in winter, and your tenants should be healthier and happier!
3. Make small annual increases in rent
When landlords have good long-term tenants, they’re sometimes reluctant to increase the rent because they don’t want to risk the tenants leaving.
However, this can actually be detrimental to the tenant. While rent increases might not sound like a good thing, the reality is that gradual inflation is normal. Even social housing providers typically increase rents to their tenants by inflation plus a little extra each year.
So if you’ve kept their rent the same for several years, when they do eventually move on and are faced with current market rents, it could be a huge shock.
If their earnings haven’t gone up much over that time, they may even find they can’t afford to move to a similar type of property.
For the ten years prior to the pandemic — the start of 2010 to the end of 2019 — although there were fluctuations, the annual rate of inflation was an average of two per cent.
If you were charging £1,000 rent in 2010, for that amount of money to buy you the same amount of goods and services, you would need to be charging £1,247.45 a month. That’s nearly an extra £3,000 a year which could go towards helping to pay for any energy efficiency costs and could even stretch to a new boiler.
So, aim to put your rents up by at least that percentage annually — and explain to your tenants why you’re doing it, so they appreciate you’re not simply trying to make more money out of them.
4. Handling deposits
During the cost of living crisis, it may be harder for tenants to find the money for rent in advance and a security deposit.
The good news is there are ways you can help them that still protect you — and the tenant.
5. Maintain a good line of communication
Communication is key to having a good relationship with your tenant. You or your managing agent should be in touch with them periodically to check that everything is running smoothly with the property and to find out if there’s anything they need. Often, tenants won’t report small problems, so it’s a good idea to prompt them every now and then.
Importantly, make sure they know to call you or your agent if they’re not going to be able to pay their rent on time and in full. When times are challenging for everyone — as they have been over the last couple of years — it’s important to recognise that tenants might be struggling financially through no fault of their own.
So, as long as it isn’t going to be a long-term issue, you should be able to agree on a payment plan that will allow them to make up what they owe you over a few months. Being understanding and doing what you can to help them through a tough time is likely to be appreciated.
6. Make sure tenants know what financial help is available
If your tenant is on a low income, loses their job or is struggling financially, there are a number of schemes and incentives they might be eligible for, including:
- Universal Credit. If your tenants are out of work or in low-paid employment — including self-employed or part-time — they may be eligible for a Universal Credit payment to help with living costs. Tenants can apply online via the GOV.UK website
- Pension Credit. If your tenants are pensioners, they may benefit from Pension Credit. Many are eligible, but don’t claim this help, yet it can be worth up to £14.48 a week for a single person, and £16.20 for married couples and civil partners. For more information, visit Money Helper
- Council tax reduction. If your tenant is on a low income or experiencing hardship, they may qualify for a council tax reduction of up to 100 per cent. Each local authority has different eligibility criteria, but it’s straightforward to apply online. And if your tenant is living alone, make sure they’re already taking advantage of the standard 25 per cent discount . More information on council tax can be found on Which.co.uk
- Household Support Fund. Every local authority UK-wide has access to this fund, to help households struggling to afford food and utility bills on a discretionary basis. In the Chancellor’s Spring Statement this year, he announced that the fund had been doubled and will be available until the end of September 2022
- Discretionary housing payments. This is financial support for people who receive housing benefit or the housing element of Universal Credit, which can cover rent shortfalls, removal costs for moving home and rent deposits. There are two separate schemes, one for England and Wales and another for Scotland
So, if you do become aware that your tenant is struggling to pay their rent and bills, make sure they know that help is available.
Advise them to speak to the local council housing department or Citizens Advice to make sure they’re getting all the financial support they’re entitled to.
