Increasing rent

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    Increasing rent

    Hi - haven't been on here for several years as we have been jogging along nicely.

    We have a small property which we rent out and the same tenants have been in there for nearly 6 years now. we have never increased the rent during that time. They are good tenants but I feel we ought to increase the rent a bit as our costs go up.

    We consider ourselves very good landlords and if they need anything doing we look at it within 24 hours as we live nearby.

    I have been trying to gauge what the current rental price for a similar property might be in this area but they seldom come up for rent and we are in a fairly rural location.

    What do people on here think would be a fair increase please? Thanks.

    #2
    Think carefully before you allow any tenants to stay this long. You may be hit with legislation that will make you regret it.

    Depending on the area a doubling of rent may be in order - but only you can tell us what you would be likely to get if advertised. If you will not get any takers at all at any price then the market rent is zero....

    Comment


      #3
      I'd probably humbly drop into a couple of local letting agencies, and ask them straight. For the price of listening to their 20 minute sales pitch you might well get a good idea or so,

      It's difficult to say, some areas rents will have dropped, others gone way, way up.

      I'm in favour of relatively modest increases every year or so, proposed by letter or email. If refused, think hard what to do next (s13 & s21, possibly).
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment


        #4
        By what % have your costs increased over 6 yrs?
        Or
        Calc change in RPI over 6 yrs.
        Prob better to increase rent by 2% each year until back on track.
        Note the next Budget is less than 1 month away.
        Are they 'good' Ts, paying on time and looking after your asset?

        Comment


          #5
          Originally posted by AndrewDod View Post
          Think carefully before you allow any tenants to stay this long. You may be hit with legislation that will make you regret it.
          Can you expand on that? Are there any current legislation or just proposals?

          Comment


            #6
            Do you have a mortgage? If so, you may want to increase the rent to fit with the new PRA rules.
            Even if not mortgaged, it might be a good idea to make it fit so you have the option in future.

            (PRA rules: Rental income at 145% at an interest rate of 5.5%)

            Will you be affected by section 24? I've been increasing rents to cover this, and will continue doing to do so until it covers for the event of mortgage interest 'relief' being scrapped completely.

            Comment


              #7
              I agree with artful......call a couple of local agents and see what local demand and prices are like. I too tend to add small increases yearly and write to tenants saying something like 'local rents for this property are currently around xxxx and I therefore propose a new rent of yyyy which I hope reflects your status as excellent tenants' The requested renewal rent tends to be substantially discounted as I would far rather keep good tenants than have to look for new ones.
              I will be very interested to hear about the new legislation for longer term tenants that Andrewdod alludes to.

              Comment


                #8
                Andrew's statement was...
                Originally posted by AndrewDod View Post
                .....You may be hit with legislation that will make you regret it.....
                Well, true: Just like "You may be hit by an Asteroid & regret it" or "That Chancellor may increase landlord taxes at the next budget and you'll regret it & voting for them".. or "you may go the pub, drink too much, get in a fight & regret it..." or etc etc etc..

                However, £12:57 to an agreed housing charity if there are any real plans by the Tories to grant extra security of tenure to long-standing, currently AST, tenants, en-mass.

                Best wishes to all...
                I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                Comment


                  #9
                  I've got a similar situation, tenant in for 5 years, with no increase.
                  Recently he's "annoyed" us a little, so we've decided to review it.
                  Went into estate agents who've give us a guide to increase by. What I'm now wondering is it best to write a letter to inform him, or just send the S13?
                  Also, what is the appeal process if he disputes the amount, is that up to him to appeal, what do we get involved with in that?
                  thanks all!
                  also - do we need to get a new AST, or does he need to sign something to accept the increase (and continued residence)
                  Last edited by BillDoor; 24-02-2017, 15:41 PM. Reason: addition

                  Comment


                    #10
                    Why do you want to keep an annoying tenant (at any price).

                    However, in answer to your questions, no, no new AST required (indeed unwise as it grants tenant more security).

                    Serve s13 (or indeed send letter). If he starts paying new rate, all sorted. If he doesn't then I'd simply serve s21 & get new tenants: You could go through the s13 review process if you can be bothered however: See
                    http://england.shelter.org.uk/housin...rent_increases
                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      Depending on what part of the country your property is in it's likely that the current rent will be below the market rate.

                      Local agents are best placed to tell you what you could achieve currently but they will probably find it difficult to be very accurate without seeing it if there isn't lots of comparable evidence (other similar properties let recently in the vacinity).

                      There's nothing stopping you from asking them to visit the house to have a look to give you an accurate market appraisal. You could explain the situation and ask them to tell the tenant they're valuing for remortgage or insurance purposes.

                      Be aware though, that agents are interested in one thing; winning your business. There's every chance they'll give you a very optimistic figure in the hope that it results in you kicking the tenants out (or them leaving because they can't afford the market rate) and, hey presto, they have an empty house they can let for you and earn a fee on.

                      If you like, I cna probably help. I have access to Rightmoveplus on which I can search for properties marketed using the property postcode. I can go back nearly 20 years and hopefully it'd give you a steer on what's achievable.

                      PM me if you want, I'm happy to help.

                      Comment


                        #12
                        Two years since I've been on here … can't believe that! As per my original post our tenants have now been living there for almost 8 years. In that time I have only put their rent up once by 5%. Lately there have been two very similar properties to rent near the one we own and we are renting our property out for quite a bit less but our house is immaculate and has a conservatory which the others don't have plus a larger garden. We attend to any problems within 24 hours and they are very good tenants. I would need to increase the rent by 10% to be charging the going rate. Does this sound reasonable? Thanks in advance.

                        Comment


                          #13
                          Originally posted by Twohoots View Post
                          We attend to any problems within 24 hours and they are very good tenants. I would need to increase the rent by 10% to be charging the going rate. Does this sound reasonable? Thanks in advance.
                          Excessive if you want to keep good tenants.
                          Reasonable if you want to risk losing them, looking for new tenants, and having a void.

                          Comment


                            #14
                            Originally posted by MdeB View Post

                            Excessive if you want to keep good tenants.
                            Reasonable if you want to risk losing them, looking for new tenants, and having a void.
                            Agree with this 10% is a big increase to manage all at once. I'd probably go for 5%. How much have your costs gone up - explaining that to tenants makes an increase seem more reasonable. Market rents dont mean a lot to a tenant because they may up and move to a cheaper location.

                            Comment


                              #15
                              Thanks. I have put it up by 5.8% just to make it a nice round figure!

                              Comment

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