Should I increase the rent?

You should raise the rent OP but maybe not by a huge jump so £50-100 this year, then another incremental increase next year. I believe best practice is to do small incremental increases on a yearly basis and keep somewhat in line with local market rate. You can still be below market rate but not significantly below. This will ensure costs are covered and covers maintenance. Whilst you might not have to renegotiate a mortgage deal, if you do it's unlikely you will get the cushy rates of the past so will need to put rent up to cover that. Not raising the rent in line with market rates can trap tenants and makes it harder for them to move on when the time comes.

I have a friend who is rent trapped. She was renting a property off an old lady in a home. She's been there 8 years and has never had the rent raised, she's renting a 3 bed for £450per month. Sadly the old lady died last summer. The lady's family need to sell the house as they need to pay the care home. My friend cannot find anywhere to move for the same money (a 3bed now near us is minimum £800 a month). She is also reluctant to move as she now finds the going rate so high. She has adapted her lifestyle and working hours to suit the £450 rent payments. The council have told her to stay put until bailiffs come or they will not help. Housing Association rents are higher than her £450 as they have done incremental increases and then the waiting lists are very long.

I think in some ways you are confusing low rent with nice, good landlord. The two are not always the same. A good landlord makes sure repairs are done properly and in a timely manner. They make sure all the paperwork is above board and done in a timely manner. They have regular maintenance schedules to ensure the property is kept in good repair and updated on a schedule (kitchens, carpets, windows, extractor fans, bathrooms etc). They have the boiler serviced every year. When they raise the rent they are fair (not jumping by £300 a month in one go for example) and give the proper notice.

What jobs are they in? I realise you aren't a charity, and its already under market rate, however 800 is a lot of money already. Id be interested in knowing are you breaking even or taking it as a loss?

I was in a similar situation with my tenants. The property agent said that actually in the long term I was pricing them out of the market should they want to move. So I have since then made a modest increase each year but it still remains good value for the tenants.

Yes, I’d increase it. You can’t keep it at £800pcm forever. I wouldn’t do a massive increase though; maybe an extra £50pm. Then review it each year and check rents for similar sized properties in the area. You’re not a charity and they have 3 working adults in the property. I think most of those saying don’t increase (because they might not be able to afford to go on holiday or save for a deposit- wtf?!) are projecting somewhat 🤔

Considering only 36% of houses are owned outright, that would be a very unrepresentative sample.

If you mean 'own' as either paid or with a mortgage, that alters the statistic to 64%, so half would also be an unrepresentative sample.

100% raise the rent. There is plenty of income going in there. The husband, the wife, probably tax credits if the income isn't high or wife is SAHM, child benefit, income from the wife's father. I don't know if £800 was a bit high (or low or average in 2018,) as I don't know where you live, or what kind of house it is - must be 3 bed minimum with 3 adults and a child I guess. But yeah, you should have put the rent up at least 3 times in 6 years. (Some landlords would have put it up every year!)

Putting it up to £1250 is going to be a bit of a financial jolt for them, but on the other hand, they very likely won't find anything any cheaper elsewhere. Start by putting it up to £950 as a pp suggested... Or even £925. They will understand. Everything has gone up for everyone since 2018. Also, they would have had a number of pay rises in 6 years.

A 3 bed house near me would cost £1300 to £1700 a month. Even in the less desirable areas between 5 and 8 miles of me, you're looking at a minimum of £1100 a month. (For a 3 bed house.)

Raising it to £850 is a bit of a silly raise sorry @Everywheretwice Start with £950 - or even £925 if you feel a £150 raise is high. So raise to £925 a month, then raise it £75 every year. So it will be £1000 next year. £1075 in 2026. £1150 in 2027 and so on... You say they are really good tenants, but it feels like they are taking advantage of you.

According to the BOE inflation calculator £800 in 2018 is now £998.89.

If you calculate from 2017 it's £1023.64.

You should definitely put the rent up. Prices always go up with inflation. I don't see shy your business is any different.

In future you should do the calculation and put up in smaller increments every year.

Bet half the people on this thread own their houses.

Costs can easily be more than 800 per month. My last 3 sets of tenants have wrecked the place. That's 3 heavy sets of repairs (carpets, kitchens, bathrooms, garden renovations etc.) Add to this all the legal obligations of gas safety certificates, electricity installation reports, EICR reports, insurance, appliance breakdowns (I've never understood how tenants can break washing machines, fridges and freezers so often), and letting agent fees and you can soon be running at a loss. Add in the mortgage, tax on the income, the elevated interest rate that a buy to let mortgage costs, and you are very soon making a loss. And the fact that the landlord carries all the risk of a tenant who refuses to pay and that it could take a year or more to get them out.

As I said in a previous post, I am not saying there is nothing in it for landlords, but it is very much a business and when it isn't worthwhile, landlords will stop renting and sell up. This is what is happening now which is making the rental prices higher as demand outstrips supply.

And water!

We are exactly the same charging way below market rent for two houses. But we like the tenants in both houses. In the last two years we have started with small increases to cover increase in council tax and increase on insurance. My advice would be an increase of say £50 a month this year and then increase annually with inflation. I would not increase to the full market value in one hit though.

Food is a basic human need, but you still need to pay for it.

I've had this dilemma too having had the same tenants for 4 years. I have raised the rent once last year at 5% of the monthly rent to cover increased insurance and maintenance costs. I have decided to keep it the same this year again as they are good tenants and never miss payments. Personally, I would increase more gradually so it's not as much as a shock to them and to keep good relations. They sound reliable and if they were to move out, it may be you end up with new tenants who trash the house, don't pay the rent etc.

Yes, lets get all private landlords to withdraw their properties from the market 👏

What a great idea!

Many mortgages on standard properties are £1000+ and then maintenance and upgrades on top.

Shes not a charity, she needs to charge enough to cover mortgage and repair costs.

Removing landlords like the OP from the system will result in higher rents for everyone.

Absolutely raise the rent. You are not a charity are you? Do a bit of research for like for like and then give them notice of increase. Say that in order to cover insurance and repairs and upkeep of property you will increase to £1000? Per month because need to catch up on previous 5 years no increase .Explain that from now on rent will increase to cover inflation say 5 % annually.

They aren't paying someone elses' mortgage, they are paying to rent a house.

If the government want to see landlords pay tax and meet standards and operate as a business, then the rent needs to be treated as such. It can't work one way. If it isn't covering iteself and giving profit, it needs to be increased.

If the property is mortgaged, you have to make a profit as part of your mortgage conditions. The rent must cover your mortgage plus 25%. Contrary to what people believe, most rental properties are mortgaged.

How on earth do you think costs would be over 800? Or are you expecting the tenant to cover the entire mortgage amount as well as costs?
It's the landlords asset, they can still make a profit without avoiding putting any of their own money into building their asset.

Not always. It can balance out the times when the market rate is lower than costs. The market goes down as well as up.

I have been a landlord for almost 25 years. I didn't set out to be one, it just happened by a strange quirk of fate. Even at the market rate, which looks on the surface to be more than monthly costs, I haven't made a profit for years. There are many reasons for this, and I am not saying that there is no benefit to me, as there is, but it is a long term gain and not a short term one. I believe I am a good landlord, so when something breaks, it is usually repaired or replaced within 24 hours, but that level of response is very expensive.

So much so that I would sell if I could, but a) the market is depressed, and b) I like the tenants I currently have. If I do sell, all it will do is remove another property from the rental market, so it is in everyone's interest to have a viable business model of rental properties.

As an example, the rent I could obtain didn't change for pretty much the entire time, right up until the Trussterfuck, after which point interest rates went up, mortgage costs went up, and so did rental prices / costs. Don't blame the landlords for responding, blame the Conservative party for fucking up the economy.

Housing should not be a business but a basic human need.
It's so hard being a tenant.

No, but profit is not guaranteed. There are years there are losses and there are years you breakeven.

LL seem to be the only 'business' who seem to think every year is going and should be profit.

I think calling it a business is generous anyway.

Exactly. 100%.

But the purpose of a business is to make a profit. No one sets out to make a loss.

@Amelie2024 @WavesAndWildflowers

It's fine, we have different views.

My view is that OP already owns property and should absorb their own related costs.

It's an unpopular view but that's the view I hold. I've had the debate with countless people and it is just a fundamental difference in the way we view the world and societal responsibility.

And yes I am a landlord.