THE PROPERTY FILTER TAKE
Ofgem's energy price cap rises 4% on 1 October, taking the typical annual dual-fuel bill to £1,723, up £60 a year (BBC, 26 August 2026).
Gas bills climb 8% while electricity edges down, so gas-heated bills-included lets carry the rise per meter and all-electric homes see under 1% (BBC, 26 August 2026).
Consider repricing the bills line in each bills-included unit at £5 a month per meter from October, then speak to your accountant about the profit impact.
Ofgem's energy price cap rises 4% on 1 October, lifting the typical annual dual-fuel bill to £1,723, a rise of £60 a year (BBC, 26 August 2026). That is the highest level for three years. The underlying picture is almost entirely gas: gas bills go up 8%, while electricity falls slightly.
What the 4% rise adds to a bills-included let
Ofgem puts the increase at £60 a year, or £5 a month, for a typical direct debit household (BBC, 26 August 2026). The monthly figure is simple arithmetic: £60 divided by 12. Neil Kenward, Ofgem's director general for markets, told the BBC the rise was technically 3.6%. Ofgem rounds the number, which is why it published 4%.
That per-meter figure is what matters if you pay the bill rather than your tenant. HMOs (houses in multiple occupation, let room by room to unrelated tenants) usually run bills-included, so the operator absorbs the rise. So does serviced accommodation, meaning short-term furnished lets run like a hotel. The maths is your own: £60 a year for every capped meter you pay. Our free HMO valuation calculator is the place to rerun a bills-included room let.
Standing charges (a fixed daily fee for being connected, whatever you use) move too. Between 1 October and 31 December 2026, average direct debit standing charges are 54.83p a day for electricity and 29.68p for gas (BBC, 26 August 2026). Together that is 84.51p a day, or just over £308 a year per property before a single unit is burned. The electricity charge is lower than the previous three-month period, and gas is largely unchanged.
Why gas-heated stock takes the hit and all-electric does not
The split inside this cap is wider than the headline. Kenward said gas bills are rising 8% while electricity bills fall slightly, helped by the removal of VAT from domestic electricity (BBC, 26 August 2026). Ofgem says the typical annual bill would have been £45 higher without that VAT cut. A household using no gas faces an increase of less than 1%.
Kenward also said the gap between gas and electricity prices makes it cheaper for households to move to heat pumps (BBC, 26 August 2026). My own reading goes a step further. A rising gas unit price shortens the payback on efficiency work. So EPC (Energy Performance Certificate, the A to G energy rating of a property) upgrades on gas-heated stock are worth costing again this autumn. The property investment strategies hub covers where that sits in a hold plan.
What the trend says about the next cap
One quarter is not a trend. Gas has averaged 61% more over the past three months than in late 2025, on figures from suppliers' trade body Energy UK reported by the BBC on 26 August 2026. Bills run about 70% above the pre-crisis norm on the industry data that same report cites. Cornwall Insight forecasts a further 9% rise in the new year, and the next cap takes effect on 1 January (BBC, 26 August 2026).
Where the tenant pays, this is an arrears question rather than a cost line. Energy UK puts total energy debt at £6bn, rising to about £7bn by year end (BBC, 26 August 2026). Vanessa Northam, a director at debt charity StepChange, said people seeking help carry energy debt averaging £2,600. Rent competes with that bill monthly, so our free BTL stress test calculator is worth another run.
Jurisdiction matters. Ofgem regulates energy in England, Scotland and Wales, and Northern Ireland has a separate system (BBC, 26 August 2026). About 22 million households in the three capped nations sit on affected tariffs. Another 11 million, or 35%, are on fixed tariffs and see no change (BBC, 26 August 2026). More planning material sits in our free property resources hub.
Key takeaways
The energy price cap rises 4% on 1 October to £1,723 a year for a typical dual-fuel household, up £60 (BBC, 26 August 2026).
Gas bills rise 8%, while a home with no gas sees an increase under 1%, so all-electric stock is largely insulated.
Bills-included operators carry £60 a year, or £5 a month, for every capped meter they pay.
Average direct debit standing charges from 1 October are 54.83p a day for electricity and 29.68p for gas, just over £308 a year combined.
Cornwall Insight forecasts a further 9% rise in the new year, with the next cap effective 1 January (BBC, 26 August 2026).
Frequently asked questions
When does the new energy price cap start?
Which nations does the energy price cap cover?
How much more will a bills-included unit cost me?
Does the rise hit gas and electricity equally?
What counts as typical household usage?
