Energy costs are the biggest concern for UK renters
Nearly 80% of renters in the UK are either Concerned (33.27%) or Strongly concerned (46.65%) about their energy costs. Tenants' concerns over energy costs outweigh fears over food costs, rent increases and the UK economic outlook.
Our new survey of 1,001 UK renters has discovered energy costs are currently the most significant cause for concern for tenants, whilst food and fuel costs, rent increases, interest rates, and the economic outlook in the UK are among other concerns felt by UK renters.
Tenants may take some comfort that to address the rising costs and concerns of tenants, 48.05% of landlords intend to complete energy-performance improvements to their properties over the next 12 months.
With energy prices increasing, the UK Renters’ Report 2023 discovered 31.57% of renters felt EPC ratings were important when they chose their current rental property. Additionally, 28.57% felt the rating was Extremely important or Very important. Perhaps surprisingly, 39.86% felt the EPC rating was only Somewhat important (20.38%) or even Not important at all (19.48%). However, of those respondents that didn’t feel EPC was important, most had lived in their rental properties for 5+ years. Hence, it’s perhaps understandable that EPC ratings weren’t important for them then.
As Stephen Clark, from Finbri, says, "Renters are now taking energy efficiency into account when looking for a rental property, and it’s no wonder why - energy costs are rising and can make up a significant portion of a tenant’s monthly outgoings. It’s important for landlords and letting agents to ensure that their properties are as energy efficient as possible, not just to attract tenants and address their concerns, but also make their properties more attractive to potential buyers in the future.”
A growing number of concerns faced by renters
In addition to energy costs, UK renters are facing other concerns right now:
Food costs (78.62%)
In the year leading up to January 2023, the annual inflation rate for food products was 17.1%. The survey has revealed that renters are growing concerned about how this will impact their budgets and affordability.
Rent increases (73.93%)
According to new data from SpareRoom, rentals reached a record high in the fourth quarter of 2022, with the average UK room rent rising 13% yearly. The survey revealed that renters are concerned about how this will impact their budgets. With the base rate expected to reach a high of 4.5% in 2023, 52.75% of UK landlords will look to raise rents to cover additional expenses.
UK economic outlook (72.53%)
With a recession looming and inflation expected to peak at 17% in 2023, 72.53% of renters are concerned about the overall economic outlook in the UK.
Are energy prices forecasted to change in 2023?
The typical household bill is expected to increase from £2,100 to £3,000 in April. With the Energy Price Guarantee (EPG), and the expiration of a £400 discount on all bills - it's no surprise that bills are expected to increase.
The UK energy market is also transforming, with the number of renewable energy sources used to generate electricity increasing. This, coupled with the Government's proposed ban on carbon-emitting electricity generation technologies, is expected to significantly impact energy prices in the future with prices becoming more affordable.
This means that the average household can expect to pay more in 2023 compared to 2021, although the total cost is still likely to be below the Government's Price Guarantee.
How important do landlords think EPC ratings are to tenants?
Landlords are seemingly on the same page as tenants regarding the importance of EPC ratings and energy costs, even if they don’t quite realise the levels of concern for their tenants. 47.95% of landlords think EPC ratings are Extremely important (20.88%) or Very important (27.07%) to their tenants. Just 17.08% only think energy-performance ratings are Somewhat important, whilst 12.39% said they were Not important at all to their tenants.
Energy costs are a significant concern for UK renters. Renters are increasingly worried about energy costs and are looking for more energy-efficient properties. Landlords should take note of this to attract and retain tenants. EPC ratings are also becoming increasingly important, with landlords and tenants considering them highly important when selecting a property.