Should I increase the rent?

[Everywheretwice]

I own a property that I rent to a lovely family, a couple and their primary age son. They both work full time. The wife's father also lives with them, he works full time too.

They've been in the property for 6 years, they have always paid £800pcm, on time, no issues, and I've never raised the rent. Market value now would be at least £1100.

I'm torn between raising the rent slightly to help cover increasing costs associated with the property, or leaving it as it is because I like them.

@Username085

£850 p/m would equate to £180k mortgage at 3% interest.

Interest rates are actually closer to 6% for first time buyers with a 5% deposit, so £850 p/m would only allow you to borrow £130k.

I'm sure there are parts of the country where £130k will buy you a property, but i doubt the rents are £1300 p/m.

I can only suggest you try to earn more, save more and get realistic about what you can afford.

I like how certain posters assume that everyone's wages have gone up etc, yes they have for minimum wage workers and other lucky employees but not everyone. Our bills are sky-rocketing yet neither myself or DH have had a wage increase, I'm NHS and DH is a local government worker.

I'd increase the rent but be careful, good tenants can be hard to find.

I'm very realistic about the home I own thank you.

You don't seem to be very realistic about mortgage rates vs rents...

Its hard to believe rents would be double. I’d be interested in the figures, rates and where this is.

It's obviously 100% reasonable to increase rent after 6 years to cover increased costs. It's also reasonable to keep rent below market rate in recognition of the fact they've been good tenants (assuming rent still covers your costs). Give them 2-3 months' notice and then they have the option of finding somewhere else, or negotiating with you, if they can't stomach the increase. You all sound like lovely people so I'm sure you'll work it out amicably one way or another.

Without private landlords rent will be controlled by mega rich property investors who will over inflate rental prices more.

No one disagrees that it’s bloody hard to get onto the property ladder without family help - but why do you actually want to make it worse? I’ve been blessed with some outstanding private landlords who rented to us below market value, it made a world of difference. And for reference I was paying £1200 for a 3 bed bog standard house 15 years ago, so £800 p/m sounds very low to me.

RandomButtons
Without private landlords rent will be controlled by mega rich property investors who will over inflate rental prices more.
Or the Government could stop subsidising the market and build its own houses, only 17% of households in England live in social housing so plenty of room for competition to be introduced into the market.

This in spades.

There's a current London thread where the Op is asking about areas to relocate in North London

She has a rental budget of £4k a month. She's only here for 2 years so renting is ideal.

For those of you who say banish BTL where do you propose she live? She could hardly rock up to the LA and ask to rent a council property.

Not everyone renting is on NMW, UC with 4 kids and 2 dogs squashed into a 2 bed flat.

3 adults working full time, that’s a £50 per month each increase, after six years, sounds reasonable to me.

Thank you for the comments and advice!

I've had a good chat this afternoon with the tenants (they invited me over) and I have given them notice of a rent increase, from £800 to £850. They were grateful it's not been raised previously and said they were expecting something as others they know have been given huge increases, I think they were relieved.

I said I'll now likely raise it annually in line with inflation, if needed, certainly no large increases and always with discussion and notice.

This will cover any increased costs and it's still much lower than 'market value' which, let's face it, is ridiculous anyway.

Some people will say I'm soft, others say I'm a greedy arsehole, I can live with both as I'm doing what I feel is about right!

I don’t disagree that more housing needs to be built, but the government will never build its own houses - it will use the existing house builders to do that, which it already does. Whether right or wrong all new estates have to have 10% social housing, though it’s down to council and local one here makes it 30%.

Whether or not a landlord has a mortgage is actually none of a tenant's business, but for the "all landlords are bastards" persuasion restricting lets to only properties owned outright would be even worse

You can hear it now: "They're lucky to own a property which some will never have, so why should they make money out of it?"

Great and excellent outcome

Those that say the BS to you are just jealous and know naff all.

You are one of the millions of good LL's around and a credit to your community.

What you are is, a very caring, thoughtful, helpful, sensitive, sensible, astute and decent person. Do not let anyone else tell you any different

@Everywheretwice that's a great solution and fair. Like you I don't feel the need to raise rents just because and a good tenant is worth so much more than a couple of hundred extra quid a month..

I think you are a great Landlord! Sensible and fair

Most years!?!

But the supermarkets DO that. Loads of retail businesses do. Including the petrol suppliers. Buy in bulk and buy cheaper, but still ramp up the prices later on (even though their surplus was bought cheaper.) Ditto the energy companies.

I thought this was common knowledge.

Some people appear to live in a dream world of pretty colours and unicorns.

Raise the rent. You’re not a charity nor are they your family/mates. There are 3 working adults in the property (which would break my tenancy agreement, only 2 allowed in my 2 bed property). Raise the rent to near comparable market value.

OP - you need cloning.

My landlord increases the rent every year. It's like £50 extra per month that it goes up each year.
Definitely not unreasonable for you to increase the rent, you're not doing it maliciously or because you hate them and they're nasty! It would be because the costs of everything is increasing and you're just keeping in line with that. You need to be receiving your money worth, I'm sure they'd understand.

@5128gap

No, that's not all she said. She also said...

I'm torn between raising the rent slightly to help cover increasing costs associated with the property

it's clear she is out of pocket on the house.

You crack me up @Amelie2024 !

I can tell you what I said is basic economics!!! Back to school for you

@Squiggles23

Grow up.

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

this is NOT 'Basic Economics'. It's just bullshit.