A new review of water charges by the government means that landlords could be made liable for tenants who do not pay their water bills.
Landlords have described this new proposal as alarming, and stated that it would surely force up the price of rent.
Water companies have recently reported falling profits and rises in debts. Northumbrian Water recently reported a 10.3% fall in profits before tax, taking it to £152.7 million up to March.
The managing director of the company, John Cuthbert, stated that the company had made provisions for bad debt raising it from £2 million to £30 million. He also stated that water companies were vulnerable to debt from domestic users due to the fact that they are not allowed to disconnect the supply if payment has not been made. Therefore, water bills are often the last ones that get paid.
In the case of tenants who owe outstanding debt, water companies often find that they have moved by the time they try to recover it. This is where the proposal comes in to make landlords liable for payments.
Recent research performed for TDX group, who provide debt liquidation services to creditors, shows that up to 5% of all households could default on their water payments this year, adding another £350 million of debt to the companies.
The proposals, drawn up by Ofwat, that would make landlords responsible for water bills would mean that property owners would have to provide a name for the person liable to pay bills. This would give landlords a reason to provide details of their tenants, at risk of having to pay bills themselves.
