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A question for tenants/ landlords re rent increases

(24 Posts)
NeatFreak Tue 17-Jun-14 19:21:36

We rent out a small house and have had the same tenants there for over three years. When they viewed it they said what they could afford so we agreed to that price.

Three years on they are very good tenants and we have no problems at all. However, we are considering increasing the rent by about £25 per month, which is still a lot less than market rate round here. We've never increased it at all and are worried that they will either just refuse to accept it or pay it but think about moving out because of it. Also don't want to sour relationships with the perfect tenants!

Main issue is that we manage with what they pay just now and don't want to appear greedy... However the extra would be useful and I know it is under priced now. I guess my main question is whether or not most landlords regularly (annually?) increase rent and how tenants feel about it. Can anyone help?

TribbleWithoutATardis Tue 17-Jun-14 19:30:16

If you were my landlord, I wouldn't think that was unreasonable (unlike my LL's who gave us a whopping rise after being here a year). Just give them enough notice of it.

Holdthepage Tue 17-Jun-14 19:30:53

I usually adjust rent between tenancies rather than increase it for existing tenants.

TribbleWithoutATardis Tue 17-Jun-14 19:32:09

How much of a percent rise is it by the way? I was told on another thread that a 2-3% rise was quite reasonable and in line with inflation.

Naoko Tue 17-Jun-14 19:35:28

If you were my landlord I'd pay it and I wouldn't move because of it because, as you say, it's still cheaper than market rate (and I wouldn't consider you greedy either), but it'd quietly make me stress a lot. Times are hard, the price of everything is going up but wages aren't, and we're barely making ends meet as it is. A rent increase is the last thing we need. You're absolutely within your rights to, but I'm sure your tenants are immensely grateful that you haven't so far.

Piratejones Tue 17-Jun-14 19:35:55

£25 after 3 years is very good and reasonable. Just send a note explain that due to increased expenses at your end, ie maintenance work, you will reluctantly have to increase the rent on the property by £25.

specialsubject Tue 17-Jun-14 19:35:58

it is all about market forces and the sums.

if your tenants do give notice because of this - what will it cost you to relet? How much could you relet for? And of course, you risk some rogues.

they won't necessarily have had a pay rise of course. Equally you are in business, not a charity, and have bills to pay. (Plenty on MN disapprove of making any profit from renting out a house so be prepared for vicious abuse)

seems quite reasonable (£300 a year is not a lot), perhaps sweeten the deal with an offer of some redecoration if that suits/you haven't done it. Also make sure they are aware of the situation in the locality.

but you need to be prepared that they may decide to leave because of this.

ReallyTired Tue 17-Jun-14 19:39:39

If I have a tenant that I like I keep the rent at roughly 90% of market value. I put my tenants' rent up every two years.

Having a rental property involves outgoings. There are some years where I have got away with very little on maintaince and other years where I have had to spend a lot. If rents do not rise then there is not sufficent money to keep a property in top condition.

I would sweeten the pill of the rent rise by asking your tenant if they need any work done.

springchickennolonger Tue 17-Jun-14 19:43:13

I get what you mean. I've had longstanding tenants and haven't increased the rent either, partly because I've had to spend very little and mainly because decent long-term tenants are worth more to me than a rent rise.

ElizabethLemon Tue 17-Jun-14 19:49:30

£25 a month?! That's nothing, especially if your tenants are already getting a good deal.

We have a great landlord and when we asked to renew the contract after 2 years she put the rent up by £50, I didn't think twice about it and we aren't financially well off. Our tenancy is coming to an end again soon and I'm hoping we'll be able to stay on. If the landlord wanted to increase the rent by £25 a month I'd think I was very lucky.

MsRinky Tue 17-Jun-14 19:56:04

I also rent out a small house, and have had the same tenants for three years. According to zoopla, the rent is now about 15% below market value. There is no way I would put the rent up and risk losing my tenants, they are ace. £300 a year, £210 after tax, £4 a week? No way would I upset them for that. I will review the rent when they decide to move out.

NeatFreak Tue 17-Jun-14 19:59:49

Thanks all. We've just spent a lot of money on the house (at their request but we thought as they plan to stay there it was worth the investment and made life a little nicer for them). We are also going to redecorate this summer so we do our best to be 'nice' landlords. They are a lovely couple, both working full time with no children and always pay the rent on time so I really don't want to put them off.
Having thought about it I think I'll leave it for now but will review it in six months time but give them plenty of notice.

Molotov Tue 17-Jun-14 20:06:03

You sound like a lovely landlord smile

£25 pm is relative (isn't everything?!): it depends on the current pcm price of the property; it depends on how attentive you are as a LL (seems like you are very attentive) and it depends on their income/financial situation.

Two years ago, a £25 increase would have been far from ideal for us. However, we would be able to manage it now.

Your plan seems more than fair. Lucky tenents smile

mmm, zoopla is pitching our house at rental of 200-300 pm more than what we charge..... I suggested to our agent (a friend), that we increase the rent this year by 50pcm as we haven't put it up for FIVE years (Same tenant). He said the market wouldn't bear it, people are struggling. I think we're mugs not to. Tenant is late some months but always catch up, and to be fair we haven't been asked to repair anything except the boiler on routine inspection and patio doors on insurance, in five years too. Tricky.

As you have made some improvements and will decorate, I think it is only fair to increase the rent. We've rented for the past 5years, and the landlady always increased the rent, but it was based on any work she had done to the property, so we thought it reasonable.

ScrambledEggAndToast Tue 17-Jun-14 20:22:16

How much do you need the extra £25? Is it worth souring relations and possibly losing them for such a small amount.

SheherazadeSchadenfreude Tue 17-Jun-14 20:23:23

I used to rent out my London flat. I didn't increase the rent annually as I felt that reliable tenants were worth more to me than a bit more money each month. That said, I am not sure anyone would kick up at an extra £25 a month, particularly if it is already a bit below the market rate, and the upheaval of moving would cost them more.

foxdongle Tue 17-Jun-14 20:26:46

I think you are being fair and reasonable.
we will wait for our very nice and on time with payment tenant to move out before we put ours up to market value, but we have no mortgage on it so not fussed to do it until then.

GarlicJuneBlooms Tue 17-Jun-14 20:43:04

Blimey grin Mine's kicking me out to redecorate & will then increase the rent to new tenants, plus they put mine up by £50 after I'd made improvements!

You wouldn't be unreasonable to do it. But - for the sake of an ideal, long-term tenant - it might be worth considering whether this will stress them out and sour the relationship.

Local Housing Allowance went down in April 2011. Since then it's been increased by roughly 4%. I don't know whether this is of relevance here.

Singlesuzie Tue 17-Jun-14 20:47:43

£25 a month would make my home unaffordable so i would have to give notice.

Singlesuzie Tue 17-Jun-14 20:48:36

And i love this house, but just couldnt afford that.

HighwayDragon Tue 17-Jun-14 20:55:34

In my old house oop north my rent was 400pm so 25 would have been an enormous raise, here it is 825, so wouldn't be as bad. It's relative

Piratejones Tue 17-Jun-14 21:00:36

You know what I would do, write to the tenant and ask, explain the £25 increase, say that it would cover the rise in extra maintenance costs (e.g. painting decorating), explain that the rise at this point in time will keep the rent less than market rate and avoid a big jump further down the line.

And ask if they wouldn’t mind paying it, or if they would rather you keep the rent down but cut back else were, (for example no longer doing the decorate).

You can’t get fairer than that, it would put your mind at ease and stop the guilt.

Artandco Tue 17-Jun-14 21:09:13

I think it's fine. It's better than waiting 5 years and adding £50 extra. If you add £25 now, then a few years down the line another £25 is reasonable.

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