I lived alone for many years before moving in with my partner. I kept my house and rented it out. At the time, the going rate for the same type of properties in that area was around £1,000 to £1,100 per month. I wanted to find a tenant quickly and, as I wouldn't be incurring letting agent fees, advertised it with a rent of £915. I had a lot of interest and chose the applicant who seemed the most trustworthy. He then asked if I would consider a rent of £900 instead and, as I couldn't face the thought of dealing with references again for some else, agreed but said, in writing, that it would go up in 6 months and then reviewed annually thereafter.
As he was a decent tenant, I didn't increase the rent after 6 months. Covid came and went and the cost of living crisis but I still didn't increase the rent. Mainly because of procrastination on my part but also, I'm not greedy and didn't want to burden the tenant with more costs at a time when everything else was going up.
As you can see, I'm probably not cut out for being a landlord and hate confrontation.
Fast-forward to this week. I decide to increase the rent to bring it more in line with market rent. Houses on this particular estate rarely come up for rental and get immediately snapped up. My research shows that rents for identical properties are around £1,200 - £1,300. If I were to put my property up for rent now, I could probably ask for more. However, as I didn't want to hit my tenant with a massive increase, I decided on an increase to £1,100 and wrote to him.
He came back to me, very nicely saying that he understands the need for the increase and what a great landlord I've been but that he can't afford the increase and could only manage a maximum of £1,000. He reminded me that he has kept the house in great condition. Please would I reconsider.
If I agree, he would be getting a property for at least £200 per month below the going rate (probably more). I feel that I have been very reasonable and fair with the increase and he wouldn't even get a 1 bed maisonette on the same estate for £1,000 (this one is a 2 bed terrace with garden). My partner thinks he's taking the piss and could probably pay more.
I'm not sure what to do for the best and would really appreciate some other opinions:
YABU - He's a great tenant, it will be a hassle finding someone else. Give the guy a break and let him stay there for £1,000 per month.
YANBU - You have been subsidising this guy for years now. Increase the rent to £1,100 per month and if he cannot pay it, then he will need to find somewhere more suited to his budget.