NHF warns that 400,000 households are unprotected by energy price cap
There are 400,000 households in England unprotected by the energy price cap because their energy is supplied through a communal heating system, the National Housing Federation (NHF) has warned.
The organisation, which represents housing associations in England, said those households face a potential bill increase of £68 per week, £1,130 per year over October’s energy price cap.
It has called on the government to act urgently to ensure people on heat networks receive the same protection as customers on domestic energy supplies.
Communal heating systems supply heat to multiple homes from a central energy source, removing the need for individual boilers within homes.
Heat networks are becoming an increasingly common form of heating within urban areas, particularly for blocks of flats, and form a key part of the government’s strategy to hit net zero by 2050.
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Residents pay for their heating bills via service charges. In usual times, heat networks save residents money as social landlords can secure cheaper prices than individuals on domestic contracts by bulk buying energy.
Heat networks are not regulated by Ofgem, which sets the domestic gas and electricity price cap.
Without the domestic cap, the price households on heat networks will pay for energy will depend on the commercial contract their housing provider negotiates with the energy company.
But amid the energy crisis, recent contracts are as much as 500% more expensive than the previous year, the NHF said.
Over half of households on heat networks – 227,848 – are living in social housing and on low incomes, while nearly three-quarters are older than 55.
The NHF said that many housing associations are actively looking at whether they can cover some of the cost from other funds, rather than pass on the full increases to residents. But it said this would mean landlords having to cut back on other services for residents or reducing investment in their homes.
The NHF said the government must either allow heat network operators to purchase energy at the capped domestic tariff rates and pass on the savings to residents, or provide affected households with extra payments to compensate for price increases above the cap.
Kate Henderson, chief executive of the NHF, said: “It is unjust that hundreds of thousands of people, through no fault of their own, are exposed to uncapped heating bills just because of the way they pay for their energy.
“Worst still, the majority of those affected are vulnerable people on the lowest incomes in this country, who will already be struggling to pay for food and essentials.”
She added that the government has a “duty to act urgently and fairly to protect these people in the same way as the rest of the country”.
A BEIS spokesperson said: “We know people are worried about rising energy bills, which is why we have confirmed that further funding, equivalent to the £400 Energy Bills Support Scheme, will be available for those using heat networks and are giving Ofgem new powers to regulate prices in this sector.
“We are also providing a £37 billion package to help families with their energy bills, including eight million vulnerable households seeing £1,200 in extra support.”
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