Rent Increase

[TREK]

I am a landlord and have been letting a property out to tenants for £600 PCM for 4 years with no rent increases, i have not had my eye on the ball for 18 months and have just found out that very similar properties in the area are going for £800 PCM. What is the maximum i could raise the rent at the end of the tenancy if they signed for another 12 months? Also could i ask the tenant to leave at the end of the tenancy and rent it to a new tenant for £800 PCM? Or is that option illegal. Thank you in advance for any replies.

[jpkeates]

There is no maximum you can raise the rent to from a legal point of view.
There is obviously a limit to what the tenant can afford.

You can ask the tenant to leave at the end of a tenancy period, but they don't have to (which would compel you to go to court to repossess) or, if your tenancy allows for it, you can let the lease become periodic and impose a new rent using a section 13 notice.

Decent rent paying tenants are a great thing to have and most people couldn't take a £2,400 per annum jump in rent.

[TREK]

Yes i fully understand where you are coming from with the £2400 rent increase.

[jpkeates]

It does seem a huge increase in four years.

[Neelix]

Is the £800 what they are being advertised for or what LL's are actually getting?

[TREK]

Landlords are actually getting £800 as there is a massive demand in the area as very few properties available for rent, the market has gone crazy, £1200 for a 3 bed semi in Liverpool.

[jpucng62]

I would suggest you might get away with £50 pcm increase with an explanation that a rent has not gone up for 4 years so there needs to be a significant rent rise. Then £25 cpm each year until you have caught up bit. Seems unfair to evict tenants for you taking you eye off the ball!

[TREK]

I have no intention of evicting my tenants but funny you should mention £50 per month as i thought that would be a reasonable amount as well.

[landlord-man]

But you'd still be doing yourself out of £1,800 per year.

You're going to waste another 3 years after that getting to todays market rent of £800 - which by then will probably be £900+

You're missing out on a few nice holidays or the cost in redecorating, recarpeting your investment for "free"

Add to thst, you are helping to keep the LHA rates low in your area too. But I guess the rest of us taxpayers can thank you.

So, only one losing is you then.

[Ted.E.Bear]

Things have been very volatile lately, I suspect partly due to the uncertainty amongst students over the summer having a knock-on effect.
Rents were much lower a couple of months ago, then shot up near the start of term, they may not stay as high.

You may get £800, for 3 months, then a void, then a refurbishment, then a new tenant at £700, who doesn't pay their rent and trashes the place...
Or you may get £800 a month going forward, and everything is fine, who really knows?

[flyingfreehold]

It is a paradox but you will make more money as a landlord in the end by charging less than the best open market rent. This is because your tenant will tend to stay put, so less void time, less refreshing the property between lets, less default, less wear and tear with people moving in and out. Also if the tenants think they are getting a damned good deal, in my experience they are less inclined to take the P155. Ive got a few tenants holding over as assured periodic tenants for in excess of ten years

[mokka]

Agree with everyone else here really. Push it up high enough and they will have their feathers ruffled and may leave out of spite leaving a void.

[landlord-man]

So the Country is NOT drastically short of rental properties after all then.

Maybe just me being lucky then as i have people waiting to move in before anyone moves out - and thats without advertising.

[doobrey]

Approach depends on various factors - including perhaps most obviously whether they are good tenants.

Personally I cannot envisage a scenario where I would max out the rent being charged to my tenants so that I could enjoy 'a few nice holidays'. (In case anyone was wondering why landlords tend to be so widely despised...)

Agree with the approach suggested in post #7. Discuss with the tenants, point out that they are paying below market rent and implement stepped increases. A fairy widely-accepted tenet of business is to leave something on the table.

You can of course evict using Section 21 for any reason if you wish, once they are out of fixed term.

It wasn't the original question, but FWIW consensus here always seems to be to let tenancies go periodic.

[doobrey]

Ahem. *fairly.