Ofgem Proposes Landlord Liability for Tenant Energy Debts
Landlords could become legally responsible for their tenants' unpaid gas and electricity bills under new proposals from energy regulator Ofgem, published to coincide with the Budget on Wednesday. The move is designed to close a loophole that allows people to move home without settling their energy debts, leaving suppliers and ultimately other consumers to foot the bill.
Under the plans, landlords would be required to provide timely and accurate information to energy suppliers when tenants move into or out of a property. If neither the tenant nor the landlord supplies the necessary details, the landlord may become liable for the energy charges associated with the property. The consultation states that the reform would place similar obligations on landlords as already exist for water bills in England and Wales.
Government to Legislate on Home Moves
The proposals are part of a broader government and Ofgem strategy to tackle what regulators describe as an escalating crisis in domestic energy debt. Ofgem's consultation explains that the government will introduce legislation to Parliament to reform the home moves process, creating a new obligation on landlords to inform suppliers of tenant changes. The measure is intended to ensure energy companies can target individuals directly with bills rather than chasing debts that become untraceable when tenants disappear.
Scale of the Problem: £6bn in Debt and Rising
The proposals follow research showing that up to 40 percent of the estimated £6 billion in domestic energy debt has been accrued by defaulting tenants who skip between properties, leaving unpaid bills behind. Ofgem has warned that total debt could rise to £11 billion in the coming years if left unchecked.
The problem has been exacerbated by successive energy crises. In 2020, before the conflicts in Ukraine and the Middle East, domestic energy debts totalled about £1 billion. The subsequent surge in wholesale prices hit household budgets hard, leaving many unable to pay. This prompted energy suppliers to accelerate the installation of prepayment meters, with nearly 100,000 homes forcibly switched under court warrants, while many others had smart meters remotely set to prepay mode. In 2023, charities such as Citizens Advice reported record-breaking numbers of consumers who were "self-disconnecting" – left without heat or electricity in the depths of winter because they could not afford to top up their meters.
Debt Relief Scheme to Wipe Clean Crisis-Era Arrears
The home moves reform is being rolled out alongside a separate Debt Relief Scheme announced jointly by the government and Ofgem. The targeted scheme aims to address £2.47 billion in crisis-era arrears accumulated between 2022 and 2024, with up to 2.4 million eligible consumers, including pensioners and those on means-tested or disability benefits. To receive debt relief, customers must collaborate with energy suppliers on agreements to manage future bills and prevent further arrears. Government analysis suggests the strategy could save a typical household around £130 over 10 years and prevent over £5 billion of new debt by 2036. Ofgem will launch a formal consultation on the updated plans shortly, ahead of the scheme's anticipated rollout in the spring.
Ofgem chief executive Tim Jarvis said: "Too many households are still weighed down by debt built up during the energy crisis. Our targeted debt relief scheme will help people get back on top of their finances and make a fresh start, and we welcome the government's support to make this happen. But this is about much more than tackling historical debt. These steps balance customer rights with their responsibility to pay, empowering them to manage and keep track of their energy bills to prevent debt building up in the first place."
Property Industry Pushes Back
The proposals have sparked an immediate backlash from the property industry. Timothy Douglas, head of policy at Propertymark, the professional body for estate agents, said: "There is a need to prevent energy debt accumulating when tenants move in or out ... But we do not agree with the proposal that landlords may become liable for energy charges when it is tenants that have used and accumulated the debt."
The concern is that landlords, who have no control over their tenants' energy usage, could be forced to foot the bill for unpaid consumption. The consultation acknowledges that the reform would place similar obligations on landlords as exist for water bills, but critics argue that energy is a different case because usage can vary dramatically and is entirely within the tenant's control.
Budget Day Announcements Add to Energy Market Overhaul
The Ofgem consultation was published on the same day as Chancellor John Healey's Budget, which included further energy market interventions. Healey announced that standing charges on gas bills will be scrapped from next year, a move that will affect around 23 million homes. The fixed daily fee, which costs a typical household around £108 per year, will be removed "in 2027 or as soon as possible after," with fixed costs instead paid on the unit rate. The Treasury said this could save 60 percent of households an average of £45 on their annual bills.
Prime Minister Andy Burnham said: "Abolishing gas standing charges is about basic fairness and giving people more control over their bills. I am determined to reform our broken energy market, so it better serves the public interest." Healey added: "Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space. My Budget will draw a line in the sand on an energy policy that has failed British billpayers for years, letting extra costs on bills pile high and leaving households even more exposed to global shocks."
MoneySavingExpert founder Martin Lewis, who was in No 11 on the morning of the Budget, said he was "pleased" with the move and that Healey told him he would seek to remove standing charges on electricity bills too. Lewis predicted the gas bills policy would be implemented at the same time as either the October 1 2027 or January 1 2028 price cap change, and that the cost shift onto unit rates would translate to "just under 1p per kWh".
Broader Implications: A Test of Landlord-Tenant Responsibilities
The proposals represent a significant shift in the balance of responsibility for energy debts between landlords, tenants, and suppliers. They also form part of a wider government effort to stabilise the energy market and protect vulnerable consumers. The Debt Relief Scheme and the review of involuntary prepayment meter rules are intended to ensure that suppliers can tackle rising debt while protecting those in genuine hardship.
Government analysis suggests that preventing debt from being added to all consumers' bills could save a typical household around £130 over the next decade. The strategy also aims to prevent the accumulation of more than £5 billion of new debt by 2036. However, the success of the home moves reform will depend on both landlord compliance and the ability of suppliers to accurately track tenancies. The consultation period will allow stakeholders to respond to the proposals, and the government will then bring forward legislation.
As energy debts continue to climb, the outcome of this consultation will be closely watched by landlords, tenants, and consumer groups alike. The measures signal a determined effort to break the cycle of debt that has trapped millions of households since the energy crisis began, but they also raise questions about where the burden of unpaid bills should ultimately fall.
For struggling households, the Debt Relief Scheme offers a lifeline, while the home moves reform aims to prevent future debt from accumulating. The coming months will reveal whether these twin strategies can deliver the "breathing space" the government promises.
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