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We use Rpi increases at work and they do cut the uncertainty out of rental negotiations. There are risks for both sides but at the moment rpi is outstripping commercial rent increases. You may want to get some advice from a residential agent to see how rent increases are when compared with rpi.
The other thing to check out is your clauses for terminating the tenancy if problems crop up.
But as a landlord, if I liked them, I think I'd bite their hand off...
The tenant wants a clause to say they can extend the lease for another year after the first one and will pay an increase of rent according to retail price index of between 3-7%. Assuming we have no intention of selling, is there anything I should be wary about?? (I'm particularly worried about the fact that the increase in rent has been laid out in so much detail!