Important Update on Utility Warehouse

Further to the article on Utility Warehouse found here, there have been some important updates to their stance on rented properties.

Due to continued growth and success of the Utility Warehouse within the domestic utility market, Telecom Plus Plc (the company behind UW) has now stated that rented properties are a segment of the market where they are potentially losing money. Mainly due to the fact that; 1) there is a much larger admin burden for this type of customer, 2) They tend to take lower margin services, and 3) they have the highest bad debt record of the customer base.

As a result, new tenanted properties are now required to take a £100 deposit for every service taken, which is obviously not something a tenant is going to be prepared to do.

So is this opportunity dead for Landlords?

Easy answer to this is – No.

Many investors have been introduced to Utility Warehouse though other property investors, as it was a great bolt on business by adding a small amount of residual income to their current property portfolio. However by just adding say 20 or so properties, the income generated from these will not excite many investors.

Even though the introduction may have been through property, the true benefit of this opportunity comes from building a much larger business through word of mouth recommendation to others. So the recent changes within UW’s strategy will further concentrate people’s effort in bringing in high quality customers into the business which will guarantee the longevity of both the company’s continued growth and also their own Utility Warehouse business.

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