Residents living in a housing development saw their energy bills rise by 500% in April due to Ofgem price cap "loophole".

Residents living in the Greendykes development in Edinburgh saw their heating and hot water bills increase in excess of £1,200 a year due to their homes being on a heat network. These networks - sometimes called "district" or "communal' heating" - are a way of heating blocks of flats or groups of homes. The supplier is usually the landlord or freeholder, which buys energy on the commercial market for residents.

Households on heating networks are currently excluded from the protections from Ofgem's Price Cap. This means residents who are part of district heating schemes fall into a "loophole" of the price cap and even though they are domestic customers, they do not get the same protections.

However, during the height of the energy crisis, the Government introduced the Energy Bills Discount Scheme - formerly called the which gave heating network suppliers financial support - which they then needed to legally pass down to their domestic customers. New applications for this scheme closed this March, and as a consequence, residents under these schemes faced significant hikes in their energy bills.

One resident, Claire Renwick who has lived in the development for the last four years, told EdinburghLive that a kilowatt hour (kWh) of energy spiked from 5p to 20p overnight. This caused her bills to rise to over £200 a month. On top of this, Claire claims her and her neighbours received "no notice" of the rise.

She told EdinbrughLive: “I am now facing bills in excess of £200 a month for simple heating and hot water requirements. This will put a huge financial strain on my budgeting, alongside the many other cost of living increases faced today. As our home is served by district heating, not only are we not protected by any price cap or regulations, but we are also trapped to one provider with no option to shop around or swap tariffs, leaving myself and my neighbours forced to find five times the money to simply have warm showers and heat our homes.”

Have you faced significant increases in your energy bills being part of a heating network? Let us know: mirror.money.saving@mirror.co.uk

MP for Edinburgh East Tommy Sheppard, MP for Edinburgh East has called on Ofgem and the Government to introduce protections for UK residents who face astronomical district heating charges. Sheppard argues that the UK Government has repeatedly ignored SNP calls to close a loophole meaning residents getting their heat from district heating sources are not covered by the energy price cap that most households benefit from.

Following the press from Sheppherd on behalf of the affected customers under this heating network have "temporarily agreed" to reverse the charges until a review is conducted. However, as the provider is absorbing the cost during the short term - price rises in the coming weeks are pretty much inevitable. Shepphard has written to the UK Government to seek an urgent update on district heating systems being charged at commercial, rather than domestic rates. According to recent Government data, an estimated 480,000 households nationwide are under heating networks.

He said: “Residents are worried and rightly angry about the impact of these eye-watering rises. It’s farcical that having done everything right, these residents now face bills well in excess of what they would be paying if they had an individual gas boiler. This defeats the entire point of low carbon energy schemes which are essential if we’re to continue to make progress on tackling climate change.

“The UK Government need to urgently bring district heating schemes under the same price protections as the rest of the energy market. It’s not right that energy companies continue to make a killing out of residents purely because of a technicality that the UK Government have been aware of for years and have done nothing to resolve. I’m demanding action from UK Ministers. They’ve been asleep at the wheel while residents in my constituency are suffering, they need to fix this now. What’s happening isn’t fair.”

A Department for Energy Security and Net Zero spokesperson said: "These bill rises are unacceptable and do not reflect the drop in energy prices that should be passed onto customers. Heat suppliers should ensure they are on the most competitive energy contracts and review their pricing to ensure that customers receive the best possible deal. We are introducing tougher protections from next year, to ensure all heat network customers get a good service and fair prices.”

The Mirror has approached Ofgem for comment.