rent increase

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  • rent increase

    I'm a landlord and intend to do a rent increase.
    (Why? because it hasn't increased in two years and all my costs are rising.)
    I know that there's no answer to the "how much" question, I can set whatever rent I like and the tenant can negotiate. But given that the rent was reasonable in the first place and I just want to increase it in line with inflation, should I use the Retail Price Index which includes housing or the lower Consumer Price Index?
    Mike

  • #2
    The RPI is a good starting point, particularly when justifying the increase to tenants; however you shouldn't use that as a hard-and-fast solution. You really need to check what the going rate is for a property like yours - eg, if inflation was running at 5% pa but market rents in your area had actually fallen by 15% over the past two years, then you'd probably find your tenant would walk if you actioned a 10% increase!

    Whatever increase you do decide upon, consider the effect on your tenant - are they likely to move as a result? If they are good tenants it may be worth holding fire... how long will it take you to make up the loss if you have to readvertise, maybe get a void period, and then maybe end up with a less reliable tenant?

    Also - don't forget to do all the paperwork for the increase properly - plenty of info in the archives here.

    Comment


    • #3
      The official RPI is a waste of time as it's massaged to keep the figure artifically low. Gordon Brown would have to take into consideration the real cost of living to know that true annual inflation is running at about 8%.

      Anyway what should be taken into consideration is market rent. You don't think house prices truly reflect inflationary figures do you?

      In some areas rents have risen as much as 12-15% in the last year. You charge what the market can stand unless you feel like being generous!
      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

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