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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Rent increase

101 replies

B1anche · 03/02/2024 06:07

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.

OP posts:
ParrotCatDog · 03/02/2024 07:45

Renting at the moment is extortionate. Wages haven’t really gone up that much to cover these increases. Whilst yes others are going for that price (they might be going to 2 wage couples). Do you know his wage? Can he potentially afford it?

Blankscreen · 03/02/2024 08:00

Your poor tenant. A proposed 20% increase in one go.

HalloweenIsDone · 03/02/2024 08:12

This is why you should have gone via an estate agent. They would have done all paperwork and increased the rest every year for you. The fees are tax deductible.

I agree good tenants are worth their weight in gold but also they had dictated the rent from the start. He says he cannot afford what you are asking but he'll have to afford it somewhere. I would not agree to what he is asking but go in with another offer and stand your ground.

Have you inspected the house since he moved in? Apart from paying the rent on time has he been a good tenant? My tennants were lovely until I saw the place after they moved out. I never rented again.

Maggiethecat · 03/02/2024 08:14

TwilightSkies · 03/02/2024 07:15

So you are getting near a grand a month for doing damn all? And you have no reason to increase it other than wanting even MORE money for doing damn all?

Yeah you are greedy.

@TwilightSkies - I agree. No mortgage and doing bugger all, she should let him have it practically rent free.

Original poster
B1anche · 03/02/2024 08:16

Blankscreen · 03/02/2024 08:00

Your poor tenant. A proposed 20% increase in one go.

Yes exactly, the more I think about it and the more comments I read, the more I'm thinking I should just accept his offer of £1,000. He was very understanding in his email and it's clear that he knows he's had a very good deal for the last few years but, equally, it's my fault for not tackling this sooner.

I should point out that the house is in great condition and when things have gone wrong, I have responded instantly and organised replacements or repairs straightaway, as any landlord should. We have a good relationship and I wouldn't want to lose him as a tenant.

OP posts:
Original poster
B1anche · 03/02/2024 08:22

HalloweenIsDone · 03/02/2024 08:12

This is why you should have gone via an estate agent. They would have done all paperwork and increased the rest every year for you. The fees are tax deductible.

I agree good tenants are worth their weight in gold but also they had dictated the rent from the start. He says he cannot afford what you are asking but he'll have to afford it somewhere. I would not agree to what he is asking but go in with another offer and stand your ground.

Have you inspected the house since he moved in? Apart from paying the rent on time has he been a good tenant? My tennants were lovely until I saw the place after they moved out. I never rented again.

Having had a bad experience with a letting agent when I was a renter many years ago, I swore I would never use one.

I have not done a full inspection but I am very friendly with the person who does the gas safety checks etc and he always reports back that the place is looking good. But, you make a very good point...I think before agreeing to any compromise, I will arrange to do a check.

OP posts:
FoxtrotOscarFoxtrotOscar · 03/02/2024 08:22

I had an excellent tenant for 12+ years and never increased the rent in all that time. Having a reliable tenant who paid on time and maintained the property was more important. Can't put a price on peace of mind.

Original poster
B1anche · 03/02/2024 08:28

TwilightSkies · 03/02/2024 07:15

So you are getting near a grand a month for doing damn all? And you have no reason to increase it other than wanting even MORE money for doing damn all?

Yeah you are greedy.

The last few years have not exactly been a bed of roses and, without going into my life story, I would rather not have gone through the circumstances that have allowed me to pay off my mortgage early.

I now hold the property as an investment (it is the only property I own, the one i live in is my partner's) and I don't think it's unreasonable to want a decent return, in the same way that anyone with a savings account is perfectly within their right to find an account that offers the best interest rate. However, I'm well aware that this is someone's home that we are talking about and I also want to do what's right by them, within reason.

OP posts:
Gallowayan · 03/02/2024 08:30

People will always say they can't afford increases but they are inevitable. If this was an increase in motor insurance or utilities the person would just accept the increase. Because you are an individual and not a company the tenant will try to work on your feelings and keep the rent low. I would not necessarily believe that they "can't afford it". You have let this go for too long though.Little and often is the way to go. so it'seasier for the tenant to accept a small anual rise.Use a letting agent if you don't like dealing with the tenant directly.

Original poster
B1anche · 03/02/2024 08:30

FoxtrotOscarFoxtrotOscar · 03/02/2024 08:22

I had an excellent tenant for 12+ years and never increased the rent in all that time. Having a reliable tenant who paid on time and maintained the property was more important. Can't put a price on peace of mind.

Thank you, I'm definitely coming to this way of thinking. Its been great to hear this all this feedback.

OP posts:
Uglyducklingswan · 03/02/2024 08:31

Good to read this as I have a similar dilemma. The difference in my case is that my mortgage has gone up this month. So to make sure everything is covered i need to put the rent up from 900 to 1000 but my Tennant’s are fab and have kept my house well for 10 years. I don’t want to push them out. Like you this isn’t about me wanting more profit now, the properly is my pension pot.

Toddlerteaplease · 03/02/2024 08:32

My landlady was very keen to keep me so she always kept the rent low. She sold me the house in the end (at market rate) because she wanted me to have it. Which was lovely of her. I'd put the rent up to £950 if he's a good tenant and you don't need it.

Princesspollyyy · 03/02/2024 08:34

YABU. Like a precious poster said, why on earth are you increasing the rent other than to keep it in like with market value?

Stop being so bloody greedy and just appreciate the excellent tenant you currently have.

Maggiethecat · 03/02/2024 08:35

@FoxtrotOscarFoxtrotOscar - good that you were in a position to be able to do that.
I would say though that if in year 13 you were to increase the rent even by RPI there would be some tenants who would be very unhappy with this despite have zero increase for 12 years.

OP, think carefully about having an annual increase even if by a small
amount. If rent remains below market your tenant should be satisfied and you will not feel unhappy with your rent being increasingly under value.

cristokitty · 03/02/2024 08:35

Your proposed increase is a big jump for the tenant. You should be looking at increasing a little and often (well, yearly). You're not doing anyone a favour by waiting a few years and then expecting them to suddenly find an extra £200 a month to pay you.

Princesspollyyy · 03/02/2024 08:38

Gallowayan · 03/02/2024 08:30

People will always say they can't afford increases but they are inevitable. If this was an increase in motor insurance or utilities the person would just accept the increase. Because you are an individual and not a company the tenant will try to work on your feelings and keep the rent low. I would not necessarily believe that they "can't afford it". You have let this go for too long though.Little and often is the way to go. so it'seasier for the tenant to accept a small anual rise.Use a letting agent if you don't like dealing with the tenant directly.

Oh dear.

Have you heard of something called the cost of living crisis??

It's true!! Shock horror!! People are struggling to afford their bills!!!!!! They aren't just saying it and making it up!

Record numbers of people are turning to food banks!! Come on, be real.

allthemiddlechildrenoftheworld · 03/02/2024 08:40

@B1anche landlord here/ I dont know how long he has lived in your property but it used to be the case (certainly in scotland) where you had to put the rent up within the first three years or the tenant could remain at the same rent for as long as he stayed in the property. be careful there. you have to consider how good a tenant he is. regular rent money is better than sporadic rent or no rent at all. I charge well below market rent for mine and I have long term tenants who look after the properties. much better than short term tenants who stop paying rent which then costs you a ton of money to get rid of them! a small rent increase might be more appropriate. My rent increases are usually on £10 a month

CheeseSandwichRiskAssessment · 03/02/2024 08:40

I think he's being really cheeky.

Princesspollyyy · 03/02/2024 08:41

allthemiddlechildrenoftheworld · 03/02/2024 08:40

@B1anche landlord here/ I dont know how long he has lived in your property but it used to be the case (certainly in scotland) where you had to put the rent up within the first three years or the tenant could remain at the same rent for as long as he stayed in the property. be careful there. you have to consider how good a tenant he is. regular rent money is better than sporadic rent or no rent at all. I charge well below market rent for mine and I have long term tenants who look after the properties. much better than short term tenants who stop paying rent which then costs you a ton of money to get rid of them! a small rent increase might be more appropriate. My rent increases are usually on £10 a month

Edited

That's not the case for England and Wales, no idea about Scotland.

Wasbedeudetetdas · 03/02/2024 08:43

CheeseSandwichRiskAssessment · 03/02/2024 08:40

I think he's being really cheeky.

Why?
She's tried to put his rent up by 20% in one jump.

Flatleak · 03/02/2024 08:43

A little and often increase would have cost the tenant more. I get why 10% feels shocking but he's better off than if OP had increased it by 10% twice.

Sausagedognamedmash · 03/02/2024 08:44

In social housing there is a rent increase cap, I presume this isn't universal to renting. This year rents can be increased by 7.7% I believe, it's very similar every year. Maybe you need to consider a small % increase yearly now rather than 20% in one go!

Original poster
B1anche · 03/02/2024 08:45

Princesspollyyy · 03/02/2024 08:34

YABU. Like a precious poster said, why on earth are you increasing the rent other than to keep it in like with market value?

Stop being so bloody greedy and just appreciate the excellent tenant you currently have.

I've been looking at ways to increase my income as, like everyone else, I have been affected by the cost of living crisis. I'm not living hand to mouth or anything like that but, the extra income would be useful. I was beginning to feel that I was, in effect, sheltering my tenant from price increases at the expense of my own family.

I very much appreciate that he is a good tenant which is why I wanted some outside perspectives before doing anything rash.

OP posts:
Alaimo · 03/02/2024 08:46

I own a 2-bed property that I rent out for about £200-£300 below market rent. However, in the end I don't really care what others charge. Their rent is sufficiently high that it covers my costs and that's what matters to me. The cheaper rent + fact that I allow my tenants to have a pet means they're happy and hopefully will stay for a while longer.

When my last tenants left the property was empty for about a month while we repainted, fixed some bits and pieces, etc. The change of tenants cost us at least £1500 in lost rent, bills we had to pay, cost of paint etc, plus costs associated with finding new tenants.

AlltheFs · 03/02/2024 08:47

Landlord here (1 property, my former home).

I’d start again with a new tenant. You shouldn’t increase rent beyond 5% each time as that’s generally unreasonable. It’s your fault that you rented below market value and now you need to hike significantly to keep pace. You do the current tenant no favours in making it too cheap.

In most places you will have a queue of good tenants looking, start again with rent at market value and increase gradually and appropriately.

I don’t find it any hassle really to get new tenants, a bit of effort yes but it’s also a good chance to do maintenance. My rental desperately needs a new kitchen but current tenant doesn’t want the aggravation so I give her a reduction in rent and will do it when she moves on, unless it gets to the point it has to be done with her in situ. I am well aware though that the rent reduction will make it difficult to increase it to where it should be with the same tenant. Mine is currently rented for £1025 vs market value of £1200. If she stays it will have to be incremental and will take some time.