Electric sub meters are popular in HMO buildings as a way to accurately track individual energy usage and allocate costs fairly. However, while these landlord meters can bring many benefits, they can also pose challenges for owners and tenants alike.
This is the 7th part of a series of articles where we continue to explore the experiences of Jim Haliburton, known as HMO Daddy, who installed Metro Prepaid electric sub meters in his properties, sharing insights and lessons learned along the way. He is an experienced landlord with over 100 HMOs and 1000 tenants.
These questions and answers are taken from his booklet called HMO PREPAY METERS: Everything You Want and Need To Know About Fitting Prepay Meters in HMOs.
What energy efficiency measures do you recommend for HMO Landlords?
Other than fitting electric sub meters, none! Energy efficiency is a con!
I feel like I am the soldier marching correctly and everyone else is out of step over this. Energy efficiency measures, in my experience, does nothing to save anything in the cost of heating a HMO property where the landlord provides 24/7 central heating. I pay for the heating in the 140 HMOs I operate and I am perhaps in position that most landlord are not, in that I measure the energy usage so I can compare the results over a large number of properties. I find the energy efficiency measures I have had installed have had no bearing on the cost of heating nor does the age of the building make any difference. I have tried roof and wall installation, double glazing, energy efficient boilers and energy efficient lighting.
I should add that I provide 24/7 central heating in most of my HMOs. Yes, you will save heating costs by switching off the heating when it is not needed. A long time ago I had a system in my HMOs where the heating was only on for eight hours a day and the saving was about a third over having the heating on 24/7, a significant saving but not proportionate to the time the heating is used. If the cost of heating was proportionate I would have saved two thirds of the cost.
Before the rise in energy costs, gas heating cost on average £1,600 pa for an HMO of up to eight rooms. This means I would save about £500 pa or £10 pw by limiting the heating to eight hours a day. However, some tenants will object and its likely some will leave. I find tenants demand 24/7 heating and so do some housing officers. Keep switching the heating on and off does not save that much. The reason is that it probably costs a lot to heat the property back up. Compare a saving of £10pw to tenant dissatisfaction and losing tenants, it is not I believe worth the saving.
There are systems that can switch radiators off when the room is not in use or when the window is opened but as heating cost is not proportionate to the time the heating is on, I doubt these systems will save very much compared to their cost. The same goes for systems which switch off the heating if the property is empty, unless the property is empty for hours.
When it comes to switching heating on and off I believe, but I have not done any research on this, it is only observation, that the type of house is significant. A new well insulated house will heat up very quickly and also lose heat very quickly if a door of window is open. In a new house, I have not tried it, but I believe significant saving can be achieved by switching off if the property is empty for more than, and I am only guessing, an hour. With old solid brick houses they take hours to cool down and to heat up so there is no point switching off the heating unless the house is going to be empty for and again, I am guessing, 6 hours and you need to allow a few hours for the heating to warm the house up.
I believe Landlord Associations should research this and if my findings are the same then the associations should be screaming from the rooftops that carrying out energy efficiency measures will not save energy costs. It is wasting landlord’s money. This con needs to be exposed.
4 Ways HMOs can Save Money in Heating Costs
There are four things, apart from limiting the time the heating is on, that I find will save money in heating and they are:
- The cheapest and easiest is to shop around for the cheapest utility supplier. This can reduce your energy bills by up to 50%.
- Fit prepay electric sub meters to each room. This means the tenants pay directly for the electric they use in their room. My experience is that the amount of electric used drops by nearly 50% when tenants have to pay for their electric. On average saving £400 pa on a HMO with up to 8 rooms. (This figure is pre the enormous rise in energy). Also, you can recover some or even all of the cost of 22 the electric supplied by charging the tenants for the electric.
- Do NOT fit gas or pay for central heating. This saves the cost of heating the property, around about £1,600 pa and with the enormous increase in utility prices possibly a lot more for up to an 8 room HMO. However, doing this is fraught with difficulties. For example: the property will probably fail an EPC if it has not got central heating fitted (oddly, if central heating is fitted it does not have to be used) and be cold and damp, unappealing for tenants and cause tenants to leave.
- Fit undersized gas boilers to the property. This will only work in a large HMO or if you can link two or more HMOs together on one boiler. Providing there is a thermostat fitted the small boiler will use less gas than a larger capacity boiler so save cost.
I would love to be proved wrong over my views on energy consumption as I desperately would love to save cost on utilities. Unfortunately, everything I have tried apart from 1 to 4 above has not worked or been viable in practice.
Jim Haliburton has written a book on fitting prepay meters in HMOs entitled, “Everything you Need to Know About Fitting Prepay Meters in HMOs”. It can be obtained as a free download or as a paid for book only at www.hmodaddy.com.
Jim Haliburton, known as HMO Daddy, is not an electrician, energy conservation expert, lawyer or financial advisor, nor does the following represent legal, financial or any other advice. If such advice is needed, then the reader should seek professional guidance from a qualified expert with appropriate public liability insurance. The following information is given to the best of Jim Haliburton’s knowledge and is provided for educational purposes only. It is the reader’s responsibility to obtain their own professional advice.