One in 10 tenants barred from changing energy supplier

Research from uSwitch shows that landlords and letting agents are illegally stopping 10% of tenants switching utility provider

Some landlords and lettings agents are breaching the law by issuing contracts preventing tenants from switching energy supplier to get a cheaper deal.

Research by comparison website uSwitch.com showed that 3% of people who rent privately have been unable to switch gas or electricity provider because their contract won’t allow it, while 7% have been told by their landlord that they cannot switch.

A rental contract is allowed to stipulate that tenants ask a landlord before switching energy supplier, but it cannot refuse permission to switch altogether.

The Office of Fair Trading states: “The tenant should have the choice of supplier, although he may be required to keep the landlord informed of any change and to return the account to the original supplier at the end of the tenancy.” It adds that landlord’s consent cannot be “unreasonably withheld or delayed”.

The uSwitch figures suggest as many as one in 10 landlords may be in breach of the law. A large number of tenants also appear to be unaware of their rights. Fewer than a third of private renters (31%) were aware they could switch energy suppliers, subject to their rental contract, while 28% think being a tenant makes it more difficult for them to switch.

Some lettings agents appear to have struck deals with utilities companies that see the latter pay commission if tenants use their services.

A website run by a property management company in Hull has a list of potential questions tenants might ask, including “Can I choose my own utility provider?”. It answers: “We are working closely with a company called Utility Warehouse to ensure our tenants receive the best service and market prices for their utilities and to enable all our properties to be with one provider. As part of your agreement we ask you to join the Utility Warehouse Club. The cost for this service is £1.76 per month, however, the benefits received compensate for this minimal fee.”

Landlords can, however, add specific requirements into an assured shorthold tenancy (AST) contract concerning changing utility providers, especially where switching supplier could result in alterations to the property, said Chris Norris, head of policy at the National Landlords Association.

“For example, if tenants are installing new meters or phone cables, damage could occur to the property. It is wise to ask the landlord before any work is carried out,” he said. “If an energy supplier needs to install a pre-paid box to the property, it’s also important the landlord is aware.”

Tenants who do want to switch should look out for early exit fees on energy tariffs, uSwitch said, especially where the tenancy is for a period of less than a year.

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