Energy Price Cap July 2026: What the 13% Rise Costs Landlords During Void Periods

Ofgem put the energy price cap up 13% on 1 July, and landlords are exposed to it in ways that have nothing to do with whether tenants pay their own bills.

The cap for a typical Direct Debit household rose from £1,641 a year to £1,862 a year, covering the period to 30 September 2026. If every one of your tenants pays their own gas and electricity and you never have a void, this is someone else's problem. Most landlords are not in that position all the time. Void periods, bills-inclusive lets, and serviced accommodation all put some or all of that rise straight onto your side of the ledger.

Here is what the rise actually means in pounds, not just percentages, and what you can do about it.

What Actually Changed

The price cap is not a bill. It is a ceiling on the unit rate and standing charge that suppliers can charge on standard variable (default) tariffs. From 1 July, a typical Direct Debit customer using both fuels pays on average 26.11p per kWh for electricity with a standing charge of 57.19p a day, and 7.33p per kWh for gas with a standing charge of 29.04p a day. Those rates, applied to Ofgem's assumed typical household consumption, produce the £1,862 headline figure.

Ofgem is calling the rise from £1,641 just over 13%. It is the third cap change this year, and it takes the cap above where 2026 started, more than reversing the fall seen between January and April. Ofgem also updated the typical consumption values it uses to calculate the headline figure, reflecting that households now use somewhat less gas and electricity than a few years ago. That is a separate technical adjustment to the methodology, not the reason for the rise. Higher wholesale and network costs feeding through into the unit rates and standing charges above are what is actually driving the 13% jump.

The Void Period Cost Landlords Often Miss

An empty property is not a zero-cost property. Unless you have physically disconnected the supply, the meter keeps running and the standing charge keeps accruing every single day, whether anyone is living there or not.

Do the maths on standing charges alone: 57.19p a day for electricity plus 29.04p a day for gas comes to 86.23p a day, or £314.74 over a full year. Spread over a month that is roughly £26. That is the floor. It assumes literally nothing else is drawing power. In practice a void property usually has something running, an intruder alarm, a boiler on frost protection through the colder months, a smart meter reporting back, or a fridge nobody unplugged, so real costs typically sit a little above that floor.

For a landlord with a one-month void on a property that would otherwise let for £1,200, the energy cost is a rounding error next to the lost rent. But it adds up across a portfolio, and it is higher than it was in the spring simply because the cap has gone up 13% since the property last sat empty.

Bills-Inclusive Tenancies Absorb the Full Rise

If you let on a bills-inclusive basis, whether that is a whole property or an HMO with an all-in room rate, you are now carrying 13% more energy cost than you were on 30 June, with no automatic mechanism to pass any of it on.

Since 1 May 2026, rent review clauses in tenancy agreements no longer work. Section 13 of the Renters' Rights Act, served through Form 4A, is the only lawful way to increase rent. The rules are unchanged by the energy cap rise:

• Minimum two months' notice
• Maximum one increase every 12 months
• The tenant can challenge the proposed figure at tribunal for a £47 fee
• The tribunal cannot set the rent any higher than the figure you proposed, only the same or lower

That last point matters for bills-inclusive landlords specifically. If your all-in rent already sat close to the local market rate before the cap rise, pushing it up purely to cover the extra energy cost risks a challenge you cannot win outright. Before serving a Form 4A, work out whether the increase you need still leaves you at or below what a similar unfurnished, bills-excluded let would command locally. If it does not, a tribunal is unlikely to uphold the full increase.

The alternative, reviewed at the next natural break point such as a renewal, is to move away from bills-inclusive altogether and let the tenant contract directly with the supplier. That removes your exposure to future cap changes entirely, though it is a bigger conversation to have with an existing tenant than a routine rent review.

Why June's Inflation Data Does Not Change Much Yet

June CPI, published by the ONS on 22 July, actually eased to 2.6% from 2.8% in May, a downside surprise against a consensus closer to 2.7%. The fall was driven mainly by cheaper motor fuel, with diesel and petrol prices both down on the month.

The July energy cap rise is not in that number. It happened on the first day of July, so its effect shows up in July's CPI, which the ONS publishes in August, not in June's data released this week. For landlords watching the Bank of England's 30 July decision, that means the softer June print is the more relevant near-term signal, and it leans dovish rather than adding urgency to a hike.

As of 20 July, markets were pricing the Bank holding rates at 3.75% on 30 July with around an 86% probability, with hike risk at roughly 7%. That is not a settled outcome and the Monetary Policy Committee's two hawkish dissenters from the June meeting have not gone away, but the balance of evidence going into the decision points to continuity rather than a shock. If you are due to remortgage in the next few months, that is a reason for cautious relief rather than complacency, particularly if you have not locked a rate yet.

What To Do About It

The energy cap rise on its own will not break a well-run buy-to-let. But it is one more input squeezing cashflow at a time when Section 24 tax treatment, void risk, and mortgage repricing are all already in the mix. A few practical steps:

• If you have a bills-inclusive let, check your all-in rent against the local unfurnished market rate before deciding whether a Section 13 increase is workable.
• If a property is between tenants, keep the standing-charge cost in your void budget rather than assuming an empty property costs nothing.
• If you are remortgaging in H2 2026, model your numbers at both today's rates and a modestly higher rate, given hike risk on 30 July has not disappeared entirely.
• Run the full picture, rent, void costs, energy exposure, and finance costs together, rather than looking at any one line in isolation.

None of these steps require you to overreact to a single price cap update. The point is that a 13% rise, like the last three cap changes before it, is now part of the baseline you should be planning around rather than treating as a one-off shock each time it happens.

This article is for informational purposes only and does not constitute financial or investment advice. Tax rules and legislation change frequently. Always verify current rates with HMRC or GOV.UK and seek independent professional advice before making investment decisions.