Energy Crisis

A global surge in demand for gas after a cold winter leaves gas storage depleted, countries are scrambling to replenish stock before the return of colder temperatures resulting in a rising of market prices. With 50% of UK’s electricity coming from gas-fired power plants and fire forcing the closure of important power cables importing electricity from France, there is a large cause of concern of a wide effect on the UK.

The gas shortage is likely to hit the factories and steelmakers, the food industry will be missing key products created with gas and of course for the general public it is predicted by Ofgem that energy tariffs will climb 12.5% on average. A 250% wholesale gas price surge since the start of 2021 is the climb that has most worried with 70% of that increase coming in August alone. 

This will raise the monthly living costs of everyone, and in some instances leave homes without services. Barina Partners have stated that by the end of the winter there may be only 10 suppliers of energy left due to small operators being forced to close, this is 10 left from 70 suppliers who were active at the start of 2021!

Ministers are still holding talks and crisis meetings to discuss how the government can help in the situation. The UK does have an energy price cap in place to protect households but with the widespread issues unfolding from the shortage it is likely that will not be enough.

Rising expenses will fall on someone's shoulders, which for landlords with HMO's and utility included lettings currently rests with them. A challenge ahead is the responsible consumption of energy through the upcoming winter, where tenants who are not responsible for the bills may not see the need to wear an extra layer instead of turning up the heat.