Utilities for shared living
An underserved, growing segment where our typical pain-points are magnified
The way we live is changing
We identified an underserved and growing segment: Generation Rent. By choice or otherwise, by 2021 a quarter of UK households will rent privately as the rate of home ownership falls.
Our traditional view of people sharing or renting is that they are students or young people just out of education and starting their first jobs. But increasingly, Generation Rent includes young families, professionals sharing whilst saving up to get on the property ladder, and even older retirees who cohabit for companionship and to save on bills.
For the convenience of the energy suppliers, most energy services have been designed for a single customer—the homeowner responsible for the bills. This means that current services aren’t flexible enough to manage multiple people on different accounts, short term leases or individuals moving in and out of a property. Because of this, many of these households are on a standard variable tariff or one unsuited to their needs, meaning they’re paying too much.
Generation rent is growing
Each year, around 200,000 people move into private rented accommodation for the first time. By 2021 a quarter of UK households will rent privately. Almost 5.8m households are expected to be in privately rented accommodation as the rate of homeownership falls.
Rising house prices and the increasing cost of living will mean we’ll have to squeeze a little closer and share a little more. Social issues such as loneliness may also make co-living an attractive choice for others.
Sharing magnifies our issues with our energy providers. Renters move more often and accounts are often inherited.
- 1.5m per year private renter households move home— that’s about a third of the private rental population.
- 29% of private renters that have moved 3 times or more in the last 5 years.
When you're moving around a lot it’s easier to stay with the current provider than to shop around for a better deal. And then there is the landlord. Renters tend to have limited power over energy efficiency, with the responsibility for installing double glazing or improving installation sitting with the landlord.
Changing service expectations
Our expectations of energy suppliers has also changed based on our experience with other types of services. From mobile banking apps that track our spending to fitness apps that link us up with other exercisers in our area, we look for services and products to deliver value and allow us to make choices that represent who we want to be.
- personalised and transparent services that make our lives easier, operate on the go and fit in with our lifestyles.
- the option to use algorithms to automate our decision making, so we can set and forget.
84% of customers believe that moving into a new home is a good time to change their energy habits. Yet energy companies don’t take the opportunity to develop the relationship with their customer and remain inflexible towards people who are moving. Becoming more customer-centric with their offering will reduce churn and acquire more high value customers. Can utilities keep up with us?