Last month, tenants’ gas and electricity bills peaked at the highest level for seven years. The end of March marked the first time since Q1 2017 that the average annual energy bill was equivalent to paying an additional month of rent each year, according to new research from Hamptons. However, the firm adds that this is likely to mark a recent peak, with a fall in the energy price cap from 1 April 2024 set to reduce average bills by 12%, followed by further falls pencilled in from June.

During the 12 months to Q1 2024, average annual gas and electricity bills amounted to £1,331 for the typical rental home, a figure that stands £1 higher than the average monthly rent in Great Britain of £1,330.

Seven years ago, the average rent stood at £953pm and annual gas and electricity bills at £998. Between then and Q1 2022, while rents continued to rise, - energy bills fell in cash terms until wholesale prices spiked in early 2022. Consequently, in Q1 2022, annual energy bills made up just 65% of the average monthly rent, before rising to 88% in Q1 2023 and 100% in Q1 2024 when energy prices peaked.

Over the last decade (Q1 2015 - Q1 2024), rents have risen by a total of 54% and energy bills by 46%. Almost all this rise in gas and electricity bills has come during the last two years. Until then, energy bills had mostly been falling in both cash and real terms. This means that in total, tenants are paying an extra £5,993 each year in rent and energy bills than they were 10 years ago.

Falling energy costs to offset rises in rent
However, if energy consultants Cornwall Insight’s expectations are correct, energy bills are set to fall 17.4% over the next 12 months. This would mean that between Q1 2014 and Q1 2025, they will have risen by a total of just 24%.