The First Decision: Who Pays the Energy Bills?

Before anything else, landlords must decide how energy billing is structured for their property. This decision shapes every subsequent question about switching, compliance, and cost management. There are three models available.

Model 1  Tenant responsible: The tenancy agreement specifies that the tenant is responsible for energy bills. The tenant sets up accounts in their own name, chooses their own supplier, and pays bills directly.

You, as landlord, have no control over which supplier is used but also carry no energy cost risk. The tenant has the legal right to switch supplier during their tenancy. You should state this explicitly in the tenancy agreement and confirm they have transferred the accounts into their name at the start of each tenancy.

Model 2 Landlord responsible: You hold the energy account and pay the bills, recovering the cost either through a higher rent or by billing tenants separately for their usage.

This gives you full control over supplier choice and the ability to switch when better rates are available. It also creates obligations, particularly for HMOs, around how you charge tenants for energy. Under Ofgem’s resale rules, if you resell energy to tenants, you cannot charge more than the unit rate you pay your supplier.

Model 3 Bills included in rent: Common in HMOs, student accommodation and serviced properties. You hold the account, pay all energy costs, and build an energy allowance into the rent.

This simplifies administration for tenants but requires careful calculation to ensure the allowance covers costs without creating losses, particularly relevant given the July 2026 price cap rise of 13%.

Standard Rental Properties: What Landlords Need to Know

For single-let residential properties on standard assured shorthold tenancies, the energy situation is relatively straightforward. Here is what applies.

When a tenant moves in:

At the start of each new tenancy, you should provide the incoming tenant with the current meter readings and the name of the existing energy supplier. The tenant then contacts the supplier to transfer the account into their name.

If the tenant wishes to switch supplier once the account is in their name, they are legally entitled to do so and do not need your permission, though they should inform you.

When a property is void (empty between tenancies):

During any void period, the time between tenants leaving and new tenants moving in, the energy account responsibility reverts to you as the landlord. You are responsible for any energy consumed (heating to prevent pipe damage, security lighting, etc.) and for any standing charges.

If the previous tenant cancelled their account, you may be placed on a deemed rate by the supplier, the most expensive rate available, typically 40-60% above competitive fixed rates.

During void periods you should:

When a tenant leaves:

Confirm the account has been transferred out of the outgoing tenant’s name before they leave. Request a final meter reading on the day of departure. This prevents disputes over outstanding balances and ensures the void period is managed from day one.

HMO Properties: Special Considerations for 2026

Houses in Multiple Occupation present a significantly more complex energy management challenge than standard lets. With multiple occupants, shared facilities, communal areas and often separate room-by-room tenancy agreements, energy billing, compliance and switching all require additional attention.

Who Pays Energy Bills in an HMO?

In most HMO operations, the landlord holds the energy account and includes energy costs in the rent. This is the most practical approach because:

The most common approach is to include a fair-use energy allowance in the monthly rent, typically calculated as the property’s annual energy cost divided by 12, divided by the number of rooms, with a small buffer for price increases built in.

HMO Energy Allowance Calculation: 2026 Example

A 5-bedroom HMO in Derby using 18,000 kWh electricity and 22,000 kWh gas per year:

Based on competitive fixed contract rates August 2026. Actual costs depend on contract, location and consumption.

A 10% buffer above actual cost is reasonable given the July 2026 price cap rise of 13% and anticipated continued market volatility. If your contract renews at a higher rate mid-tenancy, having a buffer prevents the energy allowance running into deficit.

HMO EPC Requirements: Significant Changes in 2026

This is the area where HMO landlords face the most significant regulatory change in 2026. The rules are evolving and understanding them now is critical.

Current position (August 2026):

The Government has proposed making EPCs a legal requirement for HMOs. These reforms will likely come into force in late 2026. NRLA

Under current rules, where individual bedrooms are rented separately, and occupants share facilities such as a kitchen or bathroom, an EPC has generally not been triggered simply by letting one of those rooms.

However, the Government has confirmed that it intends to amend the Energy Performance of Buildings regime so that a valid EPC will be required for an entire HMO when a single room is rented out. Fast-epc

What this means in practice:

A five-bedroom HMO let on five separate agreements will require the same compliance paperwork as one let to a group on a single tenancy. Landlords who have built portfolios around room-by-room models in university towns or city centres will need to review every property and budget accordingly. Hmosales

The 2030 deadline, what every landlord must plan for:

From 1 October 2030, every privately rented property, new tenancy or existing, must meet the equivalent of EPC Band C under the updated framework. Hmosales

The Government has committed to look at a long-term trajectory to improve energy performance standards of privately rented homes in England and Wales, with the aim for as many of them as possible to be upgraded to EPC Band C or equivalent by 2030. GOV.UK

EPC improvement costs, what to budget:

Estimates based on typical terraced property. Actual costs depend on property type, size and existing measures.

Government grant support is available through the Great British Insulation Scheme and the ECO4 scheme for properties and landlords meeting eligibility criteria. These can significantly reduce the cost of compliance upgrades.

How to Switch Energy Supplier as a Landlord

Whether you manage a standard rental or an HMO portfolio, switching supplier follows the same fundamental process, with some landlord-specific considerations.

Step by Step: Switching Landlord Energy

When Can You Switch?

If your property is between tenants and on a deemed rate, switch immediately. Out-of-contract rates for landlord-held accounts can be 40-60% above the best available fixed rates.

Every month on a deemed rate during a void period costs significantly more than it needs to. Our guide to out-of-contract business energy rates explains the process.

VAT on Energy for Landlords: 5% Not 20%

This is one of the most consistently missed entitlements in the landlord energy market.

No. Under Ofgem resale rules, if you resell energy to tenants (i.e. you hold the account and charge them separately), you cannot charge more than the unit rate you pay. AgentHMO

But beyond the resale rules, the VAT rate you pay on that energy matters significantly.

If you hold the energy account for a residential rental property or HMO and have been paying 20% VAT, you are likely paying the wrong rate. Contact your supplier, request the VAT declaration form, complete the statutory declaration confirming residential use, and the 5% rate will apply from the date of submission.

You can also claim back up to 4 years of overpaid VAT. For a landlord paying £6,000 per year in energy bills at 20% VAT when 5% should apply, the overpayment is approximately £833 per year, £3,332 over 4 years, recoverable as a credit or refund from your supplier.

Managing Energy Across a Property Portfolio

For landlords managing multiple properties, energy procurement is a more complex task but also a greater opportunity for cost savings.

Portfolio Energy: the Options

For landlords with a mix of residential and commercial properties, commercial energy procurement through a specialist broker who understands both sectors is significantly more efficient than using separate domestic and commercial arrangements.

Our work with Popovic Properties, a 25-site mixed commercial and residential portfolio, consolidated utility management, aligned renewal dates across all sites, identified billing errors in multiple properties, and delivered £25,000 in annual savings. The same approach applies to residential portfolios of any size.

Aligning Contract Renewal Dates

One of the most practical time-saving improvements for portfolio landlords is aligning energy contract renewal dates. When contracts across a portfolio expire at different times, the renewal management process is continuous and easy to miss.

Kilowatt Energy manages the entire renewal process for portfolio landlords, tracking every contract end date, making contact 90 days before each renewal, and consolidating where possible to reduce the administrative burden.

Energy Efficiency Improvements: What Landlords Can Do in 2026

With the 2030 EPC Band C deadline now four years away, the window for planning and executing energy efficiency improvements is narrowing. For HMO landlords facing the imminent room-by-room EPC obligation, the urgency is greater still.

EPC point improvements are estimates and depend on property type, size, current rating and assessment method. The EPC assessment methodology changed on 15 June 2025 and now requires evidence for measures previously assessed on assumption.

For most HMO landlords with Band D or E properties, the combination of loft insulation, cavity wall insulation, LED lighting and smart heating controls is the most cost-effective route to Band C, often achievable within £2,000-£3,000 before grant support.

Common Mistakes Landlords Make With Energy

FAQs: Switching Energy Supplier as a Landlord UK 2026

Q: Can I switch energy supplier on a property where the tenant pays the bills?
No. If the tenancy agreement makes the tenant responsible for energy bills, the account is in their name and they have the right to choose their own supplier. You cannot switch on their behalf. However, you can switch supplier yourself during void periods when the property is between tenants and the account reverts to you.

Q: What happens to energy accounts when a tenant moves out?
When a tenant vacates, their energy account responsibility ends. If they close their account, the property may be placed on a deemed or out-of-contract rate by the supplier — the most expensive rate available. Contact the supplier immediately when a tenant vacates, take meter readings on the day, and set up an account in your own name for the void period. Do not let the supply drift onto a deemed rate.

Q: Do HMO landlords need to pay 5% or 20% VAT on energy?
Most HMO landlords qualify for the reduced 5% VAT rate on energy because the property is used for residential purposes. If you have been paying 20% VAT, contact your supplier, complete a VAT declaration confirming residential use, and apply for a refund covering up to 4 years of overpaid VAT.

Q: Can I charge my HMO tenants more than I pay for energy?
No. Ofgem’s resale rules prohibit landlords from charging tenants more than the unit rate they pay their supplier for energy. If you hold the account and pass costs to tenants, your maximum charge per unit is the rate on your own bill. Most HMO landlords avoid this complexity by including an energy allowance within the rent rather than billing separately.

Q: What are the EPC requirements for HMOs in 2026?
The current minimum EPC rating for rented properties is Band E. For whole-house HMOs let on a single tenancy, one EPC covers the property. For room-by-room HMOs, the Government has confirmed it intends to require an EPC for the whole property when any single room is let, with reforms expected to come into force in late 2026. The deadline for all private rented properties to reach EPC Band C is 1 October 2030. HMO landlords with room-by-room portfolios should begin planning compliance upgrades now.

Q: How do I manage energy for a large residential portfolio?
The most efficient approach for portfolios of 5 or more properties is consolidated procurement through an energy broker, aggregating all meters, going to market as a single package, and aligning renewal dates. This reduces administrative burden, secures better rates than property-by-property renewal, and gives you a single point of contact for all energy management. Kilowatt Energy manages portfolios of any size; contact us for a free portfolio energy review.

Q: What should I include in my tenancy agreement regarding energy?
Your tenancy agreement should clearly state who is responsible for energy bills, whether tenants have the right to switch supplier (they do if responsible for bills), how meter readings will be recorded at start and end of tenancy, and for HMOs the terms of any energy allowance included in the rent. We recommend stating that the tenant is responsible for transferring accounts into their own name within 48 hours of moving in.