SwitchInsights
Understanding deemed contracts, new build supplier inertia, and how moving house could be costing you hundreds
Moving house is consistently ranked as one of life's most stressful events. Between coordinating removal vans, updating your address with countless organisations, and actually unpacking everything, it's no wonder that energy bills often fall to the bottom of the priority list. But this understandable oversight is costing UK households millions of pounds every year.
The problem? When you move into a new property, you automatically inherit the previous occupant's energy supplier on an expensive "deemed contract" – and the vast majority of people simply never get around to switching.
While precise statistics on home mover switching rates are difficult to pin down, industry data paints a concerning picture of widespread supplier inertia:
Note: Based on Ofgem's typical dual fuel household (2,700 kWh electricity, 11,500 kWh gas). Larger households using more energy would save proportionally more.
In 2024, approximately 3 million UK customers voluntarily switched electricity suppliers across the entire year. However, according to the UK government, there are roughly 1.2 million residential property transactions annually in England and Wales alone. Even accounting for the fact that some movers do switch, the disparity suggests that a substantial proportion of home movers remain with their inherited supplier on expensive default rates.
Here's what actually happens from an energy supply perspective when you move into a property:
You take ownership or start your tenancy. The property already has an energy supplier – whoever the previous occupant used.
You're automatically placed on a "deemed contract" with that supplier. This is their default or standard variable tariff, which is almost always more expensive than deals they actively market to new customers.
You receive your first bill based on SVT rates – the price cap maximum. Most people simply pay it without realising they could be on a cheaper fixed deal.
The intention to "sort out energy" remains on the mental to-do list, but never quite makes it to the top. Meanwhile, you're missing out on savings of £200-250 annually.
When you move in without actively choosing a supplier, you're placed on a "deemed contract." Since 2019, these have been capped at the same level as Standard Variable Tariffs (SVT) – currently £1,758/year for typical usage (January 2026).
While this cap prevents extreme overcharging, you're still paying significantly more than you need to. Competitive fixed deals are typically £200-250/year cheaper than the cap. The difference? You have to actively choose them – and most home movers never do.
If you're buying a newly built property, the situation is often worse. Developers typically arrange bulk energy supply contracts with specific suppliers during the construction phase. Common suppliers for new builds include British Gas, E.ON, Scottish Hydro (now part of OVO), and others who negotiate developer contracts.
Developers choose suppliers based on what's cheapest and easiest for them during construction. They typically opt for whoever offers:
The developer has zero incentive to secure good ongoing rates for future homeowners – they won't be paying the bills.
You inherit whatever arrangement the developer made, which means:
You're starting from a position of maximum expense with minimum choice.
Many new build developments use Independent Gas Transporters rather than the National Grid to connect properties to the gas network. While this reduces upfront costs for developers, it creates ongoing problems for homeowners:
A typical new build homeowner on an IGT network stuck on the default SVT could be paying:
Over a typical 5-year fixed mortgage period, that's £1,600 in unnecessary energy costs.
Note: SVT rates change quarterly with the price cap. If prices rise (as they did during the 2022 crisis when the cap hit £4,279), staying on SVT could cost significantly more. Fixing locks in your rate for 12-18 months, protecting you from spikes.
Despite the clear financial incentive, home mover switching rates remain stubbornly low. Research and industry experience point to several key barriers:
Moving house involves coordinating dozens of tasks across multiple weeks. According to Citizens Advice guidance, home movers need to update their address with at least 15-20 different organisations. Energy switching, despite its financial importance, simply gets lost in the chaos.
Unlike cancelling your old council tax or setting up new internet (which have hard deadlines), energy just "works" when you move in. There's no immediate penalty for inaction – the overpayment accumulates silently through slightly higher monthly direct debits.
Many people assume switching energy suppliers is complicated or risky. Concerns about supply interruption (which cannot actually happen during a legitimate switch) or administrative hassle deter people from taking action.
New homeowners, particularly first-time buyers, often don't realise they're on a deemed contract. The supplier sends bills with no indication that these are premium rates. Without historical data for the property or an understanding of typical costs, it's difficult to recognise you're overpaying.
Perhaps the biggest factor: the intention to switch "once we're settled" becomes a permanent state of postponement. After a few months, the energy setup feels established, and the inertia becomes even harder to overcome.
Before completion/move-in: Begin researching who supplies the property and what switching options exist. You cannot physically switch until you legally own or rent the property, but preparation saves time.
Day 1: Take meter readings immediately. Note the current supplier details. Submit these readings to the incumbent supplier.
Week 1: Contact the existing supplier to formally register as the new account holder. Request their best available tariff (not the deemed rate). Simultaneously compare alternative suppliers.
Week 2-3: Initiate a switch to your chosen supplier if a better deal exists. The new supplier manages the entire process.
If the previous occupant didn't tell you who supplies the property:
Call the supplier with:
Critical: Ask specifically for their "best available tariff" or their standard variable tariff rates. You are not required to accept the deemed contract terms indefinitely – Ofgem rules require suppliers to offer you access to their standard tariffs.
Don't assume the inherited supplier is your best option. Use comparison tools to check market rates:
Prepayment meters: If your new property has a prepayment meter, contact the supplier before topping up. Previous occupants may have left debt on the meter, which you'd otherwise inadvertently pay off.
New builds with IGT gas: Check if you're on an independent gas transporter network. If so, prioritise British Gas or SSE/OVO to avoid IGT surcharges, or factor these into your comparison calculations.
Smart meters: Verify whether the smart meter is in "smart mode" (communicating with the supplier). First-generation (SMETS1) meters may lose smart functionality when you switch suppliers.
One major barrier to switching is unfounded concern about the process. Here's what genuinely occurs:
The entire process is regulated by Ofgem and protected by the Energy Switch Guarantee, which mandates maximum timeframes and automatic compensation if things go wrong.
The energy switching landscape has evolved significantly since the 2021-2022 crisis:
Based on Ofgem typical consumption (2,700 kWh elec, 11,500 kWh gas). Higher usage = bigger savings.
This means home movers in 2026 have significantly better opportunities to save by switching than during the 2022-2023 period when the market was essentially frozen. The return of competitive fixed deals makes switching even more financially advantageous.
If you're renting rather than buying, you still have the right to switch energy suppliers – with some caveats:
Your landlord cannot prevent you from switching under these circumstances, even if they have a "preferred supplier" clause in your tenancy agreement. Ofgem rules give you this right.
In these cases, the landlord is the customer of the energy supplier, not you. You pay the landlord, who pays the supplier.
The home mover switching problem isn't just about individual household finances – it has broader implications for the UK energy market:
Low switching rates among home movers reduce competitive pressure on suppliers. If millions of customers remain on default deemed contracts indefinitely, suppliers have less incentive to offer attractive deals to retain customers.
With approximately 1.2 million residential transactions annually and average potential savings of £200-250/year from switching away from SVT, the collective missed savings by UK home movers likely exceeds £250 million annually. This is money that could be spent elsewhere in the economy or saved by households.
First-time buyers purchasing new builds face particularly acute disadvantages – higher energy costs from day one in properties that should be more efficient. This undermines the government's housing policy goals and makes new builds less financially attractive than their EPC ratings suggest.
Whether you're about to move, recently moved, or moved months ago and never switched, it's not too late to improve your situation:
The home mover energy trap persists because it operates silently. There's no dramatic moment when you realise you're overpaying – just a slightly higher direct debit that seems plausible given you're in a new property. Suppliers benefit from this inertia, collecting hundreds of pounds in excess charges from customers who simply never got around to switching.
Breaking this cycle requires treating energy switching as an immediate priority when moving house, not something to sort out "later." The financial benefit – typically £200-250 annually – represents one of the easiest savings you can secure during an expensive period of your life. Twenty minutes spent researching and switching suppliers in your first week of moving could save you over a thousand pounds over the years you live in that property.
The energy market in 2026 offers genuine opportunities to save through switching. Don't let moving day chaos leave you trapped on expensive deemed contracts for months or years. Your future self will thank you for those few minutes of effort.
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Sources: Energy UK switching reports (2024-2025), ElectraLink market data, Citizens Advice consumer guidance, Ofgem regulatory documentation, HM Land Registry transaction statistics, MoneySavingExpert consumer research, Home Builders Federation energy efficiency reports.