Should I increase the rent?

they might go back to their home country or buy somewhere or relocate within the UK. Just like anyone else might. Tenants wouldn't generally move round the same area just for the sake of it even if they were paying market rent so your point is nonsense. And it's in the OP's interests to have good stable tenants anyway, not sure why you are implying it's a bad thing if they don't go anywhere.

"market rent" applies to new properties on the market not to existing tenanted ones. It's not normal for houses with existing tenancies to have the rent raised in line with those on the market currently.

@Squiggles23

no, they're not, not the vast majority of private LL's. That's a misconception of people who don't understand the costs involved in owning/running a rental property.

it IS basic evonomics, it's a shame you don't understand them.

No, you shouldn't raise the rent.

You own the property and are benefitting from that.

This family are renting and do not own property.

Absorb the increased costs yourself and help this family.

Market rate of 1100 would be for new tenants so don't forget to factor in a couple of months empty, redecorating, credit checks and the hassle of advertising etc. Plus the risk of new tenants not paying/trashing the house.

@HappiestSleeping

have you read all the updates?

she's told the tenants that they can have the house as long as they want it. It's £800 compared to market rent if £1100, they're not going to be going anywhere!!

Why don't write to them and let them know that you are now having to look at upping the rent incrementally on an annual basis to cover increasing costs. You could do this at a rate of £20-30 per year until you reach a rent that you are happy with. This gives them confidence in your intentions and helps them plan for the increase.

We've been in our rented house 5 years. The rent went up by £20 a month last year. Not all landlords are greedy!

£950 is fair between three working adults, especially if the market rate is £1,100.

I think that's a good compromise to help cover costs but keep good tenants.

@Everywheretwice

even given the situation you're in, you need to increase the rent. I'd say £100 now & annual increases.

They are bloody lucky to have found you & been offered a home for life, you don't need to subsidise them to a point where it's costing you. (Being able to afford to, doesn't mean you should be)

given the 'promise of a life tenancy and paying so little for it, it's no wonder they don't want to buy it, why would they. The have the benefit of security and cheaply.

if you want to sponsor people, there are people more in need than your tenants.

That it’s still below market rate and there has been no increase for 6 years I imagine, and the fact OP isn’t a charity.

You sound like a great landlord OP.

A 19% increase, on what grounds? This is someone’s home!

I think, in the nicest possible way, that you aren't doing yourself or your tenants a good service by not raising the rent.

It hurts you as you are not getting market value, and it hurts them as it will make the jolt much harder if / when they move.

I get what you say about good tenants though, and so would put the rent up by a small amount each year. Maybe inflation less 1%? That way you get to feel like you are doing the good deed and rewarding the tenant, but also not impacting your own financial position so significantly.

Unfortunately, circumstances can change, and even good tenants can suddenly become less good and you need to look after your own interests.

But they aren’t just paying the landlords mortgage, in most cases they are paying vastly more to line the landlords pockets.

Shortage of housing & huge demand means tenants have to pay high prices. The renters can’t save because of the high rents they pay. They can’t get on the housing ladder due to low savings and high prices. It’s a cycle where the longer you rent the harder it gets, basic economics.

In the nicest possible way, you need to get a grip OP.

If they found somewhere cheaper or their circumstances changed and they wanted to move, they’d be off without giving you much thought. They’re not your friends, they are your tenants. Are you usually a people pleaser?

You have to be conscious that this is someone’s home and good tenants are worth their weight in gold.

The market rent is so high because of greed on the part of landlords taking advantage of short supply. If £800 more than covers your costs you are in a good position.

£850 seems fair as that’s a 6.25% increase, the fact that you’ve not put it up in the past shouldn’t mean your tenants take the hit.

My contract states how much the rent can't be increases and how often and what time of the year.

@Everywheretwice

I agree with @ForestBather

We have two rental properties and both have long term tenants in there.
One pays £850 a month, the other £895.
Market rate is now at least £1100 but we have never increased the rent even when the mortgage went up £100 on one last year.

First rule of being a land lord, if you have a good tenant keep them at all costs.

@houseproblemo

thise things you do (post on time, cause no problems etc) are what you should be doing. They're not over and above tenant responsibilities.

why should the OP (or your LL) be out of pocket?

where do you live (roughly)? Here (SE) that would be around £2500 a month.

I think you should, at the very least, be breaking even. Unless you're like super loaded, but otherwise, you have to be sensible about your own finances. Just MO.

@CarpetSlipper

that's where your thinking is wrong.

they can't save the deposit because they need to live somewhere, not because they're paying the LL's mortgage.

If the property is mortgaged, they must be charging 25% more than the mortgage in order to meet the conditions of their mortgage; it’s the same with all buy-to-let mortgages.

There are plenty of renters out there who are not looking to buy. Owning your own home comes with so many costs. Our fence got taken out by the storms last year. It cost us £2000 to replace. If my house was a rental, my landlord would have been out of pocket, not me.

It's not just about the finances though. If you, or someone you needed to care for, became seriously ill (which hopefully won't happen), you may get to where you want to look at how you can make your life less stressful. That may include letting managing a rental go. That's just one example. I know I wouldn't have the capacity to deal with a rental right now.