Annual rent increases? And by how much?

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  • Annual rent increases? And by how much?

    Does anybody know what is a normal rent increase these days? I have been living in the same flat for 3 years now and at beginning of every new year my landlord increases the rent with £45 a month - a sum which he considers to be "modest" - the rent started at £950 - so in that price bracket I personally think it is quite significant - so I would appreciate what a normal rent increase per month is. My contract is due to be renewed again - I am a perfect tenant, never been late with my rent in 3 years - looked after the flat very well, have a stable job etc - there are no risks with me whatsover and I would like to live there for a few more years but at this rate of increase I will soon reach a point when I wont afford to anymore. I looked around the property websites and I see same flats I looked at 3 years ago for rent at the same price - rentals dont seem to have gone up really. Furthermore - I am not impact the current economic climate has got on rents?! Any advice would me much appreciated. Thank you.

  • #2
    Does L increase rent by:
    a. serving a Notice under s.13 of Housing Act 1988; or
    b. granting a new Agreement?

    For an AST/SAT, those are the only options. An informal increase demand is not legally enforceable.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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    • #3
      Hi, thank you for your quick reply - the answer is none of the above - at the begining of the tenancy we had a formal short tenance agreement done through the estate agent - at the end of year he came round to see me and asked me if I was happy there and want to renew the agreement - I said yes - and the he said that he needs to increase the amount by £45 a months as the maintenance fees have gone through the roof - I didnt expect it and I am not a good negotiator, also my young son was in the room playing - so I just said ok. The estate agents sent a new contract that I had to sign and return. At the end of the second year, he just sent me a letter stating he is happy to renew the agreement for another year providing I agree with an increase of a "modest" £45 a month. Again, I was not happy - £90 extra a month from the initial rental sum is quite a lot for me - as I would imagine is for all the tenants renting in that price bracket - but I do not want to distrupt my son's life again as he is very settled here - so I asked him if I will get another contract then - and he said no - we will just attach this letter to the previous contract. It looks like he is not using the agency anymore - and it is a self managed flat - meaning that I deal with him directly for any problems. He is coming over to see me on Saturday - and I expect the usual increase by verbal agreement first followed by something in writting - so I am trying to get all my facts before then - to find out if such an increase per month every year is the norm or not and particulary if in these times of economic crissis if it is reasonable to have another increase or be happy to have a good long term tenant? People I work with say they've been in the same place for a few years and never had the rent increased, one had it every 2 years or so but with a much smaller amount. Have I got the right to negotiate it? Thanks for all your help

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      • #4
        Originally posted by jeffrey View Post
        Does L increase rent by:
        a. serving a Notice under s.13 of Housing Act 1988; or
        b. granting a new Agreement?

        For an AST/SAT, those are the only options. An informal increase demand is not legally enforceable.
        Danatella: my post #2 [as quoted] already answers your post #3. L cannot increase rent informally.
        However, he could threaten that he might serve a s.21 Notice unless you agree to the increase.
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


        • #5
          thank you very much for your time to reply to me - so a 5% increase a year is considered normal?

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          • #6
            Originally posted by danatella View Post
            thank you very much for your time to reply to me - so a 5% increase a year is considered normal?
            I would say 5% increase was fair. The last increase I made was about 7%.

            Comment


            • #7
              Originally posted by danatella View Post
              thank you very much for your time to reply to me - so a 5% increase a year is considered normal?
              You're missing the point - the agent (i.e. landlord) cannot increase rent informally, the amount is not a consideration. He either follows what is set down in the tenancy agreement or, in the absence of any such detail, use Form 4B Under s.13, for which you then have 28 days to agree or disagree.
              The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

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              • #8
                Originally posted by potatopete1 View Post
                I would say 5% increase was fair. The last increase I made was about 7%.
                I disagree that there is anything normal about a particular percentage annual rent increase.

                Ultimately a landlord can only command for the property the market rent, whatever that happens to be due to supply and demand in that local area.

                Some landlords adopt a policy of resisting giving rent increases to tenants that they are happy with because they appreciate that a long tenancy that minimises void periods is better than aggravating tenants with rent increases.

                The tenant, if she can gain the courage to negotiate, can make observations about similar properties in the local area being lower in price (hinting that she will leave if he increases the price), point out that the landlord is saving expenses by managing the property without an agent and remind him that he might lose a month or two's rent finding a replacement tenant which will cancel out any increase he may have made in yet another rent increase that is likely to trigger the tenant into giving notice.

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                • #9
                  Personally I think £45 pcm rent increases are far from modest! If I was asked for an extra £45 pcm it would blow my budget out of the water and I suspect the same would apply to my tenants.

                  I recently increased the rent for one of my tenants by £15 pcm (with a new AST) and was quite prepared to reconsider if they objected (it represents only a 2% increase). Times are hard for many families with huge increases in utility bills etc. and I want to keep my tenants. These have been with me for 2 1/2 years.

                  £45 pcm is not an insignificant amount and I hope Danatella resists this yearly increase - it appears to me to be unfair and very greedy of the landlord.
                  Mrs Jones
                  I am not an expert - my posts are my opinion and should not be taken as fact!!

                  Comment


                  • #10
                    thank you Mrs Jones and Beeber for your advice - this is what I was after - rather then the legalities of it - I purely wanted to know if a £45 increase per month every single year is normal or not. Persoanlly I think it is a lot but this beeing the first apartment I ever rented I havent got that much experience in this matters. I know people I work with that thought it was a huge increase to be applied every single year but I wanted to hear other landlords views as well. I will just have to gain the courage to say to him that I am surprised he wants to increase it by this much every year, and especially this year with all the crissis that is going on - and if he still insists we must then at least negotiate a smaller and much realistical amount. thank you once again

                    Comment


                    • #11
                      Your tenant should be paying a "market rent" which is whatever can be attained in the locality.
                      The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

                      Comment


                      • #12
                        Whether an increase of £45 pcm is reasonable or not is surely all relative to the desirability of the accommodation and the rent to begin with.

                        If LL has people beating a path to his door to rent his luxurious penthouse apartment, then £45 may be an appropriate increase.

                        It's more useful to consider what percentage increase is reasonable - and my first instinct is to say that it should be in line with inflation, or the cost of living index. However, that has been complicated this year by the financial emergencies which have beset us and for what it's worth, student letting agencies (don't know if they are typical) are advising landlords to keep rents broadly the same as last year.

                        When I asked why, I was given the following reasons:
                        • students' parents (who help finance their studies) are feeling the pinch and may not be able to support them to the same level as last year
                        • landlords want to increase rents to pay for the cost of getting larger properties up to HMO standard, but prospective tenants couldn't care less about that and don't perceive it as a bonus, so are't willing to pay extra for it
                        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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                        • #13
                          You could surf the web for similar properties in your area available to let, then knock 7.5% off the asking price for each then work out an average price. If your home is in this region or above then show the results to the LL and tell him that the rent is already at or above market value. If he is wise he will accept this rather then have you leave and risk an empty property. Or offer an inflation related increase, which is approx. 2.5% on your rent of £1040 is just £26. (950 + two years increase of £45).

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                          • #14
                            Originally posted by elhuggy View Post
                            Or offer an inflation related increase, which is approx. 2.5% on your rent of £1040 is just £26. (950 + two years increase of £45).

                            Clear as mud, I'm afraid.
                            'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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                            • #15
                              I may have not understood when Danatella post when she says “I have been living in the same flat for 3 years now and at beginning of every new year my landlord increases the rent with £45 a month - a sum which he considers to be "modest" - the rent started at £950…”.

                              I took this to mean that at the end of the first year the rent rose to £995, at the end of the second year to £1040 and she is now at the end of the third year, wondering if her LL is reasonable in seeking another £45. I doubted this as I thought inflation had been in the region of 2.5% over 2008, supporting a rise of £26. But surfing the web just now I see inflation is at 4%, supporting a £41.60 rise.

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